Beijing: China's two main fixed-line operators China Telecom Corp Ltd and China Unicom (Hong Kong) Ltd have sent applications to the National Development and Reform Commission (NDRC), asking it to stop a probe against them for monopolistic pricing.

The two major state-run telecommunications companies have also announced plans to substantially raise their broadband speeds and lower broadband costs over the next five years.

On November 9, NDRC, the country's top economic planner, said it was investigating the companies over suspected monopolistic practices in the broadband access business.

This is the first anti-monopoly case involving large state-owned enterprises since China implemented an anti-monopoly law in 2008.

China had 152.5 million broadband internet users at the end of October, with 26.2 million added during the first 10 months of the year.

The two companies account for 90 percent of China's broadband business and have formed "a monopoly" in the market, according to an NDRC official.

If the allegations are proven, the companies could be fined between 1 to 10 percent of their 2010 operating revenue.

China Telecom said in a statement that its price management is faulty and that it "will trade fairly according to market rules and lower its fees to a proper degree".

The company added that it will also lower the unit price for public broadband usage by 35 percent in five years' time.

China Unicom also admitted that it needs to further manage its pricing system and will lower the cost for public access to the internet through broadband, according to a statement.

Last month, Li Qing, the Deputy Head of the NDRC's price supervision and anti-monopoly department, said the companies have not fully integrated their networks, which increased access costs and lowered Internet speeds.

She also noted that the companies were using their market dominance to practice price discrimination, reports in the official media here said.

Xiang Ligang, a telecom and communications observer, said the two telecom carriers are likely to reach a settlement with the NDRC, given their admissions about pricing problems.

After the prices are changed, other broadband operators -- those that previously bought bandwidth from China Telecom and China Unicom at high prices and then sold them on to individual customers -- will benefit, he said.

(Agencies)