DoT proposed to change from the current 22-circle structure for telecom licenses to a single all-India license.
This will put an end to the definition of ‘outside home circle’ roaming charges as long as the subscriber is on-net i.e his own service provider’s network. This is a very good move from the consumer's stand point of view. From Telco's perspective, the move has merit as there are very little incremental costs of access on roaming if the subscriber is On-Net.
GSM Operators get 8% revenue from Roaming while it is 5% for CDMA Operators.
Good Move DoT. Go For it.
The removal of roaming charges is likely to be done in phases as opposed to a one-shot removal – which will give operators time to modify their tariff structures. Besides, the operators could introduce rental / distance-based tariff structures [ Tariffs for South India, North India, East India, Central and Western India] which could help offset some of the impact from the roaming cut.
Such new policy formulation is well within powers of the government. Further, the license contract allows the TRAI to step in and regulate tariffs (including roaming charges) at any time.
Status of Mobile Termination Charges (MTR) cut
The TRAI has concluded the consultation process on termination charges (last comments submitted in May 2011). It has to come up with final regulations, by publishing a Tariff Order document. However, incumbents have appealed in court and the case proceedings are on.
A reduction in termination rates would lead to a meaningful transfer of value (cash flow) from the incumbents to the new entrants. Since the impact is negative for incumbents and positive for new entrants, increasing tariffs by operators may not be a solution (on the other hand, new operators could actually cut tariffs and pass on the benefit to subscribers).
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