Chinese regulators are launching a slew of initiatives to relax
their grip on the mobile phone charging system, which should
benefit the country's 480 million mobile subscribers.
The Ministry of Information Industry (MII) and the National
Development and Reform Commission (NDRC) on April 27 announced they
would push operators to adopt the caller-pay charging scheme within
two years.
The MII last week began a poll on its website, soliciting public
opinion with the aim of lowering caps on roaming fees before
December.
That marks a major departure from regulators' long-standing
tight grip on telecoms fees. China allows cellular operators to
charge both callers and receivers, a focus of complaints among
consumers. Usually a mobile phone call costs 0.4 yuan per
minute.
Regulators have been reluctant to switch to a one-way charging
scheme, fearing that it would cause huge losses for China Mobile
and China Unicom, both of which are now listed overseas.
In recent years, the MII has been muted on the possibility as
well as the timetable for introducing the caller-pay scheme.
"Heated discussions on one-way charging as well as MII's bold
initiatives are indications that the so-called loss of state-owned
assets is no longer a hindrance to the introduction of caller-pay
scheme," said Lu Qijun, a researcher with the State-owned Assets
Supervision and Administration Commission (SASAC).
In 2000, a rumor of the implementation of a one-way charging
scheme sparked a heavy sell-off of shares of China Mobile and China
Unicom in Hong Kong. A loss of nearly HK$200 billion of
capitalization forced former MII chief Wu Jichuan to make a promise
not to launch the caller-pay scheme within two years.
But now "investors are becoming rational as they understand the
caller-pay scheme will cause much in the way of losses to
operators, especially China Mobile, which is signing up an
increasing number of subscribers in rural areas," said Wang
Guoping, an analyst with China Galaxy Securities.
In many less-affluent regions, a de facto caller-pay scheme has
been practiced for some time. Despite that, China Mobile recorded
an annual turnover of 295 billion last year, up 21.5 percent from
2005.
Now about half of China Mobile's new subscribers come from rural
areas, which offset the impact of one-way charging.
"Even if the pure caller-pay scheme is introduced, China Mobile
can maintain its good performance by improving its management and
cutting costs," Wang said.
China Mobile controlled about 70 percent of newly generated
revenues and profits in China's telecoms service sector last year.
A report released on Monday by the SASAC showed the average salary
at State-owned telecom operators is two or three times other
sectors.
Lu said even if roaming fees are scrapped, China Mobile could
afford the possible loss. In China, when a mobile phone user
travels to another city, he or she has to pay for the roaming fees,
which usually cost 0.60 yuan per minute.
With European Union pushing for the elimination of roaming fees
between European countries, pressure has been piled up on Chinese
operators.
"It's unreasonable to charge roaming fees in China," said Lu.
But Lu said consumers might not save much from the drop of mobile
phone fees unless the industry is re-aligned.
(China Daily May 17, 2007)