China's telephone fees will continue to drop next year following a steady decrease over the past five years, China's top information technology official said yesterday.

China's telecommunications fees decreased 13.6 percent in 2007 and 53 percent over the past five years, according to Wang Xudong, the minister of the Ministry of Information Industry, the country's top IT regulator.

"Telephone fees are of wide concern in the society, and the level will continue to drop in 2008," Wang said.

As previously declared by the ministry, China will fasten the process of the free incoming call policy nationwide and axe the high roaming fee level in 2008.

Instead of focusing profits on voice communication costs, Chinese carriers aimed to cash in on data-based services, from broadband video, ringtone download and mobile stock information, industry insiders said.

Mobile carriers China Mobile and China Unicom launched aggressive price promotions this year to grab market shares from fixed-line phone operators such as China Telecom and China Netcom, according to Sandy Shen, an analyst at Gartner Inc, a US-based IT research firm.

In Shanghai, fees for users of Shanghai Mobile dropped to about 0.15 yuan a minute from 0.40 yuan (five US cents) a minute at the beginning of 2007.

Shanghai Telecom announced on Tuesday it would cancel call fees for fixed phones between Shanghai's downtown area and Chongming Island which had a higher rate called the "district-to-district calling fee" since 2001.

It is estimated by China Telecom that the cancellation of the fee will help telephone users save up to 30 million yuan each year.

"China may introduce more virtual carriers and allow private and foreign players to attend the market, which makes it more market-oriented," Shen said.

China Mobile, for example, has launched an instant message service called Fetion nationwide.

(Shanghai Daily December 29, 2007)