KUCHING: The agreement to cut roaming rates between select Malaysian and Singaporean mobile operators was seen as the basis for other Asean member countries to emulate as part of a longer-term aspiration for the Asean ICT Masterplan 2015.
RATE CUT: Photo shows Rais (centre) and delegates during the official launch of the Asean ICT Masterplan 2015 earlier this year. The cut for roaming rates by 20 per cent for voice calls and 30 per cent for SMS will take effect from May 1 onwards. — Bernama photo
According to the telecommunications analyst from OSK Research Sdn Bhd (OSK Research), the agreement signed between the two countries would serve as a stepping stone towards achieving the goal of reducing roaming rates between countries within the Asean region.
“Given the different regulatory settings and challenges faced by the Malaysian and Singaporean telcos, we think an Asean collaboration would be a tall order, but not insurmountable,” affirmed the analyst.
“This proposal is perhaps similar to that adopted by the European Union, under which lower roaming tariffs called Eurotariffs were introduced in June 2007 for its 27 member countries, following a directive from the European Commission.” OSK Research noted that the initial proposal to reduce roaming rates between both countries was first mooted in 2007 and re-kindled in mid-2010 with much discontentment on the part of mobile operators.
Nevertheless, the plan was pushed forward after an announcement made by Malaysia’s Minister of Information, Communications and Culture Datuk Seri Dr Rais Yatim and Singapore’s Minister of Information, Communications and Arts Lui Tuck Yew, during an Asean Telecommunications and Information Technology Ministers meeting earlier this year.
“We believe the operators have reached a compromise after extended discussions and intense lobbying with their respective telecom regulators, and taking into account a further reduction 12 months down the road,” he added.
The cut for roaming rates by 20 per cent for voice calls and 30 per cent for short-messaging services (SMS) would take effect from May 1 onwards.
From this venture, the OSK Research analyst believed that Singaporean telcos generally had more to lose.
This was ascribed to the fact that Singapore held a higher proportion of roaming revenue, in addition to having more roamers on their network, both inbound and outbound.
“A reciprocal 20 per cent reduction in roaming tariffs between the two countries would slice off Singapore’s mobile revenue by one to two per cent, compared with an estimated 0.5-0.9 per cent for Malaysian telcos,” the analyst projected.
This was assuming a third of telcos’ roaming revenue was derived from inbound and outbound roamers in both countries.
“Nevertheless, we believe the downside on mobile revenues will be mitigated by the fact that operators actively share and swap minutes with one another.”
While lower roaming rates were typically negative for the telcos in the short term given the inelastic nature of roaming calls, OSK Research expected this move to stimulate usage in the longer term to offset the revenue dilution.
The research firm concluded by maintaining its neutral outlook for the sector.