The China Daily reports today that an unnamed source close to the Ministry of Information Industry (MII) has announced that the MII is to relax its control over telecommunications fees this year in an effort to further boost the development of the sector – a move that is expected to greatly impact the domestic telecom market, a field that has already experienced fierce competition partly triggered by price wars.

All the major telecom operators are involved in competition, including China Mobile, China Unicom, China Telecom and China Netcom.

Currently, there are no clear policies on the adjustment on the current telecommunications fees from the MII, which acts as the country's telecom watchdog, as there have been almost no changes to telecommunications fees over the past few years. Nor is it to be assumed that that relaxed controls over telecommunications fees are an indication that China is to adopt one-way charge mobile telecommunications. Insiders believe that in the short term, the one-way charge mobile service is unlikely to roll out as investors are very sensitive about this.

In early January, MII minister Wang Xudong sent out a strong message that the country will develop a more optimized, market-oriented telecommunications pricing policy. "We will continue to strengthen our supervision of the price to standardize the market," he said. "Supervision of the telecommunications fees will be based on different kinds of telecommunications and give enterprises more independent rights to set prices." Currently, inter-connections between mobile networks are free, but transferring a mobile phone call to a fixed-line costs 0.06 yuan (US$0.007) a minute, although China Telecom and China Netcom calculate that it should cost 0.16 yuan (US$0.019).

To solve the problem, the MII reaffirmed early last year that it will straighten out the telecom market by introducing a new inter-connection policy later last year so as to further standardize the country's telecom industry. The new inter-connection policy will be based on the cost incurred by telecom operators to connect calls between networks.