Roaming cheaper by 56%, cell cos warn of hike in local tariffs

While the order will benefit consumers, it has started a bitter battle between cellular companies and the regulator. T V Ramachandran, Director General, Cellular Operators Association of India (COAI), expressed deep disappointment and distress on the cut. “ The adverse financial impact on the industry is expected to be to the tune of Rs 900 crore. This will leave the operators with no choice but to increase local tariffs to maintain sustainability of their business.”

Operators have argued that roaming is a value added service and an important source of revenue, since basic services are provided at very low prices. “ This decision will affect the low end and marginal consumers who may now have to pay higher rates for basic local connectivity.” Ramachandran said.

However, a top TRAI official told the Indian Express that operators’ claims of losses of Rs 900 crore are exaggerated. The official said that actual losses are only to the tune of Rs 600 crore. “In addition to this, port charges and access deficit charges will also come down in the next few days. This will mean savings of Rs 1,700 crore. So operators are not losing at all; the cut is not unfair and is perfectly justified,” the source said. Trai has also said that demand for roaming is highly price elastic and a bigger subscriber base will actually benefit operators.

The Rs 900 crore figure holds only for GSM operators. An industry source said that CDMA operators would suffer losses of only about Rs 20 crore, since they do not have to pay interconnection charges on roaming.

Lower Int’l call rates: legally!

Wednesday turned out to be a jackpot for long distance communication. Other than the cut in roaming charges, the cheapest ever-international call rates were also introduced by in the world of Internet telephony. World Phone Internet Services introduced international calls to over 30 countries including the US, UK, Canada and Hong Kong at 95 paisa per minute. The move is also expected to curb the rapid proliferation of illegal Internet telephony service providers. India is the second largest market for Internet telephony services in Asia after China.