Austrian carriers blast roaming rate caps

The mobile operators in Austria’s highly competitive market took a break from bitter rivalry on Friday to jointly release research demonstrating the damage done by the EU’s caps on roaming voice prices.

The study, commissioned by mobilkom austria, T-Mobile Austria and Orange Austria, claims that the three carriers have experienced a total EBITDA decline of Eur81.5m, which is directly attributable to the roaming voice price caps introduced in 2007.

Austrian telecommunications expert, Professor Kruse from the Helmut Schmidt University of Hamburg, presented the independent research, which claims that the EBITDA decline has a direct impact on the investment budgets of the three providers, which decreased by 41.2 per cent in the first half of 2008 compared to the same period of the previous year.

In absolute terms, this means budgets of Eur128.3m in the first half of 2008 versus Eur218.2m in the first half of 2007.

Moreover, the call volume effects forecasted by the EU did not take place, despite the fact that the average price per roaming minute, for both active and passive calls, decreased by 43 per cent. The three mobile operators only claim increases of 3.7 per cent for active roaming minutes (calls made) and of 10.3 per cent for passive roaming minutes (calls received).

Essentially, the research claims price cuts could not be compensated with rising call volumes, and since the introduction of the price caps, voice roaming revenues from active roaming minutes have decreased by 41.4 per cent for all three mobile providers compared to the previous year. For passive roaming minutes the drop in revenues amounted to 37.4 per cent.

“Since its deregulation, the Austrian telecommunications market has been marked by intensive competition, which has led to considerable price reductions for the benefit of the Austrian customers. However, the central intervention measures of the European Commission in some areas of the price shaping process have resulted in negative effects on national price structures,” said Kruse.