Prices for roaming in Europe are set to drop after the European Parliament and Danish Presidency of the Council of Ministers provisionally agreed a deal to revamp the market, forcing operators in Europe to lower costs when their customers use their devices abroad.
The plans, which will be voted on in the European Parliament in May, could see roaming prices lowered to 29 Cents per minute for calls and 70 Cents per MB for internet access in July 2012, if approved. They will then decrease further to 19 Cents per minute for calls and 20 Cents per MB for internet access by 2014. The European Parliament aims to bring roaming tariffs into line with domestic prices by 2015.
In addition, operators would have to enable customers to buy roaming services separately from July 1 2014, allowing them to chose alternative service suppliers for roaming whilst retaining their chosen operator for domestic use and keeping their domestic phone number. Home country providers would have to inform their customers of this right and any switch to an alternative roaming service provider would have to be free of charge.
Domestic mobile service suppliers would also have to enable their customers to access local mobile data services while abroad without having to unsubscribe from their existing data roaming contract or arrangement, and while keeping their mobile number.
According to Paul Lambert, senior analyst at Informa Telecoms & Media, the agreement poses the most profound change that operators have to deal with since European roaming regulation first came into effect in 2007.
He said that although the willingness of European consumers to buy mobile services from operators other than their home service provider is hard to gauge, the proposals will significantly increase the pressure on mobile operators to offer more competitive roaming rates to their customers.
“This will in turn reduce roaming revenues at a faster rate of decline than has been seen in recent years, potentially leading to more expensive mobile services for consumers in their home market – the “waterbed effect” operators often speak about when discussing the effects of roaming regulation.”
Lambert added that the European politicians have largely been unimpressed by the way in which and the speed with which operators in the region have reduced roaming rates. They perceive that European operators have done just enough to reduce rates in line with the different price ceilings that have been put in place since 2007 and that fundamental structural changes are needed to bring rates more in line with the rates consumers pay while at home.
“On the other side of the debate, operators have long been entrenched in the mindset that roaming is a premium service and should be charged accordingly – at a premium to home rates. While they have long enjoyed significant revenues from this position, persistent noises from the European Parliament and Council, along with a willingness to act on them, should have made it clear to them that they could only enjoy this position for so long.”
Bengt Beier, coordinator of the citizens’ initiative Europeans for Fair Roaming added that the interest group had hoped for a faster reduction in prices, but welcomed the news nonetheless.
“For a short time, it looked like some governments were more interested in corporate interests than in consumer-friendly prices. But the deal struck will not only prevent consumers from suffering high prices but will also help the European economy in general.”
Will regulators ever be able to catch up with the rate of change in the telco/tech industry?
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