RCom says abolishing of roaming charges won't hurt operators' revenues

By Kul Bhushan | Published on 30 Apr 2013
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  • RCom says One Nation One Rate plan will not hamper the revenues of mobile operators, and eventually help the overall market expand.

RCom says abolishing of roaming charges won't hurt operators' revenues

Reliance Communications (RCom) says free roaming services will not adversely impact the mobile operators' revenues, contradicting the stance of Bharti Airtel and Vodafone on the issue. It further said free roaming will help expand the overall market.

The company in a submission to telecom regulator Telecom Regulatory Authority of India (TRAI) said: "The growth of business would be rewarding for service providers as can be seen and confirmed from the international experience.”

Citing the example of the U.S., RCom pointed out that Average revenue per user (ARPU) had increased from $39 to $49 in five years from 1998, the year roaming was abolished.

"The trend of declining ARPU reversed after the introduction of the zero roaming tariffs. Thus overall industry revenue increased, which is quite contrary to the submissions of operators like Bharti and Vodafone fearing decline in revenues,” it added.

Vodafone, which has been critical of the free roaming plan, said RCom's views don't consider the loopholes in the regulation such increased tariffs and possible lower usage.

“The corollary of Reliance's position is that all charges should be regulated downwards because this will alleviate barrier to the unhindered consumption of telecom services," it said.

It's notable the National Telecom Policy 2012 envisages free roaming across the country. The proposal, however, has faced a stiff opposition from telecom operators. Free roaming was set to be implemented by March, but has been deferred to October.

Telecom operators fear the move will cause them to lose 10 percent of their revenues, around Rs. 10,000-13,500 crore. TRAI in its consultation paper had acknowledged about Rs 2,216 crore would be reduced from overall revenue if roaming charges are abolished.

Source: Economic Times

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