INDIA BUSINESS WORLD - MAY - JUNE 2007
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BSNL SLASHES ROAMING RATES

A Week after Reliance Communications slashed roaming charges on select tariff plans, public sector BSNL is set to follow suit. BSNL will slash domestic mobile roaming charges to Rs 1 per minute for incoming calls and Rs 1.50 for outgoing calls. At present, incoming calls while on roaming are charged Rs 1.75 per minute, the tariff ceiling for outgoing call is Rs 2.40 per minute. BSNL is likely to extend the new tariffs to select schemes only.

The move by BSNL is certain to put additional pressure on private players who have shied away so far. On May 22, RCOM slashed roaming tariffs for outgoing calls by up to 70% at Rs 0.40 per minute on select plans, and also introduced a flat Rs 1 per minute for incoming calls from Rs 1.75 earlier.

BSNL, which rakes in about Rs 8,000 crore annually through roaming tariffs, is also learnt to be working on some high rental plans which will carry over 200 minutes of free roaming, company sources added.

Even as the former communication and IT minister Dayanidi Maran's plans to abolish roaming charges on June 3 (Mr Karunanidhi's birthday) is unlikely to materialise, the proposed reductions will bring substantial savings to India's mobile subscribers who are regular users of the roaming facility. About 10-12% of the 170 plus million mobile customers avail roaming facilities regularly.

Last week, minister for communications and IT minister A Raja in separate meetings with Tata Teleservices chairman Ratan N Tata, Bharti Airtel chairman and managing Sunil Mittal and Reliance Communications' Anil Ambani, had asked their companies to reduce national roaming rates.

This also marks the second round of reduction in roaming rates over the two months. Effective February 15, telecom regulator Trai had slashed roaming charges by a whopping 55% and also scrapped roaming rentals. Prior to that customers were paying up to Rs 3.99 per minute for both outgoing and incoming STD calls on roaming.

Operators will, however, be unable to remove roaming charges completely as the laws stipulate that roaming subscribers be charged a carriage charge of Rs 0.65 per minute and a termination fee of Rs 0.30 per minute, when on the network of a different operator.

At present, roaming tariffs account for between 10-12% of any operator's total revenues. Private operators have said that any move to abolish roaming tariffs forcibly would result in the industry incurring an annual loss of Rs 4,000 crore.