Business / Industries

Full, fair competition in China's telecom industry

(Xinhua) Updated: 2016-08-27 14:12

BEIJING - China's major telecom operators have announced they will scrap domestic roaming fees this year, a move that will please consumers and bode well for full and fair competition in the industry.

China Telecom, the country's third largest mobile telecommunications provider, announced in July it would eliminate the fees this year as part of a price cut campaign. Soon after, China Mobile, the largest telecom operator, and China Unicom followed suit.

Chinese mobile users are currently charged 0.6 yuan (9 cents) to 0.8 yuan per minute for roaming service under different payment schemes when subscribers leave their local service area.

That is about doubling what subscribers pay within their local service area, which has long riled consumers.

Thanks to improvements in technology, the costs of domestic roaming for operators have been squeezed to nearly zero. The industry regulator has been pushing telecom heavyweights to abolish fees, urging them to "build a telecom system that benefits all consumers."

US telecom service providers did away with roaming fees a decade ago amid fierce competition. European consumers have been spared the fees starting this year after years of legislation. India and Russia are also taking steps to eliminate the fees.

However, China's three heavyweights have found the fees hard to resist, as roaming charges account for nearly 10 percent of their net profits.

Easy profits make the companies less responsive to technology upgrades, stifle innovation and foster complacency and monopoly. As a result, consumers pay high prices for poor service.

The "change of heart" by telecom carriers responds to the calls of government and consumers and, more importantly, is a result of the changing business climate.

Data released by the Ministry of Industry and Information Technology showed that, in the first six months of 2016, mobile data consumption more than doubled to reach 3.75 billion GB, while voice call service declined 1 percent to 1.4 trillion minutes.

China Mobile announced in its semi-annual report that data consumption had become its largest source of revenue after more consumers dropped calling services and used data flow for voice calls and text messages.

China Unicom said only 4 percent of subscribers currently use domestic roaming services, and the number continues to decline.

Ending domestic roaming charges will breathe new life into China's telecom industry.

Telecom carriers have less room to remain complacent and stay in their comfort zones. Instead, they will have more incentives to seek new sources of growth and strengthen innovation. That, eventually, will benefit consumers.

China's telecom giants have been criticized for monopolistic practices for years. The government has not been idle in addressing their anti-competitive practices, having launched probes into them.

Chinese authorities have been resolute in letting the market play a decisive role in economic activities. Full, fair and open competition in the marketplace will boost productivity and benefit consumers. Competition in the telecom sector is a trend that cannot be reversed.

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