The long-awaited reform of mobile phone roaming tariffs yesterday got a kick-start that could benefit the nation's 539 million cellphone subscribers.

 

The National Development and Reform Commission (NDRC) and the Ministry of Information Industry (MII) said yesterday they would hold public hearings this month to discuss a new scheme to lower the caps on roaming fees.

 

Government-set roaming tariffs have long been a target of criticism in China. Although a de facto caller-pays scheme has replaced the two-way charging system - in which both caller and receiver pay for calls - the roaming fees have remained largely unchanged for years.

 

Currently, China Mobile users typically pay 0.60 yuan per minute to receive calls if they travel to another city.

 

Despite growing calls for roaming fees to be reduced or even scrapped, there was little action until last May, when the NDRC and the MII held an opinion poll.

 

The poll found 64 percent of respondents want roaming fees scrapped.

 

According to Guotai Junan Securities research, the roaming fees could be cut by as much as 47 percent.

 

Reform could have a bigger impact on China Mobile, the larger of the two cellular operators, as roaming fees are one of its major revenue sources.

 

Li Gang, vice-president of China Unicom and former chief of China Mobile's Guangdong subsidiary, reportedly said China Mobile's revenue from roaming fees was 49 billion yuan in 2005, while Unicom generated only billions of yuan.

 

That accounted for about one-fifth of China Mobile's total revenue of 243 billion yuan in 2005. In 2006, its total revenue swelled to 295.4 billion yuan with a net profit of 66 billion yuan.

 

A China Mobile spokesperson said the company has received a government notice about the public hearings and is ready to "do what is required by the government", without further comment on the roaming tariffs reform.

 

Lu Tingjie, a professor at the Beijing University of Post and Telecommunications, said roaming fees in China are "unjustifiably high" and lowering price caps is in line with the global trend.

 

The European Commission has been pushing for roaming price cuts for cross-border travelers within Europe.

 

But Lu said it's unreasonable to completely scrap the fees, as the roaming service still involves investment by operators to expand network capacity.

 

China had 539 million mobile phone subscribers by November, China Mobile Ltd had 363 million, while Hong Kong-listed China Unicom Co Ltd reported 118 million GSM subscribers and 40.7 million CDMA users.

 

(China Daily January 3, 2008)