Caller-pays system still far away

By Li Weitao (China Daily)
Updated: 2006-12-19 10:00

But regulators' efforts to adopt such an approach have failed. Media reports of such an intention in recent years have led to sell-offs of China Mobile Ltd and China Unicom Ltd stocks, both of which are now listed companies.

Some industry observers said the two listed companies have become "hostages" held by investors, who fear the one-way billing approach would lead to declining revenues for China Mobile and China Unicom.

Sell-off of stocks of China Mobile and China Unicom have put regulators under pressure as they are seen as "losses of State-owned assets." Both parents of China Mobile and China Unicom are State-owned companies.

Wang Guoping, an analyst with China Galaxy Securities, said the regulators are unlikely to introduce the caller-pays approach in a unified ruling.

"A de facto one-way billing system has been adopted in many regions in China," Wang said. "Regulators have been relaxing their grip on mobile charging gradually, and it is not necessary for them to make a formal announcement (for the introduction of a caller-pays scheme)."

China Mobile and China Unicom in recent years have been cutting mobile charging in many provinces, even defying the MII's order, in a bid to get new subscribers and fight off competition from Xiaolingtong, a limited mobility service promoted by fixed-line carriers China Telecom and China Netcom.

In May, the MII approved China Mobile's Beijing branch to introduce a slew of pricing packages, one of which enables a mobile phone user in Beijing to pay only 20 yuan (US$2.5) for 1,000 minutes of incoming calls.

That is equivalent to about 0.02 yuan (0.25 US cent) per minute, compared to the previous 0.40 yuan (5 US cents) per minute. China Unicom has also introduced more attractive packages in Beijing.



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