Chinese regulators have made a bold move to relax its grip on the long-held charging scheme on telecoms voice services, allowing operators to freely set fees for some voice services under caps set by the government.

The services include domestic long-distance calls, international calls, calls to Hong Kong, Macao and Taiwan, as well as mobile phone roaming.

The Ministry of Information Industry (MII) and the National Development and Reform Commission announced on Friday that the relaxation will take effect October 1.

The ministry said the relaxation is aimed at protecting phone users' "legal rights and interests" and "encouraging competition."

The move marks "a big step forward" for China's telecoms service market, said Yang Peifang, a research fellow with the China Academy of Telecommunications Research under the ministry.

The ceilings temporarily will match the current fees set by the government, the ministry said in a notice posted on its website.

Under the scheme, operators can set fees freely, as long as the fees do not exceed the maximum.

Some operators, especially smaller ones, have hoped to cut fees to woo customers, but such moves are limited by the government-set charging scheme.

In recent years, operators have been offering various packages that, in fact, lowered the de facto fees.

The ministry said regulators will likely change the ceilings in line with the market's development, meaning they could be further lowered.

Operators can also file applications to regulators to adjust the ceilings.

Years ago, reports and rumors about big cuts in mobile telecoms services fees, or a change from the so-called two-way charging to the caller-pay scheme for mobile phone services, sparked a sell-off of shares in Chinese telecoms operators listed overseas.

"I think investors are becoming increasingly rational and they are positive about the long-term prospects of China's telecoms industry," said Yang.

Yet, the charging scheme for the mobile phone calls, a long-time target of criticism in China, remains unchanged.

"Fees for mobile phone calls are the highest (among all the voice calls) and must be lowered," Yang said.

Yang insisted that China should adopt the caller-pay scheme, or the one-way charging, for mobile phone calls.

Currently, both the calling and receiving parties are billed for mobile calls.

The research fellow suggested regulators also set minimum telecoms fees to avoid hostile price wars.

MII spokesman Wang Lijian said at the moment there are no minimums.

A spokesman for China Unicom said the firm has no intention to adjust telecoms fees in the short term, and the government's relaxation of the charging scheme will not have a big impact on Unicom's business.

Other major telecoms operators declined to comment.

(China Daily September 3, 2005)