Sat, Sep 02, 2006 - Page 12 News List

NCC's proposal attempts to lower phone service fee

By Lisa Wang  /  STAFF REPORTER

Phone users may see their expenses drop by up to 8 percent if the proposal by the telecommunications industry regulator to cap the rates on mobile and fixed-line services goes into effect as early as next April.

The National Communications Commission currently restricts local telecom operators from hiking rates. However, it is considering taking more aggressive steps to ask carriers to pass on cost reductions to subscribers.

The commission on Thursday proposed a new formula, which will be used to decide how phone rates should be adjusted to better reflect industry conditions and safeguard consumers' rights.

"The commission aims to ask telecom companies to further improve their operating efficiency, technologies and cost-saving measures, which should ultimately lead to a more reasonable rate for consumers," it said in a statement.

Based on the commission's proposed formula, mobile telecom service carriers should cut rates if the product of the formula -- consumer price index (CPI) growth rate minus "X" (tentatively set at 10 percent) -- is negative.

With the nation's statistics agency forecasting a year-on-year CPI growth of 2 percent this year, mobile operators may have to lower charges by up to 8 percent based on the proposal.

Domestic telecom operators led by Chunghwa Telecom Co (中華電信) declined to comment on the impact of the proposal, although the new rules could deal a blow to their operations.

Local phone operators are already finding it harder and harder to increase revenues given a saturated and fiercely competitive telecom market.

Before finalizing the "X" figure, the commission welcomes opinions and advice about the proposed formula from telecom companies and industry experts during the 15-day period that runs until Sept. 15.

The new rules may go into effect as early as next April after a few months' grace period as the commission hopes to finalize the rule by the end of this year, it said.

The new rules -- which does not need to go through the legislature for approval based on the Telecommunications Law (電信法) -- will last for three years, the commission said.

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