Free roaming to cost telcos $400mn


2 May 2011
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Abolition of roaming charges as proposed in the draft National Telecom Policy 2011 is expected to result in a revenue loss of about USD 400 million for leading telecom service providers.

"The Indian roaming market is estimated to be around USD 600 million (roaming charges plus call tariffs). Telecom operators together will lose to the tune of USD 400 million if it is implemented," Telecom Industry Leader at Ernst and Young, Prashant Singhal, told PTI. He, however, added that the real impact can be assessed based on the elasticity of demand.

"The demand may rise in future but I don''t see much impact on elasticity of demand. Falling tariffs have encouraged people in making calls while they are on roaming," he said.

Meanwhile, global rating firm Fitch said the draft National Telecom Policy's (NTP's) indication to remove roaming charges is negative for Indian telecom companies as revenue from this segment accounts for 4 to 7 per cent of overall revenue of the service providers.

Gartner Research Director Kamlesh Bhatia said operators having a major market share will tend to lose revenue. "Ambiguity has now shifted from vision to execution. We will have what mechanism is adopted by the final policy to compensate telecom operators," Bhatia said.

On the other hand CMDA industry body Association of Unified Telecom Service Providers of India (Auspi) supported government's move to abolish roaming charges. ''It is a move which will empower subscribers and Auspi will supports government's move to abolish roaming charges," Auspi Secretary General SC Khanna said.

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