The Ministry of Information Industry, China's telecom regulator, has set a flat fee for calls between the country's two major mobile phone networks in a further step toward sorting out the jumble of interconnection charges in the fast-growing wireless market, announcing that from December 1, calls between China Mobile and China United Telecommunications would be charged an interconnection fee of 0.06 yuan ($1=CNY8.28) a minute.

This move has been widely anticipated and is rekindling the debate on an even more important issue: how the government will alter interconnection fees for calls made between mobile phones and fixed lines. Currently, mobile phone operators do not pay a flat interconnection fee – such fees are negotiated privately on a bilateral basis, analysts say. The new flat fee matches a levy already imposed on calls from mobile phones to fixed-line subscribers. At present, there's no interconnection fee for fixed-line calls to mobile phones.

"We don't think there will be a significant impact on the company because the interconnection fee settlement between the two mobile network operators is in balance," a spokeswoman from China Unicom said. A China Mobile spokesman said in a statement: "Given that the volumes of outgoing call traffic and incoming call traffic between our company and the other mobile operator are broadly in line, the new requirement isn't expected to have any material impact on our financials."

Both network operators have said traffic between them is roughly similar, which means interconnection charges paid and received should offset each other, they say. "In future, it will depend on traffic flow in and out of the carriers' networks," said Shao Qiutao, a telecom analyst at Guosen Securities. "If there are more outgoing calls to the other network than incoming calls, the company's costs will rise."


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