Guangdong Telecom Corporation

Construction and development are the main tasks for enterprises and government departments. However, being in the extensive phase, their internal management does not keep pace with their rapid development. Although telecommunications industry is growing in an unprecedented way in China, in the field of telecommunication services, the problem is still more acute. There is, in the main, not an efficient professional cost accounting system and problems connected with cost accounting cannot be easily worked out. Therefore, it is imperative to establish a scientific service cost accounting system so that the fixed costs and the controllable cost expenditure of various services can be assessed and controlled and a basis for service rates and development strategies can be worked out.Taking into consideration of the competitive environment China Telecom now faces, this paper analyses the existing problems and the situation now prevailing in China Telecom and puts forward the method of computing Guangdong Telecom local network cost by finding out network basic unit cost driving factors and proposals for establishing a cost accounting system in telecommunication services.The paper is divided into two parts: the first part being a case description and the second a case analysis. Basing herself on the analysis made, the authoress concludes that the task confronting enterprises is to perfect the financial management system, to reasonably share the costs by working out the network basic unit cost driving factors and establish a cost computing center, for the sake of providing development strategies for enterprises.