Money Matters - Simplified

Absolutely Free Roaming Not Practical: TRAI

TRAI has categorically stated that making national roaming fully free is impractical

In a moved that has brought cheers to scores of subscribers across the country, the Telecom Regulatory Authority of India (TRAI) has slashed mobile phone roaming charges by as much as 30 percent.

The facility of roaming enables a subscriber to make and receive calls and messages when he is not in his home circle. India boasts of a subscriber base of more than 860 million. Close to 13 percent of these subscribers who are regular users of the roaming facility are likely to benefit from the latest directive from TRAI.

The Revised Rates
As per the new mandate, the maximum charge for per minute of outgoing local call has been fixed at Re 1. Likewise, service providers can charge a maximum of Re 1.5 for an outgoing STD call whilst the subscriber is in roaming.

The ceiling on incoming calls has been capped at 75 paise per minute vis-à-vis the current maximum charge of Rs 1.75 at present. The revised tariffs would be applicable from next month onwards.

There is a possibility that the tariffs may not see any downward trend. “As the current tariffs for most packages in the market are largely in line with the new proposed ceilings, we do not expect most telcos to reduce tariffs to meet the new guideline,” noted Goldman Sachs.

TRAI’s decision would mean that the revenues of all major telecom players take a beating. The service providers were also apprehensive of the impending losses had national roaming been made absolutely free.

According to estimates, the mobile services industry, as a whole, would have lost revenue in excess of Re 10,000 crore had roaming been made free. These apprehensions have been put to rest though. TRAI has categorically stated that making roaming absolutely free is not a viable option.

Reliance Communications Disappointed
Only one telecom operator, Reliance Communications, was advocating for completely free national roaming. The Anil Ambani led behemoth expressed its disappointment at the revised roaming rates.

"We are surprised and disappointed by TRAI's announcement of only a reduction and some adjustments in national roaming charges, which leaves a lot to be desired. Roaming charges should have been completely done away with, which is what Reliance Communications has been advocating for a long time now," stated a release from the company.

According to estimates, the mobile services industry, as a whole, would have lost revenue in excess of Re 10,000 crore had roaming been made free. These apprehensions have been put to rest though. TRAI has categorically stated that making roaming absolutely free is not a viable option.

"We do not agree with the views expressed by certain operators that free roaming would adversely impact revenues. Instead, the growth of business would be rewarding for service providers, as has been seen and confirmed from the international experience," stated the release from Reliance Communications.