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China's Telecom Carriers Cut International But Not Domestic Roaming Rates

China Telecom lowered its charges for roaming services for international, Hong Kong, Macau and Taiwan regions on 1 July. China Mobile and China Unicom already made similar cuts earlier.

These downward adjustments of rates by China's three telecom giants are all for international roaming. No obvious adjustments have been made for domestic roaming which operates at virtually "zero cost". Charges for domestic roaming calls have remained unchanged for many years and there is room for reduction.

Charging for zero-cost domestic roaming calls is the result of regional segmentation of China's telecom industry. There is still no full-network audit for the telecom industry in China. For example, subscribers of Beijing Mobile cannot use their service packages once they leave the Chinese capital. They cannot open the packages offered by telecom operators in other cities either and can only make calls at a unified "retail price" that applies nationwide. This is why callers have to pay for domestic roaming.

According to the Ministry of Industry and Information Technology, mobile domestic long-distance calls reached 275.38 billion minutes in May this year, with international long-distance calls including international roaming making up less than 480 million minutes, less than 0.18% of domestic long-distance calls. This means that the slashing of international roaming charges will only benefit a small number of outbound tourists.

Although some carriers indicated their intention to lower the annual rental for broadband lines in their recent price cut announcements, none of them offered obvious adjustments to their basic charges for voice call and data usage. Most of them just offered new service packages to honour their price cut pledge. Subscribers may even have to pay to enjoy the "price cut bonus".

Reform of charging standards for China's telecom service has long been overdue. Charges may become guaranteed sources of profit after long-time practice and become "unalterable charges" that are difficult to abolish or cut. An online survey on roaming charges conducted by the former Ministry of Information Industry in 2007 showed that as many as 64% of the close to 30,000 respondents surveyed said domestic roaming service should be charged at the same rate as local calls, which means they were against charging for domestic roaming.

Content provided by Picture: HKTDC Research
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