Segmentation in the management of the phone industry is the reason for the difficulty in lowering mobile roaming fees, says an article in People's Daily. The following is an excerpt:
New moves have been made to cut mobile roaming fees, which have attracted wide public attention. According to the new schemes made public recently by the National Development and Reform Commission and the Ministry of Information Industry, mobile roaming fees will see cuts ranging from 13.33 percent to 80 percent for different call types. The new schemes will be submitted to a hearing to be held on January 22.
However, judging from the content of the schemes, consumers do not seem to be very satisfied - they have focused on the real cost of mobile roaming fees and the narrow range of the price cuts.
Is it really difficult to estimate the cost of mobile roaming fees? It is already an open secret that the cost is almost zero.
Some believe that the difficulty in cutting fees is because of the monopoly - price cuts can be achieved if more mobile phone service providers are allowed.
But the existence of mobile roaming fees is not because of the shortage of competition, but because of the segmentation within the industry. Different regions in China have different charge levels for mobiles. Phone cards can be sold across different regions if there are no roaming fees, which will cause chaos within the operators.
News from Guangdong province has raised people's expectations. Guangdong will strengthen punishment on illegal pricing, and mobile roaming fees are on the list. The fees are also expected to be scrapped later this year.
The action taken by a local government indicates that the authorities can overcome the barriers to reducing or eliminating mobile roaming fees.
(China Daily January 16, 2008)
