By Colin Barker, 30 March 2006 08:25
NEWS
Tuesday's decision by the EU to bring out legislation forcing mobile companies to slash roaming charges has drawn fire from the industry which is vowing to fight the proposals tooth and nail.
The EU put forward its proposal, through the European Regulators Group (ERG), that a single Europe-wide cap on wholesale roaming charges should be applied and suggested this would "lead to reductions in average wholesale roaming charges of around 60 per cent".
The plan will go into a short consultation period (3 April to 28 April) before the legislation is published this summer with the aim of introducing the final regulations in summer 2007. Mobile companies in Europe are taking issue with the commissioner responsible for the move, Viviane Reding, on the size of the cuts, the scope of the legislation and the process of introducing the legislation which, they claim, is flawed.
As the largest mobile operator in Europe, Vodafone has the most to lose from the EU's move. Phil Kirby, the director of regulatory affairs at Vodafone, accused Reding and her department of being "less well informed than we think they should be".
The EU's website for monitoring the cost of roaming in European countries, quoted the wrong prices for Vodafone and others, according to Kirby. "It takes no account of the Vodafone Passport scheme [introduced in July 2006] which is entirely free to use and is available [to] all our customers. That cuts the price by 30 per cent for account customers and 45 per cent for those on pre-pay," he said.
Kirby further criticised the EU's methodology. "They don't have enough facts to draw the conclusions they are drawing," he said. "They had some consultation last Tuesday. We know the input they have had from most of the organisations who contributed and nobody who commented actually proposed what the commissioner had now proposed."
The consultation period was a sham, Kirby said. He believes the commissioner had already decided on the outcome before the event.
The idea that the commission is set on the path of cutting the costs for roaming abroad, before it has even started its consultation period, is a view shared by analyst group Ovum.
Senior analyst, Stefano Nicoletti, said: "We expect the industry to react strongly and challenge this decision, which could take away pretty much all their roaming revenues but it now seems that everything has been decided - it might be too late!"
Other mobile companies share Vodafone's worries about the prospect of legislation being enacted next year. O2 was singled out by Reding after she claimed the UK company had increased its prices by around 1 per call, since the last time the EU published a list.
An O2 spokesperson said: "The prices on the EU website don't take account of our International Traveller Service. This O2 savings scheme is now used by most people and it cuts roaming charges by between 30 and 70 per cent. Around 70 per cent of our roaming calls are made by customers using International Traveller Service."
Other operators were less keen to comment on the findings. In a statement, Orange said that it "remains focused on providing our customers with transparent pricing, convenience and quality whether they are at home or abroad". The company added it is "currently studying the EC's proposal for further regulation of the telecoms industry and will provide a detailed response in the coming days".
Colin Barker writes for ZDNet UK
Comments
There are 4 comments. Join the discussion
1. Simon
Or to paraphrase the operators comments :
"We've put up complicated tariffs with the sole purpose of obfuscating the real rates and the commission has fallen into the trap"
and
"we're upset at having to slash our unjustified rates"
2. John Smith
Time for mobile operators to grow up, get real and live in the competitive age!! We all know how fiendishly complicated roaming is, hey it must be a few additional signalling messages, database entries and the exchange of a few billing records between operators - not a lot more complicated than interconnection of fixed telecoms networks, and those costs have plummeted over 20 years. Every telephone user in the UK has for years subsidised the mobile operators 'free' handsets through overpriced termination rates, which are finally being pushed down, roaming is just the operators' current battleground. Stuff 'em, and while you're at it, refer the GSM Cartel (sorry "Association") to the Competition Commission!
3. Nick Cole
So the fat cats in the telecoms companies are crying about the need to keep ripping their customers off?
They have enjoyed effective monopolisation and a licence to print money from a system that generally runs with little human intervention apart from maintenance.
What a shame!
4. anonymous
"It takes no account of the Vodafone Passport scheme [introduced in July 2006] which is entirely free to use and is available [to] all our customers. That cuts the price by 30 per cent for account customers and 45 per cent for those on pre-pay,"
And pray tell, what percentage of users stumble across this opt-in scheme? What do the T&Cs say about Vodaphone's rights to withdraw it at a moments notice?
It is the basic tariffs that are the issue, not opaque opt-in schemes, offers or any other kind of transient promotion.