Hearing sets off debate

31 Jan 2008

While officials try to work up a final proposal on roaming prices, last week's public hearing has sparked a debates around just how telecom policies should be set.

Far and away the biggest complaint was that the carriers were unwilling to share their costs.

Jiang Xian, a Shanghai consumer representative to the hearing, says the discussion was meaningless with out it. Prices after all are set on the basis of costs, he said. Another expert is quoted as saying: that anyone who could calculate the costs on the evidence available was worthy of a Nobel Prize!

The hearing was convened by the MII, the NDRC and the MII research arm, CATR. With all that accumulated brain power and political clout, why, asked another consumer advocate, couldn't the three agencies have disclosed the cost information themselves‾

The costings aside, others pointed to flaws in the way the hearing was run, according to CCTV's Economic Half-hour, broadcast just days after the event

Under the "Government Price Determination Consultation Method", material for a public hearing on prices must be sent well in advance. In fact, the 18 participants received the two draft proposals just the day before the hearing.

Critics noted that that no-one from any independent price-setting agencies was invited, as the rules on price-setting hearings also stipulate. Instead, the hearing comprised five consumer representatives, five operator executives, and eight officials and experts.

Finally, some consumer representatives mocked the operators' understanding of their own market.

Hubei consumer delegate Qiao Xinsheng said it was "a joke" that mobile operators refused to make deep price cuts. "Because if you cut, nobody will use a fixed-line phone - everyone will use mobile."

Recent experience bears him out. Last year's elimination of two-way calling led to a surge in mobile subs and a massive hemorrhaging of fixed-line customers.

The hearing process was certainly flawed. Yet in the absence of genuine competition, and a reluctance by both SASAC and the carriers to eliminate domestic roaming fees, it has made some progress. Roaming charges will fall shortly, and the arrival of a third carrier on the scene shortly will surely drive prices down further.

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