China consumer group calls for telcos to slash rentals

Robert Clark
telecomasia.net
The influential Beijing Consumers’ Association has called for China’s fixed-line operators to cut monthly landline rental charges by more than half.
 
The consumer group has argued that because of new technology and greater scale costs have come down dramatically since the last price cut ten years ago, Beijing Daily said.
 
Although China Telecom charges customers just 21.6 yuan ($3.16) a month, the association said that fixed-line charges were the subject of the biggest number of telecom complaints from Beijing consumers last year.
 
The Ministry of Industry and Information Technology (MIIT) and the National Development and Reform Commission (NDRC) announced last November that they would move to a price-cap system in regulating telecom call charges, giving operators more autonomy in setting prices.
 
Prof Yang Peifang, head of the China Information Economics Society, told the Daily that Chinese agencies had found it difficult to accurately measure the cost of the monthly landline rental because of the number of services shared across telcos’ infrastructure.
 
But based on international analyses, and factoring in the wide deployment of high-capacity fiber networks, he estimated that costs “have already fallen massively, to one-thousandth, even one ten-thousandth,” over the past decade.
 
“The current fixed-line voice rental fee is still quite high,” he said.
 
Yang said based on that cost analysis, telcos should cut the rental fee by at least half, or at least include a certain number of free minutes.
 
However, the Consumers’ Association said that free minutes were not enough compensation for consumers who were already paying the rental charge.
 
It argues that carriers should recognize the massive shift to mobile telephony and change their business model by cutting their monthly fee profit target and more heavily promoting value-added services.
 
CA is about to begin lobbying operators, the MIIT and NDRC over the rental fee, and will push for an “early” decision by regulators, the Daily said.

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