Big 3 telecom carriers to hang up on roaming

Controversial fees will be ditched starting in October

The country's three telecom carriers announced on Mar 6 that they will scrap domestic long-distance and roaming charges starting in October, a move that will push telecom carriers to seek new sources of business growth, including cloud computing and big data.

The three carriers are China Mobile Communications Corp, China United Network Communications Group Co and China Telecommunications Corp.

Li Yue, president of China Mobile, says his company will scrap long-distance and roaming charges, even though such fees account for 8 to 10 percent of total revenue.

"This move is a challenge for the company," says Li. However, it will also encourage the company to enhance management efficiency and reduce its operating costs.

Chinese telecom carriers collect domestic roaming fees when the subscriber leaves their local service area. Fees range from 0.6 yuan (8 cents; 0.75 euro; 0.65) to 0.8 yuan per minute depending on the packages they have signed up to.

Although roaming charges are subject to wide criticism, they remain an important source of revenue for China's three telecom heavyweights, accounting for nearly 10 percent of their net profits.

Premier Li Keqiang announced on Mar 5 the nullification of the long-standing practice of charging fees for distant calls and domestic roaming fees, as part of the government's effort to build a stronger internet industry, when delivering the Government Work Report to the annual session of the 12th National People's Congress.

"We have already canceled the domestic long-distance and roaming charges for new subscribers to China Unicom since Jan 1," says Lu Yimin, general manager of China Unicom.

"We hope to innovate our business model, upgrade products and services and develop new businesses, such as cloud computing, big data and the internet of things to make up for the loss and offer better services."

"The influence on telecom carriers is limited as they have already put forward various types of 4G packages for subscribers to stimulate data consumption," says Xiang Ligang, a telecom expert and CEO of industry website cctime.com.

Xiang adds that the removal of domestic roaming fees will push telecom carriers to improve their products and services, as well as seek new sources of growth and cultivate emerging businesses.

As China implements the Internet Plus strategy, mobile internet and broadband are among the top growth priorities, as demand increases for faster and more cost-effective information networks.

fanfeifei@chinadaily.com.cn

(China Daily European Weekly 03/10/2017 page25)