EU Operators Offset Eurotariff With Rate Hike for non-EU Roaming
European operators have raised the price of roaming calls into the European Union as much as 163 per cent since the introduction of the Eurotariff to compensate for the loss of roaming revenues within Europe, according to research from Informa Telecoms & Media.
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.
The researchers’ analysis was based on the percentage change in aggregated roaming prices on a country-by-country basis between 2006 and 2008.
The findings, extracted from a forthcoming Informa Telecoms & Media strategic report, Global Mobile Roaming, Forecasts 2008-2013, were first reported last month in the Global Mobile research service.
For example, the average price of a call home to Italy made by a subscriber roaming in Russia was EUR3.67 (USD5.74) a minute in 2006 but has 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.
The researchers published a table of the average change in price to call home from outside the EU.
The EC’s Eurotariff, which came into effect June 30, capped roaming prices at EUR0.49 a minute for calls made within the EU by subscribers of European mobile operators.
The author of the report, Angela Stainthorpe, comments 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,” Stainthorpe says. “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.”
UK regulator Ofcom is working with the European Regulator Group (ERG), which represents the regulators of both EU and non-EU European countries, in “monitoring the situation” regarding the cost of roaming outside the EU. The ERG has collected data about retail and wholesale roaming charges outside the EU in a benchmark report covering 2Q07 and 3Q07, and the next one is set to cover 4Q07 and 1Q08 and to be published in mid-July.
The ERG also plans to advise the EC at its consultation on the functioning and possible extension of the roaming regulation in early July that the rise in rates is possibly due to the Eurotariff.
The research firm has also found that some operators are increasing their retail prices even as they negotiate lower wholesale ones for themselves, and in some cases it seems that in an effort to raise profit margins, larger operators are forcing smaller ones to hand over a bigger chunk of their revenue.
Source: Informa Telecoms & Media
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