Fully free roaming simply not practical: Trai

Trai chairman Rahul Khullar said telecom regulator trying to come as close as possible to Home Price Rule

The country's 867 million mobile phone users out of which over 100 million already use roaming services  might have to wait indefinitely for getting nationwide free roaming services.

Putting a dampener to their hopes, despite the government clearing a policy to move towards a free roaming regime last year, the Telecom Regulatory Authority of India (Trai)  today announced that this was not practical and instead announced a reduction in the cap imposed by it on roaming tariffs  by 29% to 57%, but did not make it free. It also fixed a cap on outgoing SMS's while roaming at Rs 1 for local  and Rs 1.50 for outstation, which were earlier under forebearance.     

It directed telcos to offer all customers two alternatives. Under the first plan,  consumers will have to pay a fixed  upfront charge to be decided by the telcos for getting  unlimited incoming roaming calls free. However they will have to continue to pay for outgoing roaming calls which would be at par with what they fork out in their home circle. 

Under the second option, consumers will not be charged any upfront amount, but incoming calls will be charged and outgoing call rates will be at par with that a consumer pays in his home circle. The new regime will be implemented from July 1st and it will be reviewed after a year.    

The move has been seen by many as the regulators attempt to assuge the  demand of telecom companies which had attacked the government for announcing free roaming saying that this would have an financial impact of over Rs 13,000 crore per annum.

Speaking at a press conference  Trai chairman Rahul Khullar today said, “Fully free roaming is simply not practical.We are trying to come as close as possible to Home Price Rule."  In Home Price Rule, call charges are same as the home circle when a mobile user roams to a different circle.  

Explaining as to why free roaming was not possible at the moment Khullar said:  “Compelling a transition to a fully free national roaming regime would result in telecom service providers not being able to recover their costs from roamers. In turn, telecom service providers would pass these costs on to all consumers (predominantly non-roamers) through higher tariffs. ”

However his estimation on the impact is far lower than that of the telcos. He says the  implementation of fully free roaming would cost telecom service providers about Rs 2,000-2,500 crore. According to Trai, only 13% of mobile subscribers roam from one circle to another.

However telecom experts say that by making roaming free consumers would have talked more and the additional revenue from more usage would have easily neutralised the adverse impact on teleco's loss of revenue.  Khullar says however that based on their calculation this premise is not true and they were left with no alternative but to come to a mid way path.  

“With increased subscribers and usage, the costs associated with national roaming have declined, but not vanished. There are still real costs incurred in providing the national roaming facility,” said the regulator. Besides, fully free roaming may also initiate mass migration of SIMs, it said.

According to the Trai statement, the ceiling tariffs for prescribed by Trai in 2007 were Rs 1.40 per minute for outgoing local calls and Rs 2.40 per minute for outgoing STD calls while on national roaming. However operators were in reality charging much below at Rs 1 for outgoing local calls and at an average of Rs 2 to Rs 2.25 for STD. For incoming calls the roaming charges currently are at Rs 1.50 to Rs 1.75 per minute.

The ceilings now have been reduced to Re 1 per minute and Re 1.50 per minute, respectively. Ceiling for incoming calls while on roaming have been reduced from Rs 1.75 per minute to 75 paise per minute, according to the Trai statement.

However telecom operators are not completly happy. Says COAI director general Rajan Matthew : "We have no room left for increasing roaming tariffs now. SMS revenues could be impacted as they were earlier under forbearance and we had recommeded them that they should continue to do so. But the good thingis Trai has left telcos to fix the upfront fee.".     

 
In March, communications and IT minister Kapil Sibal had said that the Government will try to start national free roaming by October this year.  The nationwide free roaming was announced as part of the National Telecom Policy 2012 that was approved in May 2012. As part of the One Nation – Free Roaming plan, consumers will not have to pay the hefty roaming changes while they are travelling out of their home telecom circle.