Operators make a mockery of EC roaming action

European operators have raised the price of roaming calls into the European Union as much as 163% since the introduction of the Eurotariff last year.

For example, the average price of a call home to Italy made by a subscriber roaming in Russia was €3.67 (US$5.74 - all prices exclude VAT) a minute in 2006, but has risen 25%, to €4.58, since the Eurotariff came into play.

The most extreme case unearthed by Informa is that a German mobile user outside the EU has seen a 163.7% price increase since 2006 for a call home from Africa.

The EC's Eurotariff, which came into effect 30 June, capped roaming prices at €0.49 a minute for calls made within the EU by European mobile operators' subscribers.

Informa Telecoms & Media* also found that some operators are increasing their retail prices even as they negotiate lower wholesale ones for themselves. In some cases it seems that larger operators are forcing smaller ones to hand over a bigger chunk of their revenue.

The report's author, 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.

She explained, "As roaming traffic growth hasn't kept up with falling tariffs, operators are looking elsewhere to recoup their losses. Although only 15% 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 European Commission says it is concerned about the increase in charges, but that it has no legal instrument to legislate outside the 27 EU member states.

The UK's 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 findings, extracted from a forthcoming Informa Telecoms & Media strategic report, Global Mobile Roaming, Forecasts 2008-2013, were first reported this month in the Global Mobile research service.

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