Chinese regulators yesterday made a surprise move by giving the greenlight to telecom operators who want to slash mobile phone charges in Beijing.

 

This will particularly affect the current system of charging users high fees for both making and receiving calls.

 

The move marks a milestone in China's reform of the charging schemes for telecom voice services.

 

Wang Lijian, a spokesman for the Ministry of Information Industry (MII), said the department had approved applications from Beijing Mobile and Beijing Unicom to cut mobile telecom fees in the capital.

 

"The price cuts, which are very significant, will be implemented this month," Wang said yesterday.

 

Pang Wei, a senior official with China Unicom, parent of Beijing Unicom, said the price cuts are a response to consumers' increasing complaints about high fees.

 

A government-set two-way charging scheme has long been practiced in China's telecom sector.

 

This charges users for both making and receiving calls.

 

Over recent years operators have been offering various packages that have lowered fees in most parts of the country.

 

But in Beijing subscribers pay more than anywhere else in the country.

 

There were a lot of complaints about high fees in the capital from delegates at the National People's Congress and the Chinese People's Political Consultative Conference (CPPCC), both held in March, according to Pang.

 

In response, the MII then held talks with China Mobile and China Unicom about cutting prices, he said.

 

"Price cuts will mainly target Beijing Mobile's higher-end users," he added.

 

Subscribers to China Mobile's GoTone service in Beijing typically pay 50 yuan (US$6.25) per month in subscription fees and 0.4 yuan (US$0.05) per minute for both receiving and making calls.

 

This charging scheme has remained largely unchanged for years.

 

According to China Mobile's proposed packages approved by the MII yesterday, the cuts will be very significant.

 

For instance, subscribers will be able to choose a package under which he or she will pay only 10 yuan (US$1.25) to receive 500 minutes of mobile calls.

 

That works out at just 0.02 yuan per minute.

 

The subscriber can also choose a package under which he or she pays 168 yuan (US$21) for 700 minutes of calls. This includes calls made and received.

 

This works out at 0.24 yuan (US$0.03) per minute.

 

This is good news for people living in Beijing, who usually express frustration with expensive communications services.

 

For instance, Beijing was the last city to introduce the cheaper Xiaolingtong, or Little Smart, system. This provides a limited mobile service.

 

Pang said Unicom would soon unveil several packages designed to lower charges.

 

"China Unicom's fees are much less than China Mobile's," said Pang.

 

Unicom is allowed to charge 10 percent less than China Mobile under a government policy designed to protect the smaller China Unicom.

 

In Beijing, Unicom already practices a de facto one-way charging system targeting low-end subscribers.

 

The price cuts could boost mobile phone subscriptions.

 

China currently has more than 400 million mobile phone users.

 

(China Daily May 9, 2006)