Roaming fees: an out-dated concept, claims EU

Roaming fees have long provided European operators with a comfortable and growing revenue stream. With the large majority of roaming charges being invoiced to business users, this small--but very lucrative--sector has escaped the sharp eyes of the EU looking to protect European consumers from the scheming manoeuvres of mobile operators.

But all this is about to change.

The EU Commission's VP, Neelie Kroes, has stated that the high costs associated with European roaming were an outdated concept caused by a lack of competition.

Kroes said that the EU was ready to implement cuts to European roaming fees charged by operators to the level of existing domestic tariffs. The Commissioner added that a genuine EU single market should be one where price differences between voice, text messages and data were based only on the actual cost of providing these services.

"I will assess the structural, economic and legal barriers to such a true single market and I am not afraid to propose the necessary measures to overcome these," Kroes said at a press conference held last week in Brussels.

Anyone believing this was normal EU bluster should be warned that in her previous job as EU competition commissioner, Kroes imposed fines worth billions of euros on companies that broke EU antitrust rules.

Perhaps recognising that Kroes is best placated--and not confronted--Deutsche Telekom's CEO, Rene Obermann, has accepted that roaming fees need to reduce. "The industry needs more customer-centric roaming rates, they need to come down."

This collapse in resistance was echoed by Telecom Italia's CEO, Franco Bernabe, claiming that roaming prices were expected to fall in future. "It is only reasonable to think in the medium term the mobile termination fees will come down to the fixed rates. Roaming charges have to be coherent. It is only a problem of graduation, a matter of time."

While these comments could be seen as little more than wanting to pacify Kroes in her new role as Digital Agenda Commissioner, operators are sure to do all they can to quietly obstruct and delay any new rules on roaming costs.

The growing value of roaming fees has been provided by a new study from Informa Telecoms & Media. The firm claims that the global roaming market is expected to grow 86 per cent over the next five years, delivering revenues of US$67 billion by 2015, or over 6 per cent of total mobile service revenues worldwide.

Of greater interest is that Western Europe will remain the largest roaming market delivering approximately 41 per cent of roaming revenues by 2015.

While the EU continues its fight to constrain European mobile operators from exploiting pricing structures, the bureaucratic-heavy organisation remains in a reactive mode as against looking to set the agenda for mobile services and charges. -Paul

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