European data roaming costs drop 25%, research claims

Mobile data services are on a stellar growth curve in Europe, with the region adopting 3G faster than anywhere else in the world, and research now claims the cost of data roaming is coming down too.

According to statistics released by international management consultants AT Kearney on Wednesday, the EU’s mobile data market, excluding text messaging, grew by 40 per cent to Eur7bn in 2007 as operators invested more than Eur20bn in their mobile networks and services.

As of the end of April, the number of 3G users in the EU doubled to 112 million, compared to a year ago, with the proportion of people in the region using 3G at 22.5 per cent. By comparison, the penetration of 3G into the US and Canadian consumer base is estimated at18.4 per cent, while in Asia-Pacific stands at 3.7 per cent.

The driver is lower barriers to entry. It’s well known that the cost of 3G services, handsets, laptops and dongles is falling steadily, with mobile data packages available for as little as Eur10 per month, but AT Kearney also estimates that the average retail price of data roaming services fell 25 per cent in the year to April, while EU data roaming traffic grew 75 per cent over the same period.

“Competition, including from wifi, is delivering dramatic reductions in the retail price of data services, which give mobile users the convenience of being able to access email, the internet and other multimedia services wherever they travel within Europe,” said Tom Phillips, chief government & regulatory affairs officer at industry body the GSMA, which commissioned the research. “We expect prices to continue to fall as operators further innovate around tariffs and more and more Europeans use these services as a part of their everyday lives.”

The news comes as EU Telecoms Commissioner Viviane Reding turns her regulatory eye onto SMS and data roaming services. If data roaming prices have come down as much as the GSMA claims, it is perhaps in anticipation of regulation.

Earlier this year, Spanish carrier Telefonica, which owns the O2 group of companies, proposed to cut the cost of mobile data services when roaming by as much as 40 per cent, shortly after Reding warned that research highlighted the fact that prices for SMS and data roaming services, which are currently not regulated, “remain high with a very diverse pattern across Member States.”

The Commissioner said that a decision would be made by the end of this year on whether the charges for these services also need to be regulated.

But it has been revealed that EU operators are looking elsewhere to make up the revenues shortfall from regulatory price caps. Last month, telecoms.com parent and industry analyst Informa Telecoms & Media, revealed that European mobile operators have raised the price of roaming calls into the European Union by as much as 163 per cent, in the wake of the Eurotariff.

A German mobile user outside the EU has seen a massive 163.7 per cent price increase since 2006 for a call home from Africa, Informa said.