Friday, October 24, 2008

MCMC to meet informally with operators to discuss roaming fees

WHILE millions of European tourists and business travellers are “hoping for a single market to finally have a positive impact on their phone bills,” Asean has inched a step forward towards reducing its own roaming charges by up to 50%.

This is just not positive for the Asean consumer, who has for a very long time been bombarded with unexpectedly large phone bills, but the reduction, according to analysts, will stimulate usage which will also benefit the celcos.

The move to slash roaming charges in Asean comes after the European Union (EU) mandated voice roaming rates in 27 EU countries to fall by up to 75% from August. Now the EU is proposing to drop the cost of text messages and data services by as much as 60% by July 2009.

Over the weekend, Energy, Water and Communications Minister Datuk Shaziman Abu Mansor said roaming charges in Asean were “exceptionally high” but hoped to reduce the roaming rates with Singapore first.

Following that, the industry’s regulator has called all operators to an informal meeting today. The purpose is to “brief all the celcos” on a study being conducted by Asean on roaming charges in the region. One thing the regulator has to make clear is whether the reduction is for voice telephony only or includes SMS and MMS.

A celco representative said the current premium for roaming charges was quite lucrative and celcos could afford to reduce their rates. Roaming tariffs are determined bilaterally between the roaming and host telcos and the agreement allows operators to mark up to 15% on retail charges.

Celcom (M) Bhd chief executive officer Datuk Seri Shazalli Ramly said he fully supported the minister’s call. To him, Celcom was already offering the lowest IDD rates terminating to mobile numbers in Singapore and Hong Kong at 28 sen per minute.

Maxis Communications Bhd CEO Sandip Das said he welcomed any move that benefited customers and Maxis would need to do this in close cooperation with its roaming partners overseas because the bulk of the cost was based on charges levied in the countries visited by customers.

Singapore telcos would be badly hit with the reduction in roaming charges as it had a high percentage of travellers and proportionately received many inbound travellers, an analyst said in his report. Malaysia is next.

He estimated that inbound and outbound roaming revenue contributed about 15% of Singapore’s telco revenues, 10% in Malaysia, 7% in Thailand and 5% in Indonesia.

Roaming among Asean countries made up about 30%-40% of total roaming revenues. If there were no stimulation in roaming minutes with new rates, mobile revenues would decline by 0.83%. The telcos most affected would likely be SingTel Mobile, MobileOne, StarHub, Maxis and Celcom, he said.

The impact is positive in the long term but the challenge is in the implementation so that the consumer can stop paying “fantasy rates” and there is “greater transparency in bills and costs.”

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