Strengthening Cooperation to Promote Healthy and Stable Development of the World Telecom Industry

Speech by Mr. Wu Jichuan, Minister of Information Industry
People's Republic of China

Mr. Chairman, Delegates, Ladies and Gentlemen,

First of all, please allow me, on behalf of the Chinese government and in my own name, to congratulate the opening of the first ITU Plenipotentiary Conference in the new century and to express our sincere gratitude to the ITU and the Moroccan government for their work and their considerate arrangements for the Conference. May I wish this Conference a complete success.

Since 1998 when the ITU held its plenipotentiary conference in Minneapolis, great changes have taken place in the international telecom environment. The rapid development of ICT, especially new technologies and new services represented by mobile communication and Internet, has vitalized the traditional telecom industry. In recent years, China has maintained healthy and fast growth momentum in its telecom industry, enjoying a sustained and steady increase in both user number and revenues. China now has 201,000,000 fixed-line telephone users and 180,000,000 mobile ones. The national telephone penetration rate has reached 30.22%, of which 15.65% is for fixed lines and 13.86% for mobile ones. The country's Internet users totaled 41,735,000. China, being the largest developing country, has also had a huge market demand. The Chinese government has made it clear that it will be committed to ICT-driven industrialization by using ICT to develop and upgrade the traditional industries, and to promote the optimization and the sustainable development of the industry as a whole. It will promote ICT applications in various fields, further develop and utilize the information resources and facilitate the informatization of the national economy and society. By doing so, China's information industry will become a pillar industry of the national economy.

However, due to the foaming off of the Internet-based economy, over competition and ever expansion, which have led to the waste of the communication resources and duplicated construction, the world telecom industry has suffered from a serious slump in recent years. Many telecom carriers and transnational companies were bogged down, thus affecting the long-term stable growth of the telecom industry. To solve the problem, the ITU has better rethink over the situation profoundly, sum up experiences and put forward some perspective ideas and advice as to how to develop the world telecom industry healthily and stably so that each country may develop its own telecom sector in line with their respective situation. Here I would like to share with you some ideas on the basis of the Chinese situation.

Firstly, we must have a good understanding of the basic laws and characteristics of telecom development. It is our belief that the current wide fluctuations in the telecom industry are an indication of extruding the over-expanded elements, therefore it is temporary. These over-expanded elements went against the basic laws of telecom development. The telecom industry is essentially a service sector which does not change its intrinsic law because of the introduction of new technologies and services. The telecom industry, and in particular the telecom networks, are infrastructures of the national economy. Its basic attributes such as full coverage, joint operation and service to the entire society have never been changed. Besides, this industry is a sector featuring gradual and steady growth and low profitability. It should not be considered as a sector which generates sudden huge profits. The problems that we have had in the process of telecom development, such as over competition in the market, 3G license auction, excessive investment in broadband networks, are all results of violating the basic law of telecom development. I believe that after the extrusion of the excessive elements, the world telecom industry will enjoy a stable and healthy growth.

Secondly, it is essential to balance the relationship of advanced technologies and services with market needs and service coherence. Practice has proved that new technology is an important driving force of telecom development. However, new technologies and services need an appropriate market to nurture and support it. Moreover, new services should be developed on the basis of the old ones. The developing countries should select the new technologies that are needed by the market, build future-oriented telecom infrastructure and expand both the market and new services.

Thirdly, it is essential to handle the relations between market competition and industry regulation. From the perspective of economics, the telecom industry features the natural monopoly and economy of scale. In general, the larger the scale, the lower the operational costs. However, blind pursuit of economy of scale may lead to monopoly, which reduces competition among businesses and devitalizes the industry. Therefore, unlike market regulation in other sectors, regulation in the telecom market should aim at ensuring market order and focus on effective competition by considering both the economy of scale and competition. For the developing countries, it is important to set up a good regulatory system to facilitate rational competition and give full scope to competition as a major driving force of communications development. Meanwhile, such a regulatory system can prevent market disorder caused by disorderly competition and help to avoid duplicated investment and waste of resources.

Fourthly, we need to promote the healthy development of the Internet while ensuring the security of the information network. The Internet has vitalized the telecom industry and made people's life more convenient. People share information resources on the Internet, do business and communicate on-line at any time and in any place. Since we depend more and more on the Internet to live and work, there is an increasing demand for a secure network. However, we do face serious security problems on the Internet. Viruses, hackers, spam and interference from harmful information have challenged the growth of the Internet. Thus we should give priority to solving the security problems which have held back the healthy development of the Internet. We propose that the Internet problem be brought into the terms of reference of the ITU as soon as possible and corresponding international laws and regulations on the Internet established to ensure the legalized information content on the Internet, fight against cyber crime and promote the healthy development of the Internet.

Mr. Chairman, delegates, the telecom industry has always been fundamental to a nation's telecom development and quality of life improvement. However, telecom development is extremely unbalanced across the world due to the gap in economic and technological development. We are facing a worldwide challenge of bridging the "digital divide". For this reason, we call on all the ITU Member States to strengthen cooperation. In particular, the developed countries and international financial institutions should establish on a long term basis mutually beneficial partnership on an equal footing with the developing countries so as to promote ICT development in the developing countries. They should place an obligation on themselves to help the developing countries improve their telecom infrastructure. Concrete actions must be taken in the form of closer cooperation in technologies, financing and human resources in an effort to narrow the "digital divide". At the same time, the developing countries need to make their own efforts in line with their national conditions in order to catch up as soon as possible. We believe that the ITU will play an active role in this process. The Chinese government would like to make positive and unremitting efforts in this connection.

Mr. Chairman, we hope that the ITU may further leverage its advantageous position by maintaining and strengthening its leadership and authority in the telecom world. In the research on the trends and development strategies of the telecom industry as well as on the new issues arising from technological progresses, the ITU will take a forward-looking attitude in order to lead the world telecom industry to grow in a healthy and fast way. To be specific, the ITU may strengthen its management and coordination in the configuration of communications resources, allocate the numbering and frequency resources in a rational way. It will actively involve itself in the management of allocating Internet domain names and addresses. The ITU needs to strengthen the research on infocom network security and put forward feasible and practical solutions. It may devote greater efforts to the research on the standards of mobile communications and Internet technologies as well as the research on the convergence of the computer, communication and cable networks and on communications regulation. The ITU will also promote cultural diversity of Internet. At the same time, we hope that the ITU may adapt itself to the changes in the telecom environment and satisfy the demands of the Member States by reforming its internal management systems.

Mr. Chairman, delegates, the Chinese government will further strengthen its cooperation with the ITU and other Member States, and make a sustained effort to promote the healthy and stable development of the worldl telecom industry!

Thank you.