Free Roaming: Is it really worth the hype?

The year 2013 is slated to bring a big joy for the mobile subscribers in India as the government of India plans to do away with roaming charges which means that now, you won’t have to pay extra money when you’re out of your home circle as well as no charges for the incoming calls you receive when you’re out on a family holiday!

Last week, Indian telecom operator Aircel, launched a new plan named ‘One Nation, One Rate’ which abolished roaming charges for it’s subscribers, offering same rate for Voice calls, Data as well as for SMS. With this plan, Aircel has become the first telecom operator in India, to offer free roaming and this comes.

As a customer, government’s plan of doing away with roaming charges surely brings a big smile on our faces. It means that now even if a subscriber is out of his home circle, he pays the same amount of money for calls/SMS he does in his home circle. Also, no charges for receiving calls while roaming and consequently, if you’re a prepaid customer, you won’t need to worry about disruption of services if you’re at zero-balance while roaming.

Another very important aspect relating to abolition of roaming charges is that in the future, if a subscriber needs to move into another city, he won’t need to lose-out on his existing mobile number. This becomes quite crucial for subscribers who have been using the same mobile numbers since many years, and changing it might be very difficult for them. These are some of the neat benefits, free roaming would bring along.

But, on the other hand almost all the telecom operators in India have been constantly showing their displeasure over the abolition of roaming charges and they have a strong reason to do so. Roaming charges account for over 10 percent of the total revenue for mobile operators and if these charges are waived off, companies would loose-out on this 10 percent of revenue. What it would mean is, they’ll have to figure out other ways to compensate for this loss, and it doesn’t take a genius to come to the conclusion that increase in tariffs would be the most viable options for these companies.

Let’s take a look at some interesting Numbers- Out of over 900-million mobile subscribers in India, less than 10 percent actually roam nationally and contribute towards roaming revenue for the mobile operators. But if the roaming charges are abolished and the telecom operators decide to hike tariffs as consequence, it would impact the total subscriber base and not just those 10 percent of the subscribers.

Mobile tariffs in India are already some of the lowest in the world and major operators like Airtel and Vodafone have hiked call rates and data tariffs of late owing to declining profits and rise in operating costs. Add to this, the loss in revenue from roaming charges, the companies would be forced to hike tariffs and we’re talking big hikes here.

Thus, the abolition of roaming charges might seem a great advantage at the first glace,and in no way are we saying that it isn’t. But, come to think of it, this move might require the subscribers to shell out more money eventually, in the long run.