State Council Executive Meeting Emphasizes Network Upgrade and Expansion: Frequent Policies Favor Fiber Cable Industry Development

On May 14, Premier Li Keqiang of the State Council chaired an executive meeting of the State Council to further promote the speed-up of the Internet and the reduction of fees, so as to bring into play the multiple effects of expanding domestic demand, stabilizing employment and benefiting the people's livelihood.  We will determine measures to give full play to the role of the main body of the enterprise and improve its innovation ability, so as to promote the upgrading of the quality of the industry.
The meeting pointed out that according to the arrangements of the Central Economic Work Conference and the Government Work Report, further promoting the speed-up and cost-reduction of the network and enhancing the network's basic capabilities will not only add convenience and benefits to enterprises and the masses, but also stimulate effective investment and consumption, promote the expansion of employment and give full play to the supporting and leading role of new kinetic energy such as digital economy in economic and social development. It is a policy that benefits both the present and the long term.
The meeting decided that one is to accelerate network upgrading and expansion as an important focus for expanding effective investment.  This year, more than 90% of FTTH access ports will be realized. Gigabit broadband access networks will be deployed in more than 300 cities, pushing fixed and mobile broadband into the Gigabit era.  In view of the weak links in rural and remote areas, more than 600,000 4G base stations were expanded and newly built throughout the year, achieving a coverage rate of over 98% in administrative villages across the country.
The second is to highlight the enhancement of network capabilities in key areas such as industrial Internet, education and medical care, and to increase effective investment.  Strengthen the Construction of Industrial dedicated internet access.  The broadband network access rate for primary and secondary schools nationwide reached 97% during the year, with a universal access capacity of 100 trillion.  We will promote full coverage of hospitals at or above the county level and the special medical network.
It is not difficult to find from the relevant contents of the executive meeting of the State Council that the state attaches great importance to the enhancement of basic network capabilities.  We will step up efforts to upgrade and expand the network, and attach importance to the enhancement of network capabilities in specialized fields such as industrial Internet, education and medical care.  The enhancement of network basic capability needs optical fiber and cable as support, and the positive signals released by the executive meeting of the State Council undoubtedly injected a stimulant into the current sluggish development of optical fiber and cable industry.
The 2019 year of the optical fiber and cable industry is bleak. The demand of operators is tightening, the quantity and price of optical fiber and cable are falling, and the development of the industry has entered a trough.  However, in this sluggish development stage, there are still bright spots to be found, among which the continuous release of favorable policies is the representative.  Specifically, the following six favorable policies will be introduced one after another in 2019.
First, the "telecommunications universal service subsidy fund management pilot measures" issued
On January 14, the Ministry of Finance and the Ministry of Industry and Information Technology jointly issued the "Pilot Measures for the Management of Subsidized Funds for Telecommunications Universal Service".  The central government has set up subsidies for universal telecommunications services to support universal telecommunications services, including the construction, operation and maintenance of optical fiber and 4G broadband networks in rural and remote areas.  The "Measures" are issued to speed up broadband network coverage in rural and remote areas, to help build "broadband China" and to push forward the implementation of the strategic deployment of building a powerful network.  Good for the development of optical fiber and cable industry.
Two, ten departments issued the "implementation plan"
On January 29, the National Development and Reform Commission and other ten departments issued the Implementation Plan (2019) to Further Optimize Supply and Promote Steady Growth of Consumption and to Form a Strong Domestic Market. The Plan calls for accelerating the introduction of 5G commercial license plates and accelerating the consumption of ultra-high definition video products.  We will increase support for the broadcasting of 4K ultra-high definition television channels of central and local television stations and enrich the supply of ultra-high definition video content.  We will support the upgrading and transformation of radio and television networks and telecommunications networks to enhance the capability of ultra-high definition video transmission.  The peak of 4G construction has passed and the construction of 5G network has not yet started. The promulgation of this "Implementation Plan" will give impetus to the development of optical fiber and cable industry.
Three, the "ultra high definition video industry development action plan" released
On March 3, the Ministry of Industry and Information Technology, the State Administration of Radio and Television and the Central Radio and Television Station jointly issued a notice on the "Ultra High Definition Video Industry Development Action Plan (2019-2022)".  The Circular proposes to develop network equipment and software systems such as high-speed optical fiber transmission and access, high-capacity routing exchange, 5G communication, SDN/NFV (Software Defined Network/Network Function Virtualization) and push forward the IP and fiber-optic processes of wired networks.  To improve the access rate and service quality of the communication network, to promote cloud and intelligence of the network, to optimize the network structure, to enhance the carrying capacity of IPTV network, to meet the low latency, high broadband, high reliability and high security application requirements of 4K and 8K video transmission, and to promote the popularization of ultra high definition set top boxes.  Advancing the IP and fiber-optic processes of wired networks will bring good benefits to the development of optical fiber and cable industry.
Four, "on promoting the healthy development of small and medium-sized enterprises guidance" issued
On April 7, the general offices of the CPC Central Committee and the State Council issued "Guiding Opinions on Promoting the Healthy Development of Small and Medium-sized Enterprises", in which countries made specific policy requirements to help more small and medium-sized enterprises to grow in response to problems such as the development environment and financing difficulties.  The contents include cleaning up and standardizing the charges for enterprises involved, and accelerating the implementation of zero charges for administrative fees for local enterprises involved.  We will promote substantial tax cuts such as value-added tax, and implement inclusive tax relief for small and micro enterprises and technology start-ups.  According to the actual situation, reduce social insurance rates and support small and medium-sized enterprises to absorb employment.  Pushing forward substantial tax reduction measures such as value-added tax will help industrial enterprises travel light and carry out research and development, production and management activities, and will be conducive to the high-quality development of industrial enterprises in the new era.
Five, "Telecom Universal Service Pilot Application Guide" Released
On April 16, the Ministry of Industry and Information Technology (MIIT) issued a notice on the "2019 Pilot Application Guide for Telecom Universal Service".  The notice sets out the task target for 2019, that is, to speed up 4G network coverage in remote and border areas, to achieve 4G network coverage in administrative villages nationwide by 2020 (4G network coverage in administrative villages refers to 4G base stations within 5km of the village committee, or 4G network signals in village committees, schools, clinics and any densely populated area with more than 20 households), to achieve a significant increase in 4G network coverage in border areas, and to provide solid support for the overall construction of a well-off society.  About 20,000 4G base stations will be supported in 2019.  The release of this policy is expected to bring some favorable space to the optical fiber and cable market.
Six, "2019 special action" released
On May 8, the Ministry of Industry and Information Technology and the State-owned Assets Supervision and Administration Commission issued a circular on the "2019 Special Action on Further Promoting Broadband Network Speed Increase and Cost Reduction to Support High-quality Economic Development".  The key tasks assigned in the notice include promoting basic telecommunications enterprises to deploy gigabit broadband access networks in more than 300 cities, with gigabit broadband coverage exceeding 20 million users, 400,000 new gigabit broadband users (including household users and government and enterprise users) throughout the year, continuing to promote the construction of fiber-to-the-home systems in residential and commercial buildings, and expanding the coverage of fiber-optic broadband, with fiber access ports accounting for more than 90%;  The 4G coverage rate of administrative villages exceeded 98%.  Over 600,000 4G base stations were expanded and newly built throughout the year. Efforts were made to build 5G quality network, guide all localities to do a good job in site planning of 5G base stations, and further optimize the 5G development environment.  The release of this policy will bring certain influence to the current market of optical fiber and cable industry and will add some impetus to its development.
Source: Optoelectronic Communication Network