opinion


Roamers outside Europe paying price for reduced rates

 
 
 
 
European mobile operators have raised the price of roaming calls into the European Union by as much as 163 per cent as they seek to offset losses from reduced charges within Europe.

The introduction of the Eurotariff in June, and its enforcement in September, capped European roaming charges at 49 eurocents per minute for calls made abroad and 24 eurocents for calls received abroad, excluding VAT, hitting operator revenues hard.

As a result, analysts at telecoms.com parent, Informa Telecoms & Media, reveal that operators have jacked up their roaming charges outside Europe to make up the shortfall.

European regulators have no legislative powers to regulate the cost of roaming outside their own territories, but they say they are well aware of the situation and are considering ways of remedying it.

Informa said its analysis was based on the percentage change in aggregated roaming prices on a country by country basis between 2006 and 2008.

For example, the average price of a call home to Italy made by a subscriber roaming in Russia was Eur3.67 (excluding VAT) per minute in 2006 but had risen 25 per cent to Eur4.58 since the Eurotariff came into play.

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 analyst Angela Stainthorpe said that since the EU roaming regulation came into force, operators have reported roaming revenue declines into the hundreds of millions of Euros. “As roaming traffic growth hasn’t kept up with falling tariffs, operators are looking elsewhere to recoup their losses.

“Although only 15 per cent of EU roamers are travelling outside the EU, the high per minute rates they pay for the privilege have had a significant impact on roaming strategy. In some cases, countries that were once relatively unimportant to EU operators have now been elevated to prime position purely as a result of their contribution to roaming revenues.”

The EC said it is concerned about the price hikes but is powerless to legislate outside its domain. Meanwhile, UK regulator Ofcom is working with the European Regulator Group (ERG), which represents regulators both within and without the EU, to “monitor the situation”.


One comment

  1. Avatar Pascal Nderitu 02/06/2008 @ 10:52 am

    I have always been amazed at how much operators rolled over and paid regulators for licenses when they knew very well that this was not sustainable. If these operators think that they are going to mile subscribers roaming out of Europe, then they are in for a rude shock. If usage patterns especially within migrant communities in developing countries is something to go by, then expect these larger entworks to reconsider their ‘foreign roaming’ strategy plans.

    With the exception of East and parts of Central Africa where networks have a seamless roaming tariff across all partner networks (including competing ones), many travellers opt to purchase a local pre-paid starter pack. The same is likely to apply for European travellers into Africa for instance. Why should one pay exhorbitant roaming rates when you can leave a voice message telling everyone that you are out of town, buy a pre-paid started pack once you land and inform the office back hom of your new number. This is what is happening and hence the MOU between networks in enighbouring EAC mobile networks.

    Initially, these networks in Europe expected to reap millions in data, VOIP and VAS traffic only to find that their predictions were as accurate as the search for WMDs.

    A tip for anyone travelling from Europe to Africa and not on a company-funded GSM line is to buy a local sim as soon as they land. The roaming SMS scenario is almost as expensive as normal roaming so do not wast your time asking your service provider to enable it. Once you have your new ‘local’ number activated, you can then inform importact contacts .

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