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China holds hearing on roaming fee cut, final scheme suspended
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08:04, January 23, 2008

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The Chinese government on Tuesday held a public hearing on cutting mobile phone domestic roaming charges, but the final pricing scheme remained suspended due to divided opinions.

A total of 18 representatives, including five consumers, five telecommunication operator officials and three experts made submissions at the hearing.

Two plans, which suggested price cuts ranging from 14.9 percent to 63 percent, were under discussion.

Plan A proposes cutting the 0.2 yuan (less than 0.03 U.S. dollars) per minute surcharge for roaming services, while plan B also scraps the surcharge and proposes a charge of 0.7 yuan per minute for making calls and 0.3 yuan for receiving calls for all users.

Shen Changzheng, who represented mobile phone users, said it was unreasonable to set service charge standards on the basis of administrative divisions.

"Roaming charges should be scrapped. Instead, an equal charge should be imposed for domestic roaming services and local services on a step-by-step basis," he said.

Most of the China's 539 million mobile subscribers pay from 33 to 50 percent more for calls made or received on their cell phones when they travel to another provinces.

Zhu Jinlin, from the National Committee of the Chinese People's Political Consultative Conference, said the fee reduction proposed by plan B was too small.

Profit margins for both China Mobile and China Unicom should be reduced to 15 percent, but the mobile phone industry in China had 19-percent net profits, he added. "Telecommunication operators should not be huge profit seekers."

China has two mobile phone service providers - China Mobile and China Unicom. Increasing numbers of mobile phone users in China accuse them of reaping handsome profits by charging monopolistic prices.

Lu Wenchang, from China Mobile, argued that his company had reduced call charges by 62.1 percent in the last five years and that it was impossible to provide mobile services in such a vast country with no costs.

The average roaming cost of China Mobile and China Unicom was 0.0485 yuan in 2006, said Huang Xinyan, senior manager with the China Audit Certified Public Accountants.

Ding Ming, from China Unicom, said the ceiling on roaming services fees should be higher than that of local services as the cost was higher.

"Only 2.5 percent of China Unicom's mobile subscribers frequently use roaming services," he said. "That means only a small fraction of our customers can benefit from a fee reduction."

Zhu Zhengwu, from China Telecom, said plan B, which would no longer charge subscribers for long-distance calls when they were outside home provinces, may lead to people giving up fixed lines and turning to China Mobile for long-distance calls.

"The plan could help China Mobile monopolize the market with the substitution of fixed lines with mobile phones, which as a result will hurt the consumers' interests," he warned.

He said the government should provide the mobile license to the fixed lines operators.

Source: Xinhua

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