Telecom & Wireless

MIIT Orders Chinese Telecom Operators To Eliminate SMS Price Differences

China's Ministry of Industry and Information Technology and National Development and Reform Commission have jointly published a notice which orders Chinese telecom operators to set a unified price before January 15, 2009 for short messages sent within a network and between different networks.

Why are MIIT and NDRC worried about this all of a sudden in China? The price difference between short messages sent within a network and those sent to users in competing carriers is reportedly in violation of the Anti-Monopoly Law because it disrupts fair competition in the market and harms the interests and rights of consumers by increasing communication costs of consumers in competing networks.

Because of the business barriers among different telecom operators, the price difference has existed for long in China's telecom industry. Although the price difference of voice service in competing networks has been gradually removed, the price difference of various value-added services, including SMS, still exists in many areas in China. According to the current charging standards, a short message sent between users in the same network will cost the sender CNY0.1 or CNY0.15, while a message sent to a subscriber of a competing network will cost CNY0.05 more.

Reacting to the new order, a representative from China Mobile Beijing branch told local media that the company will stop launching charging methods which set different prices for short messages sent to competing networks and for those that already have a difference, the company will no longer develop new users for those services starting in January 1, 2009. China Unicom Beijing branch says although the company has not received a formal document about the new regulation, it acquired the information from other channels and the company will make relevant adjustments in accordance with the new rule.

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