Beijing's plan to cut domestic roaming charges will pave the way for reductions in overall mobile-phone tariffs in the lead-up a restructuring of the telecommunications industry, sources said. A public hearing on the need for cuts to roaming charges will be held tomorrow. The meeting has been organised by the National Development and Reform Commission and the Ministry of Information Industry. Roaming charges apply when a user makes or receives calls outside the province or city in which the service is registered. Users have long criticised the tariffs as too high, especially as the service incurs almost no additional cost to operators. According to a ministry announcement, the government plans to cancel the 20 fen per minute additional charge. It also suggests setting an upper limit on basic fees for making and receiving domestic roaming calls at 70 fen per minute and 30 fen per minute, respectively. 'The new domestic roaming tariffs introduce a calling-party-pays mechanism in which users no longer need to pay for local voice tariffs on top of domestic roaming fees when they receive calls in other provinces,' Gan Kaili, a professor at Beijing University of Posts and Telecommunications said at the weekend. Mr Gan also said the new mechanism would avoid the double charge that now applied for domestic roaming services. 'When a Beijing user in Shanghai makes a phone call to his Shanghai friend he should not be charged roaming fees. It's a local call only and we hope to reduce this unreasonable arrangement in the new mechanism,' he said. Domestic roaming charges account for 12 per cent of revenue at China Mobile, the nation's top mobile operator and 8 per cent of revenue for China Unicom, according to a report by Cazenove. Market observers said a sharp fall in roaming charges should not hurt China Mobile's revenue growth but might impact on China Unicom. 'China Mobile should be able to offset the fall in roaming revenue by boosting overall usage. This is mainly because China Mobile's users are more price elastic,' said Marvin Lo, a telecommunications analyst at Daiwa Institute of Research. Mr Lo said China Mobile had proved that its customers reacted positively to price cuts. Reductions in tariffs of 19 per cent in the first half of last year led to a 20 per cent jump in call volumes. However, China Unicom did not benefit as much from a reduction in tariffs as usage did not rise sufficiently. Although consumers would welcome a cut in roaming charges, analysts said a pricing mechanism was needed to prevent users from taking advantage of the system. 'There is a need for domestic roaming fees, partly to prevent a mobile user from avoiding long-distant call fees by opening accounts in other provinces,' Cazenove telecommunications analyst Glenda Yu said. Ms Yu said the new pricing system, expected to take effect this year, would have a limited impact on total revenues, as the lower tariffs would stimulate subscriber growth. 'We expect the government will issue further regulations to lower mobile tariffs this year and the reduction in domestic roaming charges will be the first step,' she said.