India's 89 crore mobile phone users could end up paying local call tariffs for making long distance calls, or STD in popular parlance, if roaming charges are abolished by telcos as promised by the central government.
Mobile phone companies have told sector regulator Trai that STD tariffs, which are on an average 60 to 70 % higher than that for local calls, will have to be reduced to bring uniformity in pricing mechanism if free roaming is forcefully implemented. Telcos are opposed to the central government's plan to do away with roaming charges from March 1, 2013.
The concept of domestic roaming is absent in most countries, including large nations such as the US, as they have a single permit for mobile operators. But India is divided into about 20 circles & consumers shell out a fee for using their phones when they move out of their circles.
If roaming is abolished, service providers have said TRAI that subscribers travelling outside their regions or / circles where they stay will be able to call back home without paying STD charges.
For instance, a subscriber travelling to Delhi from Bihar will be able to make calls back to his home circle (which in this case is Bihar) at local call rates. But technically, a call from Delhi to Bihar is considered as a STD call. This subscriber will pay the same charge as a local call when calling back there even though this call is carried from Delhi to Bihar by a national long distance operator.
Roaming is used by about 10 % of the total mobile phone user base. Mobile phone companies also fear that free roaming could propel a bulk movement of SIMs from one circle to another and pose a threat to national security.
Indian operators earn nearly Rs.10,000 crore or 9% of their combined revenues from roaming charges, which would take a hit if the central government directs them to implement this consumer friendly move. Service providers have opposed TRAI's move to regulate roaming tariffs and have suggested that market forces be allowed to ascertain the tariffs.
STD service offers higher margins and a tariff reduction would hit the telcos more severely. In order to offset the collective loss, telcos have warned of an overall increase in voice tariffs.
Mr. Rajan Mathews, Director general, Cellular Operators Association of India said,"Tariffs may go up by 10 to 20%. It will not be a consumer friendly approach"
Src: TOI
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