After the EU announced its measures to get telcos to reduce roaming charges, ASEAN may be following suit. The issue was brought up at a recent meeting of ASEAN heads in Bali.

The AFP reported the proposal, citing a statement made by a Malaysian minister. THe minister in question, Energy, Water and Communications Minister Shaziman Abu Mansor said the reduction was necessary as charges were exceptionally high. He also said that the reduction would likely start with Singapore first. Other leaders agreed to the plan during a meeting of member representatives from the Association of Southeast Asian Nations (ASEAN).

One justification of such a plan, said Shaziman, was to reduce the burden of thousands of Malaysians who commute to Singapore to work. Currently, roaming rates can go from 1.50 ringgit (0.43 dollars) per minute in Singapore and escalate to 9.00 per minute to roam in Cambodia. This is a big contrast compared to the 30 sen per minute Maxis charges for local calls.

In contrast, the EU has set limits on roaming charges, with a maximum of about 34p a minute for making calls and 17p to receive them. EU Telecommunications Commissioner Vivian Reding has long deplored what she called “fantasy costs” which were merely huge penalties for using mobile phones abroad.

The problem is that it costs money to connect different networks, with fees called “termination rates” or what one telco charges another network to connect a call. Telco industries have complained about the pressure to reduce both termination rates as well as roaming charges, claiming the fear of bankruptcy if costs aren’t recouped somehow.

What is a worry is that consumers might bear the brunt of telcos missing out on the fees they previously charged its customers. Telcos might just raise domestic rates to make up for the revenue loss. Will customers willingly absorb higher costs so they can stay connected for cheap while travelling? Not everyone travels enough for mobile roaming costs to be an issue. This begs the question: should the many pay for the privilege of the few?

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Entry was posted on Sunday, October 5th, 2008 at 2:13 pm under Uncategorized.

Read more entries by Erna Mahyuni.
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