Get busy whingeing, or get busy winning
The European Union is not playing games on mobile roaming. Or is it? It has said it wants to remove fees for receiving a roaming call, and wants roaming charges within the EU to be the same as home network calls. Its mechanisms will be the introduction of wholesale cost orientation and retail price controls, and it has given the industry only a short window in which to further make its point.
The Commission has been concerned about roaming charges since 2000, with some anti-trust legislation taking place in certain member countries. Then in September 2005 it began to get serious, setting up a website tracking roaming charges, and making it clear to the industry that unless it did something to reduce the cost of moble roaming, it would take action.
Now, said, Information Society and Media Commissioner Viviane Reding, “The price for a standard four-minute call has generally remained at the same high level across Europe since September 2005, and in some cases has even increased, despite warnings from the Commission to the industry that EU-wide regulation would be necessary if prices were not brought down.”
The Commission found that:
“The updated Commission website launched today – which is available in English, French, German, Italian, Spanish and Polish – shows that for a four-minute call, roaming prices still vary from as little as €0.20 for a Finnish consumer calling home from Sweden to €13.05 for a four-minute call by a Maltese consumer in Latvia. In some cases, roaming prices have even increased over the past six months: In the UK, one operator has increased the price for roaming from €3.45 to €4.92 when consumers call home across the EU. Lithuanian customers are charged for a four minute call from France between €4.41 and a staggering €12.08.”
Reding said the following action would be taken.
• Wholesale price: The EU regulation would ensure that operators do not charge operators from other countries substantially more than the actual cost.
• Retail price: To ensure that operator savings at the wholesale level are actually passed on to the consumer, the Commission sees also a need for regulation at the retail level.
• The new EU regulation could in particular eliminate all roaming charges for receiving a call when traveling abroad in the EU.
• In addition, for calls made while travelling abroad in the EU, the new EU regulation could introduce the “home pricing” principle. A mobile customer travelling abroad in the EU would always be charged only the prices that he is used to paying in his country of residence.
Finally, the Comission, which had a previous consultation period from 20 February to 22 March, said there would now be a further consultation period ending on 28 April.
Not surprisingly, the industry wasn’t too chuffed at the idea of regulatory involvement in wholesale and retail pricing.
First off the block was the GSM Association (whose motto. don’t forget, mentions calling party pays as a founding principal of GSM – except, presumably, where roaming is concerned).
The GSMA had asked for a minimum eight week response period, so was upset in any case at the four week window. It described the proposals as ” unprecedented, unnecessary and heavy-handed.”
It claimed that roaming prices had fallen by 8% “last year”, and proposals to cut roaming costs to home network costs didn’t reflect the complexity of carrying a roaming call.
Stefano Nicoletti, Senior Analyst, Ovum said, “We expect the industry to react strongly and challenge this decision, which could take away pretty much all their roaming revenues, but it now seems that everything has been decided – it might be too late!”
Well, is it? Obviously the loss of roaming revenues would be catastrophic, and the question is – do the operators think they have a case for challenging the decision? It also hasn’t been approved at EU level so there is another fight to be had there.
Even those working within the industry have described roaming charges as “unreasonably” high, so there is recognition that comething will have to give. Best bet perhaps is some high level challenges to the proposals, a storm of paper-work during the consultation. Then watered down proposals, followed later by cuts in roaming charges, but not to the “home network” level.
One way operators could start is to be very transparent to the consumer about roaming, to stop the bill-shock phenomenom. Vodafone, for one, has made some steps to simplify its roaming charges. Another answer is to offset profitability cuts by increasing volumes. There are still armies of travellers not using their phones abroad – either because of fear of the cost, or simply because, as pre-paid users, they can’t. Operators can also introduce IN based solutions that reduce tromboning and the actual cost to the operator of carrying a call.