Roaming charges are not justified when operators hold spectrum in all circles and are to be given pan-India mobile licences.

Telecom companies have little basis for opposing the Government’s move to abolish national roaming charges, allowing mobile phone subscribers to use their numbers freely across India without paying anything extra. The operators were justified in collecting this fee — roughly Re 1 per minute for incoming and Rs 1.50 for outgoing calls — in the past, when no player had either licences or spectrum to operate in all the 22 telecom circles. Each, therefore, had to rely on others’ networks for providing seamless coverage to their subscribers travelling to different parts of the country. To enable this, the operators paid interconnection and carriage charges to one another, which were passed on to the users in the form of roaming fees.

But today, all the big service providers — Bharti Airtel, Vodafone, Reliance Communications, Idea Cellular, Tata Teleservices and BSNL — have pan-India networks and spectrum in most circles. It means that an Airtel subscriber, say, in Delhi would be staying within its network even when he travels outstation anywhere in India. The operator, on its part, incurs hardly any extra cost in allowing the subscriber to avail of the roaming facility. Moreover, the Government has already de-linked spectrum allocation or auctions from issuing of licences. It also plans to dispense with the existing system of circle-wise licences, replacing it with a single unified licence giving operators the freedom to offer voice, data or any other telecom service anywhere within India. If licences are to be given on a pan-India basis and operators hold spectrum for all circles, there can really be no case for levying any national roaming charges. This is unlike international roaming, where Indian companies are genuinely constrained by not having their own licences or network infrastructure, forcing them to recover carriage service costs from subscribers.

By opposing the idea of making national roaming free of charge — even threatening to stop offering this facility if it happens — the industry is being unreasonable and exhibiting short-termism. True, mobile companies now earn around Rs 10,000 crore, or a tenth of their entire revenues, from national roaming services. Operators say that in the event of not being able to charge for these, they would have to raise tariffs across-the-board. They also point to the how network building costs, including of spectrum, have gone up 7-8 times in the last five years, making it even more necessary to retain roaming fees. This is completely flawed logic: Operators have been rationalising tariffs in any case and, given their current finances, are likely to do it irrespective of what happens to roaming charges. The key point is that such levies are inconsistent with the unified licensing regime to which the country is moving. When Europe has abolished them totally and operators like Verizon in US are offering zero-roaming ‘national plans’, the Government is fair in proposing what the industry ought to be doing on its own.

(This article was published on January 23, 2013)
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