EU operators hike non-EU roaming rates to offset Eurotariff declines, according to research from Informa Telecoms & Media

30th May 2008. European operators have raised the price of roaming calls into the EuropeanUnion as much as 163% since the introduction of the Eurotariff to compensatefor the loss of roaming revenues within Europe.

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

Informa Telecoms & Media’s analysis was based on the percentage change inaggregated roaming prices on a country-by-country basis between 2006 and2008.

The findings, extracted from a forthcoming Informa Telecoms & Mediastrategic report, Global Mobile Roaming, Forecasts 2008-2013, were firstreported this month in the Global Mobile research service.

For example, the average price of a call home to Italy made by a subscriberroaming in Russia was €3.67* (US$5.74) a minute in 2006 but has risen 25%,to €4.58, since the Eurotariff came into play. A German mobile user outsidethe EU has seen a massive 163.7% price increase since 2006 for a call homefrom Africa. Click here to view:http://telecoms.msgfocus.com/c/12kmWwvjw3UEjngRlF

The EC’s Eurotariff, which came into effect June 30, capped roaming pricesat €0.49 a minute for calls made within the EU by subscribers of Europeanmobile operators.

Angela Stainthorpe, author of the report comments that, since the EU roamingregulation came into force in June last year, operators have reportedroaming revenue declines into the hundreds of millions of Euros.

“As roaming traffic growth hasn’t kept up with falling tariffs, operatorsare looking elsewhere to recoup their losses,” Stainthorpe says. “Althoughonly 15% of EU roamers are travelling outside the EU, the high per minuterates they pay for the privilege have had a significant impact on roamingstrategy. In some cases, countries that were once relatively unimportant toEU operators have now been elevated to prime position purely as a result oftheir contribution to roaming revenues.”

The European Commission says it is concerned about the increase in charges,but that it has no legal instrument to legislate outside the 27 EU memberstates.

UK regulator Ofcom is working with the European Regulator Group (ERG), whichrepresents 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 chargesoutside the EU in a benchmark report covering 2Q07 and 3Q07, and the nextone 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 functioningand possible extension of the roaming regulation in early July that the risein rates is possibly due to the Eurotariff.
Informa Telecoms & Media has found that some operators are increasing theirretail prices even as they negotiate lower wholesale ones for themselves,and in some cases it seems that in an effort to raise profit margins, largeroperators are forcing smaller ones to hand over a bigger chunk of theirrevenue.

*all prices exclude VAT