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Beijing Mobile Operators to Slash Prices
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Chinese regulators yesterday made a surprise move by giving the greenlight to telecom operators who want to slash mobile phone charges in Beijing.

This will particularly affect the current system of charging users high fees for both making and receiving calls.

The move marks a milestone in China's reform of the charging schemes for telecom voice services.

Wang Lijian, a spokesman for the Ministry of Information Industry (MII), said the department had approved applications from Beijing Mobile and Beijing Unicom, subsidiaries of China Mobile and China Unicom respectively, to cut mobile telecom fees in the capital.

"The price cuts, which are very significant, will be implemented this month," Wang said yesterday.

Pang Wei, a senior official with China Unicom, said the price cuts are a response to consumers' increasing complaints about high fees.

A government-set two-way charging scheme has long been the practice in China's telecom sector.

Under the scheme, users are charged for both making and receiving calls.

Over the years, operators have varied their service offerings to lower fees in most parts of the country.

But in Beijing, subscribers pay more than anywhere else.

There were a lot of complaints about high fees in the capital from delegates attending the annual sessions of  the National People's Congress and the Chinese People's Political Consultative Conference (CPPCC), both held in March, according to Pang.

In response, the MII then held talks with China Mobile and China Unicom about cutting prices, he said.

"Price cuts will benefit mainly Beijing Mobile's higher-end users," he added.

Subscribers to China Mobile's GoTone service in Beijing typically pay 50 yuan (US$6.25) per month in subscription fees and 0.4 yuan (US$0.05) per minute for both receiving and making calls.

This charging scheme has remained largely unchanged for years.

According to China Mobile's proposed packages approved by the MII yesterday, the cuts will be very significant.

For instance, subscribers will be able to choose a package that charges only 10 yuan (US$1.25) to receive 500 minutes of mobile calls.

That works out at just 0.02 yuan per minute.

Subscribers can also choose a package that charges 168 yuan (US$21) for 700 minutes of calls. This includes calls made and received.

This works out at 0.24 yuan (US$0.03) per minute.

From February, mobile subscribers to China Mobile's GoTone service in Shanghai were given a choice of packages charging 60 yuan (US$7.5) for 360 minutes of phone calls, which works out to an average of 0.17 yuan (US$0.02) per minute. In Hangzhou, average charges are 99 yuan (US$12.3) for 700 minutes of phone calls, or 0.14 yuan (US$0.016) per minute.

Pang said Unicom would soon unveil several packages designed to lower charges.

"China Unicom's fees are much less than China Mobile's," Pang added.

Unicom is allowed to charge 10 percent less than China Mobile under a government policy designed to protect the smaller China Unicom.

In Beijing, Unicom already has in place a de facto one-way charging system targeting low-end subscribers.

China currently has more than 400 million mobile phone users.

(China Daily May 9, 2006)

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