China cracks down on Internet provider monopoly deals

Updated 2017-03-21 14:31:02 CGTN

What can you do if your Internet connection is slow? A common option is switching to another Internet service provider (ISP).

But it turns out that there may be only one provider in your neighborhood, leaving you no option to switch to.

Some ISPs in China are busy signing “monopoly agreements” with communities across the country, which exclude competitors from entering, and grants them massive profits.

But this kind of agreement is illegal. As reported by Beijing Business Today (BBT), some branches of China Unicom have been punished by authorities for signing such agreements.

Insiders told BBT this kind of business is very profitable.

“We only need 50 to 80,000 yuan (around 7,200 to 11,500 US dollars) to cover a community. That cost can be covered in just three months. Then we can gain 10-times the profit every year,” one of the insiders said.

But the monopoly brings more trouble than convenience to users. With no competitors, the ISPs may raise prices and lower service quality, in order to achieve even more profit.

This goes in sharp contrast against the requirements of China's Ministry of Industry and Information, which has previously launched five campaigns to lower prices and raise the speed of Internet connections across China.

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