China’s telecom operators have recently announced business expansion plans to strengthen their presence in rural communications market, characterized by the similar focus of combining communications with information. How will these firms operate in the vast rural parts of the country? Is the necessary infrastructure ready?   According to vice-president of China Telecom Leng Rongquan, the company has enjoyed annual growth of 10% or more in the number of new phone users in rural areas. The number of rural users has reached almost 70 millions by October 2006, contributing more than 30% of the company’s total phone users on the Chinese Mainland.   China Netcom has also seen an increase in its rural subscribers. The company’s vice-president Pei Aihua says in the past five years, phone users registered at China Netcom reached 40.76 millions in the past five years and Internet users 4.28 millions.   As for China Mobile, the company’s general manager of customer relations department Xie Bing says that the company’s recent communications campaign for rural market has achieved some progress. By September 2006, the program had 9.94 millions registered rural users and established 82 information counties as well as 37,000 informationalized village to facilitate communications in rural areas.   “China Unicom’s rural communications program has developed to cover 1.2 million rural users,” said associate director of China Unicom Li Zhengmao, “We have established 2,121 information stations and plan to expand that number to 5,000 by the end of this year to cover 5 million users in rural areas.”   China Tietong’s vice-president Pan Weiyue said that at present stage, the company has registered phone users amounted to 2.26 millions in rural areas with annual growth retains at 300,000.   While fixed-line operators mainly want to rely on fixed phone, broadband and IPTV as growth areas in rural areas, mobile operators want to enhance their competitiveness by promoting and accelerating information exchange, infrastructure as well as services.   China Telecom’s Leng comments that information and communications development in rural area has become part of the corporation’s expansion strategy. The company plans to allocate 970 million yuan (US$121.25 millions) this year, which amounted to 20% of total investment volume.   While capital available for investment remains scarce, China Tietong still plans to invest around 500 million yuan (US$62.5 millions) in constructing a long-distanced cable network with a total length of 110,000 km and new facilities including 200 wireless transmission stations.   While China Mobile plans to continue expanding its network infrastructure and the mobile network coverage in rural areas as the foundation for the company’s services, China Netcom also plans to complete 10,000 information stations by the end of 2008 as the prerequisite for full-range services.   The popularity of mobile services has bought more pressure on fixed-line operators such as China Telecom and the company has become even more agressive. With its standardized telecom application service platforms like ChinaVnet and IDC, China Telecom has taken the advantage of its diversified businesses to make efforts in developing and promoting comprehensive information application services also in rural areas. From early 2004 to the end of 2005, China Telecom made telephone services available in 17,266 administrative villages and in the first half of 2006, the operator made telephone service available in over 2,100 more administrative villages.   With the telecom penetration rate already high in major cities, the majority of newly added telephone subscribers are from rural areas. In Beijing and Shanghai, according to China Mobile chairman Wang Jianzhou, the figure stands at 97.8% and 82.9%. And in Guangzhou, it is 117%, meaning some people already own more than one phone, which will push operators to tap the rural market more aggressively.