China’s State Council, the country’s cabinet, has announced it will set up a broadband universal service fund (USF) to support the rollout of high-speed broadband networks in rural areas.
The fund will be used to increase broadband speeds and reduce tariffs across all parts of the country. The relevant ministries are working on measures to manage the fund, but the council did not say how the fund would be financed, C114.net reported.
Despite the Ministry of Industry and Information (MIIT) pushing the ‘broadband China’ project over the past two years, China Telecom Technology Commission director Wei Leping noted it was difficult for the three major operators to achieve the nation’s broadband goals without government support.
Operators have been able to provide quality broadband access in most urban areas, since high population density minimises rollout costs per user. But the government said construction costs in rural areas are very high and it may take more than ten years to recover their investments, C114.net reported. “As listed companies, the operators are reluctant and don’t have enough money for large-scale broadband network construction in rural areas, which requires the government’s investment.”
After Premier Li Keqiang complained in April that China’s broadband networks were expensive and slow, the State Council said a month ago the government will spend CNY1.13 trillion ($182 billion) over the next three years to improve broadband access and increase speeds as the nation pushes towards a more service-based economy to fuel growth.
China’s three operators later committed to sizeable reductions to their data prices, as well as improving network speeds.