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Mobile phone subscribers in Guangdong Province will no longer pay for incoming calls as of Thursday, thanks to a new billing scheme introduced by operators.

 

Subscribers will be jumping for joy at this news, but the caller-pays scheme is nothing unusual in other parts of the country. In recent years, operators in many regions, especially in small cities, have introduced de facto one-way charging schemes.

 

Many of these moves were opposed by the regulators. The Ministry of Information Industry fined some defiant operators in a bid to block the introduction of one-way charging under a government-set system.

 

The introduction of one-way charging in Guangdong marks a milestone in deregulation of the industry, as it is the first time regulators have given a formal green light to the caller-pays scheme.

 

One-way charging has always been controversial. Consumers have been crying out for the scheme to be introduced, but the government was reluctant to relax its grip as it was concerned one-way charging could lead to losses for State-owned assets.

 

Although the top four telecom operators are listed companies, their parents are all State-owned. As one-way charging could lead to a drop in revenue, reports of possible one-way charging have led to the stock of operators' listed arms being sold off.

 

The listed arms are being held hostage by investors. Whenever there was a large sell-off, regulators reiterated that one-way charging would not be allowed.

 

The change to mobile phone charges marks a major improvement in regulators' governance of the telecom industry. Protection of consumers' interests is becoming increasingly important, though they are still not given the same priority as protection of State-owned assets.

 

A government-set charging scheme could only create a protected monopoly or duopoly that hurts consumers' interests. And that would also hamper operators' willingness to open new revenue streams.

 

Monopoly or duopoly, in fact, also leads to a loss of State-owned assets as it hinders competition and results in inefficiency.

 

In that context, it's of little significance to argue whether one- or two-way charging should be adopted. As long as the costs of mobile calls continue to drop and become reasonable, consumers will not care much about whether it is a one- or two-way charge.

 

(China Daily January 30, 2007)