Telcos can afford to cut roaming charges

BOTH Singapore and Malaysia want to reduce roaming rates for mobile phone users by the year-end. The commitment was made in Singapore on Tuesday.
That would mean travellers to Singapore will pay less to call back home or even receive calls using their mobile number while in the republic. It would be the same for travellers from the republic coming to Malaysia.
The last time this topic came up was in October 2008 when a study for rate cuts in Asean was talked about but not much progress was reported after that. Hopefully, roamers will not have to wait two years before the topic is revisited.
Judging from the reports coming from Singapore, the celcos there are willing to sit down and talk about it, so hopefully some consensus can be reached.
The suggested rate cut for voice and SMS is up to 30% and 50% respectively between the countries.
SMS cost 5 sen within Malaysia but jumps to RM1 when sent from Singapore.
Similarly, voice calls locally are from 5 sen per minute within Malaysia but soars to RM2 per minute when coming from Singapore.
Tourist arrivals into Malaysia from the republic hit 12.7 million in 2007 and even if someone makes two calls a day while in this country, you can imagine the volume of traffic generated.
But analysts crunching the numbers are saying that any cut in roaming charges between the two countries are not likely to dent the bottomlines of any celco as the cut is too small to make an impact. What this tells is that the margins for roaming charges are huge.
In Europe, the mobile network operators are said to be making profits of more than 200% for mobile calls made by users while they are in another European Union (EU) country, and 300% to 400% for calls received.
To be fair, operators here do periodically offer roaming discounts and some even have rate caps. Despite that, roaming charges ought to be reduced by more than half.
Consumers in Europe are going to enjoy mobile roaming charges cap by July 1. The big four – Vodafone, Telefonica 02, T-Mobile and Orange – got together to try to circumvent the three-year-old legislation but failed. The laws were implemented to protect consumers against excessive prices there.
A report said the maximum permitted charge for making a mobile call while travelling will fall to 32p a minute and the rate for receiving calls will drop to 12.5p a minute.
For data calls, users will be cut off once they reach around £41.20 of data roaming charges per month, unless there is an explicit agreement with the customer to bypass that.
Even the authorities in Australia and New Zealand are looking to cut rates for the Trans-Tasman area. This is given the big volume of roaming traffic between the countries, as about one million visitors travel annually between the two countries.
Roaming is not cheap and it can make your heart stop when you get a huge bill after a fabulous holiday. The bill shock has forced many to leave their phones at home or look for cheaper alternatives such as call-back cards to make phone calls while travelling.
Think of it this way. If EU can push its weight around so many countries and operators to cut rates despite the court action by the four, surely, the regulators in Malaysia and Singapore can make the operators come to some consensus.
But do not allow operators to drag their feet or roamers may never see a cut. Roamers have enriched celcos enough, so now is the time for operators to show they will charge fair and competitive prices and give a fair deal for roaming. The cut would make a great New Year’s gift.
If roaming for calls and SMS is not reduced, then roamers may have to wait forever for data roaming charges to come down as their data bills are just going to continue skyrocketing. That is another issue waiting to be addressed.

Deputy news editor B.K. Sidhu is glad that her hometown Malim Nawar has finally made headlines the last few days and hopes an overhead bridge for the railway tracks there can be built to restore the charm of the once bustling mining town.
(Published in The Star on June 18, 2010 - Friday Reflections by B.K. Sidhu)

Making effective use of USP fund

IT is a RM5bil question and the issue of contention is why the snail’s route is preferred in its distribution.
That figure is roughly what is sitting in the coffers of the telecoms industry regulator, Malaysian Communications and Multimedia Commission (MCMC).
As at end 2008, the amount was RM4.7bil but would have surpassed the RM5bil mark in 2009 given that about RM800mil is collected each year for the universal service provision (USP) fund. Telecom players in Malaysia part with 6% of their annual revenues to help bridge the digital divide in the country.
The fund was set up in 2003 as players were reluctant to go into non-profitable areas to offer telephony services. A lot has changed since and the fund can also now be used to deploy broadband and cellular services.
MCMC has identified over 350 underserved areas in the country that will have telephony/broadband/cellular access, but the pace of the entire process from tender to contract award is just far too slow and complex and creates uncertainties.
Players continue to wonder why so much money sits idle year after year when it could be put to better use to provide access to a bigger population. That would also mean players being able to recoup some of the investments they put into the USP fund every year.
What is really the problem here?
Last year, the regulator called for several tenders beginning May, July and August, and up to now only very few contracts to wire up the underserved areas have been given out. The reason for the delay is unclear but certainly it points to the evaluation process.
“There is lack of clarity even in the upfront briefing process and you can imagine what we have to go through to fill the tender documents, and when we cannot meet deadlines, we are penalised,’’ said one industry player.
One particular contract all the players are hoping for a part in is worth RM1.4bil to RM1.6bil and involves several parcels. The contract was to be awarded last year but nothing has come out of the tender.
The whole evaluation process aside, players have been waiting for two years for answers from the MCMC on the “clawback provision’’ where contributors are able to get back up to 50% of their contribution by applying to roll out their services in underserved areas. When is there going to be any communication from the MCMC on that?
To make matters worse, the pace at which payments are processed after jobs are completed can test even the most patient of the players.
About RM200mil of jobs have been completed but only RM30mil has been paid out, and this leaves doubts if players will receive timely payment if they were to take on more jobs from the regulator. Also, they are uncertain if the regulator checks on the completed jobs to see whether they follow the specs.
The delay raises more questions than answers at a time when our Prime Minister Datuk Seri Najib Tun Razak wants things to be done expeditiously.
So if things are not working out smoothly and the USP fund not being put to effective use, perhaps the model isn’t working out as planned. A review may be necessary to achieve the desired results or else ambiguity will continue to sow doubts in the minds of many.
Whatever the issues, the Government’s 50% broadband penetration rate by year-end must be met and the underserved areas should not be the stumbling block when there is RM5bil waiting to be put to work.
● Deputy news editor B.K. Sidhu hopes for greater transparency, clarity and fairness in the RM5bil distribution issue.
(Published in The Star on January 29, 2010 - Friday Reflections by B.K. Sidhu)