Country Presentation

1. Country Presentation Rural ICT Policy Advocacy, Knowledge Sharing and Capacity Building Regional Project Regional Multi-stakeholder Discussion Forum on Rural ICT Development Bangkok, Thailand, 4 July 2011

2. Country ICT Overview • Fixed line-in 2007 China experienced its first annual drop in the number of main lines in service, down 0.8% to 365 million. • Mobile China has the world's largest mobile market, which has 850.9million subscribers at the end of 2010, the average increase rate from 2003 to 2010 is 17.94%.

3. Country ICT Overview • China was home to 457 million internet users at the end of 2010, a 19.01% increase on the previous year. And the density of Internet users increase to 34.3%. • Qinghai, Yunnan and Guizhou recorded the highest internet growth rates

4. State Institutional Structure Ministry of Industry and Information Technology of the People’s Republic of China is the government to make policy and also doing the role of regulator for the telecommunication industry • Policy and Regulation Department: Draft out the draft law and regulation for the industry of telecom and information. • Department of Planning: Making the strategy for the industry of telecom and information and giving policy suggestion. • Telecommunication Development Department: Promote network sharing, make the policy of network technology development and etc. • Telecommunication Administration Bureau: Telecom and information service supervision, universal service administration, interconnection and interworking. • Telecommunication Enablement Bureau: website securityand related affair. • Radio Administration Bureau: Spectrum management, Frequency planning and allocated and etc. • International Cooperation Department: International cooperation and all the foreign affairs.

5. Policy, Legal, & Regulatory Framework The “Telecommunications Regulation” is a legal basis and guideline for the telecom universal service. • In September 2000, “Telecommunications regulation of the People's Republic of China” was enacted”. Term 44 stipulates: • Telecom service operators must fulfill the telecom universal service obligations according to related national regulations. “Plan of Telecom System Reform” is the first time the State Council formally points to build the telecom universal service fund in an official document. In November 2001, the state council of the People's Republic of China issued the “Plan of Telecom System Reform”. The plan stipulates to “set up the universal service fund as soon as possible. All telecom operators should undertake the universal service, promote the transformation of telecom universal service mechanism and ensure the telecom universal service in the market economy.”

6. Funding Mechanism China have no Funding Mechanism for universal service up to now Under this circumstances, a model of rural communications with Chinese characteristics set up. First, MII assigns projects of delivering universal service nationwide to 6 basic telecom carriers according to administrative geographic divisions. The carriers raise fund on their own to fulfil universal service obligation in prescribed areas by completing the assigned projects. Second, MII seeks support of local governments, asking local authorities and grassroots organizations to provide preferential policies and favorable conditions to keep the project cost low and ensure smooth implementation. Third, utilize a variety of applicable technologies. China employs the latest mainstream communication technologies in remote rural areas.

7. Rural Initiatives In China, the telecom universal service is pushed based on the approach of the “Village-access Project”. January 16, 2004, the Ministry of Information and Industry enacted the “Notice on Developing the Village-access Project in Pilot Provinces and Regions” , and meanwhile enacted the “Rural Communications Universal service----Plan on Implementation of the Village-access Project ” as a solution in the transitional period when the universal service fund has not been completely set up. Organizer: Ministry of Information and Industry (current Ministry of Industry and Information Technology) Executor: six state-owned basic telecom operators---- China Telecom, China Mobile, Chine Netcom, China Unicom, China Satcom and China Tietong Implementation time: From 2004 to 2010 or even more longer country.

8. Rural Initiatives The government has made some specific measures on the Village-access Project Management system: The project is managed by ministerial and provincial level authorities, supported by local governments and carried out by enterprises. Implementation approach: Each telecom operator having the nationwide basic telecom service will undertake part of the Village-access Project in its province, i.e. “area slicing contract system”. The obligation quantity undertaken by an operator should be in direct proportion to the income the operator gets from the telecom service market. Tariff standard: No matter what technology is adopted, the tariff standard for the public phone should not be higher than that of the fixed public phone. Assessment of progress: Provincial communications administrations should verify the work of enterprises every quarter every year and report the progress to the Ministry of Information and Industry. The Ministry collects these assessments and then reports to the State Council, local governments, operators, the public and the media.

9. Rural Initiatives Goal for “Village-access Project” : all villages have access to the phone; all towns have access to the Internet. Push the development of information technologies in the country. Year 2006-2009, “Village-access Project” accumulative total built telecom basic infrastructure for 20304 administrative villages, the administrative villages having phones had an increase of 2.76%, reached to 99.86%; accumulative total Help 76651 villages have access to phones, the proportion reached 93.4%; Up to the end of 2009, the proportion of town has internet access reached 99.3% in the whole country, 96.8% of the town has broadband. Chinese administrative establishment system The State Council—province (31)—city (333)—county (2861)—town (44067)—administrative village (700 000. ) *Each administrative village is composed of one village or several villages

10. Key Resource Sharing fromProject/Workshop • Good example for build and management USOF • India: Funding Sources • Malaysia: Monitoring & Evaluation • Mongolia: Planning system • Thailand: Authorization Process “Play or Pay” • Cooperation for all the stakeholders • Cambodia

11. Objectives for Follow-up Set up Funding Mechanism in China as soon as possible Compare the Challenges for Rural telecom development in China: • There is a development gap between the eastern provinces, central provinces and western provinces • Giving USFO can resolve these problems in China: • Preferential support rate for low rural tele-density; • Calculate the cost of terminals into the budget As there are vast land and big population in China • Need more money to compensate the terminals . For example, computers Cooperation for more Ministry and Non-Governmental Organizations • Need more training people for rural villagers

12. Thank you! China Academy of Telecom. Research, MIIT Shan Shan Zhang Email: zhangshanshan@catr.cn