The Hindu Business Line : Roam cheap

From a consumer standpoint, the sharp reduction in roaming tariffs by the Telecom Regulatory Authority of India is welcome. The decision to scrap monthly rentals and slash the ceiling roaming tariffs on outgoing/incoming calls in line with that charged by the public sector BSNL would be a boon for regular domestic long-distance travellers. For its move, the regulator cited the lack of competition in the roaming marketplace, the co-ordinated attempts by various operators to peg tariffs close to the ceiling rate over the past five years, and the failure of service providers to pass on policy benefits fully to consumers. The regulator is also banking on the elasticity of demand to increase substantially the usage of roaming to justify its move.

The industry, however, is not so sanguine. It claims that the adverse financial impact of the cut would amount to Rs 800-900 crore. And it thinks operators will be forced to consider a hike in local call charges as roaming tariffs had helped them keep the former at affordable levels. Welcome though the regulator's initiative, it has not done enough to stimulate competition in the roaming marketplace, which would have made intervention unnecessary. It could have forced BSNL to make available its infrastructure to other networks and opened up yet another source of competition for consumers to profit from. One hopes this is only an interim measure, and TRAI would sets its sights on a durable long-term solution that allows full play to market forces.

There appears to be coordinated behaviour among service providers in pegging the tariff higher than would be warranted by the operation of market forces. Since 2002, when the ceiling roaming tariff was brought into force, the operators have kept the tariff at that level (of Rs 3). Though the operators made an exception in May 2005 by reducing the roaming tariff by Re 1 to Rs 1.99 a minute, they have managed to nullify this by restoring the tariff back to Rs 2.99. The reduction in the composite roaming tariff (which includes PSTN charges) over the years has primarily been due to the reduction in PSTN charges mandated by the regulator. Moreover, CDMA operators, who had kept the roaming tariffs considerably lower than the private GSM operators, have also been raising these tariffs to bring them in line with their GSM counterparts.

Finally, while the industry may feel peeved by this move, it has not helped its cause by making the roaming tariff structure far too complex and much less transparent. By keeping the roaming tariff levels close to the TRAI ceiling order for years, it has given the regulator ample room and justification to act in customer interest.

More Stories on : Editorial | Telecommunications

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Roam cheap

Counting blessings of Republic Day

The dragon's trillion

Singur: Sowing problems?

Get tax collections booming too

The real Chidambaram

`Budget to focus on expenditure reforms'

Roaming rates slashed