Free roaming still far
By bbsbuzz - Tue Oct 18, 10:27 am
NEW DELHI: Consumers might have to wait a while before they can enjoy free nationwide roaming, despite it being in the government’s interest to push through with this populist move announced in the National Telecom Policy 2011 last week.
Free domestic roaming is virtually the norm worldwide. Countries like the US, Canada, France, Germany and England have it. But in India, service providers are expected to resist the move, citing adverse financial implications for them.
Independent telecom consultants point to a conservative hit of Rs 2,000 crore for the industry, but Rajan Mathews, director general of the COAI – the mobile phone operators’ representative body – claims roaming revenues at 8% to 10% of total telecom revenues. Based on Trai’s projected AGR (adjusted gross revenue) of Rs 1,53,489 crore for 2011-12, foregoing domestic roaming charges would then translate into a hit of Rs 12,279 crore to Rs 15,349 crore.
Mathews conceded that free roaming is a growing global phenomenon that can’t be wished away. He also said that some of this revenue loss will be offset by increased usage (minutes) and volumes (subscribers), eventually leading to more manageable net loss of 2% to 3% or Rs 4,600 crore.
Some telecom analysts say roaming would benefit just around 5%-7% of India’s travelling population, while 90% of the subscribers would have to fill in the revenue shortfall by paying higher tariff. The point is debatable – even a person travelling from Delhi to, say, Faridabad switches operators and hence pays roaming charges. To claim just 5-7% would gain from free roaming seems an under-estimation.
Apart from financial issues, free national roaming requires serious regulatory and technical reconciliation as well. When contacted, Trai chairman J S Sarma declined to comment on the issue. However, a senior Trai official told ToI that roaming tariffs, like any other tariffs, fall squarely in the domain of the Trai and it is hardly in the DoT’s place to give directions or send a reference in the matter.
Section 11(2) of the Trai Act says, “The Authority may, from time to time, notify in the official gazette, the rates at which telecommunication services within India and outside India shall be provided under this Act”. As and when Trai decides to examine the matter, it will still involve a long drawn consultation process before an order can be passed. In the absence of strong consumer bodies, operators are unlikely to be bullied into abolishing roaming charges in a hurry, though they could concede to lowering them.
The Trai official informed TOI, “we will need to balance the benefits of free roaming against the potential increase in costs of local charges. Further, the entire interconnection regime, which is based on a circle basis will need to be reviewed and restructured, which is time-consuming”. Agrees Vijay Sondhi, senior partner, Luthra & Luthra. “Free roaming won’t be instant coffee. It needs to reconcile licensing, interconnection, revenue rebalancing and other commercial interests of operators on one hand with the benefits for traveling mobile consumers on the other. Unified licensing will certainly help, but that is some time away”.
Prashant Singhal, telecom partner, E&Y is hopeful that implementation is possible over the next six months or so, given its consumer impact and the fact that it has been embraced by other nations. “There are no roaming charges in countries of Europe, Africa or the US owing to a single license regime”, he explains. Given the complexities and past experience of implementing One India, mobile number portability or banning pesky calls and SMS’s, it would seem that roaming charges are not about to disappear from mobile bills just yet.