Tuesday, August 2, 2011

Travelers from mainland China can call home for as little as it costs to make a local call

When Su Xiaoqin, a Chinese translator living in Düsseldorf, calls family and friends back in Shanghai, she does not use the mobile network of her German operator, O2. She pops in the SIM card for China Mobile.
As a result, Ms. Su’s calls home cost as little as 2.86 renminbi, or 44 cents, a minute, a small fraction of what a call using the German SIM card would run. That is because China Mobile, the world’s largest operator, with 617 million customers, recently cut its international roaming rates, following similar cuts by its domestic rivals, China Unicom and China Telecom.
 “The word has gotten around that the Chinese operators now have the best rates to China,” Ms. Su said.
While Europeans and Americans traveling abroad still face steep roaming charges, travelers from mainland China can call home for as little as it costs to make a local call in that market.
In part, that reflects the growing global clout of the Chinese mobile phone industry, where the three big operators, with a combined 889 million customers, are able to negotiate less expensive roaming deals for their users with international operators.
As a result, one should not expect the lower roaming prices paid by travelers from the mainland to come soon to consumers in Europe, the United States or other parts of the world. In part, that is because European and U.S. operators do not compete directly with their counterparts in China for mobile customers, so they have little financial incentive to match the lower prices.
David Dyson, the chief executive of Three U.K., a British mobile phone operator owned by Hutchison Whampoa, the Hong Kong company, cited another reason. He said that high roaming prices in Europe, especially for downloading data, reflected the operators’ profit expectations, not the true costs of service.
Mr. Dyson said that smaller operators, especially, could not lower roaming rates because of what it costs them to connect calls using the networks of larger operators, whose rates are driven by those profit demands.

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