China's telecom industry hit a high note in the first half of the year, earning revenue of 219.97 billion yuan (US$26.5 billion), up 12.1 per cent from the previous year.

The Ministry of Information Industry (MII) statistics, released yesterday, also show the industry's added value was 131.98 billion yuan (US$15.9 billion), up 19.2 per cent over the same period last year.

"Strong domestic demand and the government's strenuous efforts to standardize the market are the two main reasons behind the sustained growth," said Yang Peifang, an industry expert from the Academy of Telecommunications under the MII.

"We have the world's largest market, which helped us bounce back from the SARS crisis earlier this year," he explained.

Figures indicate that China recruited 51.85 million new telephone subscribers in the first half of the year, boosting its total subscribers to 472 million.

New fixed line and mobile phone subscribers are 23.38 million and 28.46 million respectively.

Mobile telecommunications are a major driving force for the industry. They accounted for 46.2 per cent of total revenue in the first six months of the year.

Internet usage has also boomed. The number of the Internet users reached 68 million in the first half of the year.

"Reforms within the industry and enhanced supervision from regulators have given Internet usage a boost," Yang said.

China Netcom's unveiling of a corporate merger plan early this month suggests that competition is on the rise and the market is developing soundly, in line with the State Council's requirement.

According to the industry's watchdog, six major telecom operators dominate the Chinese market. China Telecom has a 31.1 per cent share, China Netcom 16.6 per cent, China Mobile 37.4 per cent and China Unicom 13.4 per cent. China Satellite Telecommunications Corp and China Railcom jointly command 1.5 per cent.

But analysts are still calling for more effective supervision to standardize the market.

They believe telecom-related laws and regulations should be implemented to make the market fairer.

Telecom operators should also do more to tap into the growing rural market, industry experts say.

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