Operators offer unlimited overseas calls but charge customers local airtime fees
Mobile service operators are offering low-cost flat monthly rate plans for international direct dialling (IDD) calls now that IDD wholesale rates have dropped to unprecedented lows.
The 'all-you-can-speak' IDD mobile services follow similar plans offered by fixed-line peers such as Hutchison Global Communications and Hong Kong Broadband Network (HKBN), which began offering flat-rate IDD plans last month for less than $40.
Since early last month, Hutchison Telecom has been offering an unlimited IDD service for $38 per month.
New World Mobility has launched a roaming-IDD prepaid card service for as low as $60. The card, which can be topped up after all credits are used, allows users to make IDD calls to 23 countries for just the cost of local airtime.
China Resources Peoples Telephone will soon offer a $98 IDD prepaid card service.
While per-minute IDD charges for these plans had been waived, mobile operators charged a local airtime fee that allowed them to cover IDD wholesale costs and protect their profit margins, industry players said.
This differs from the services offered by fixed-line players, which do not impose per-minute airtime fees and thus, essentially, allow users to make unlimited calls.
The 25 cent local airtime fee charged by New World for its flat-rate IDD service is higher than the 16 cents per minute it charges for a local call. A source said this allowed the operator to cover its IDD wholesale costs.
One industry player said mobile operators were able to offer the cut-rate plans because their IDD wholesale charges had fallen to below one US cent per minute to popular destinations such as the United States, China, Singapore, Canada and Taiwan.
'Operators are also able to get lower wholesale rates because they can choose a route that offers lower-quality connectivity to overseas numbers,' an industry source explained.
But mobile operators with more high-spending corporate customers were more likely to stay away from flat-rate IDD plans, the source said.
'Making IDD calls on mobile phones is important for these corporate customers, so operators have more incentive to offer them good-quality connectivity,' she said.