Faster, cheaper Internet to benefit startups

A faster and cheaper Internet service will fuel grass-root innovation and the growth of startups, a senior official of the Ministry of Industry and Information Technology (MIIT) said on Monday.

China is spending 435 billion yuan ($70 billion) to beef up its Internet infrastructure, an increase of 10 percent year-on-year, according to MIIT spokesman Zhang Feng.

"The country is aiming to build an Internet service that can benefit the entire public because investing in the cyber sector can boost domestic consumption and create jobs," he said.

The sale of smartphones, laptops and televisions that connect to the World Wide Web is set to exceed 1.6 trillion yuan this year. Internet-related startups will also hire more than 10 million people, the ministry said.

"The Internet is becoming a basic supply for startups," Zhang said, adding that a lower service fee is required if the government hopes the sector will boost the economy.

The central government is trying to lower service fees for broadband and mobile Internet connections after Premier Li Keqiang criticized the nation's expensive, mediocre-speed Internet services earlier this year.

Zhang pledged "inclusive policies" to encourage customers to surf the Web with cheaper charges.

The MIIT is a major regulator of the "Big Three" telecom carriers, which are all State-owned giants.

It is ordering carriers to lower average prices of broadband and mobile Internet services by 30 percent year-on-year by the end of 2015.

Cao Shumin, director of the China Academy of Telecommunication Research, said China's mobile Internet speed is at the same level as developed markets including western Europe and the United States because local and overseas carriers are using "similar" fourth-generation technologies.

"The biggest gap is in wired-broadband connection. Poor connectivity in rural areas drags down the average speed," Cao said.

China is at the lower-end in terms of average Internet speed, according to content delivery network Akamai. The 3.7 megabytes per second average speed lags behind Malaysia and Sri Lanka.

Researchers from the MIIT argued the slow speed was because Akamai does not have enough servers to collect data on the Chinese mainland.

In the first quarter, the average broadband connection speed in China was 5.12 megabytes per second, a 25 percent increase compared to the end of 2014, according to data from Broadband Development Alliance, a quasi-government Web speed testing organization.