Vodafone cuts data roaming costs by 60%; analyst unimpressed

Europe's largest operator, Vodafone, has slashed the cost of mobile data charges for customers using their smartphones in Europe. The company said that the price cuts represented a 60 per cent reduction from current charges.

Commenting on the announcement, Vodafone's CEO, Vittorio Colao, said he wanted the company's 35 million subscribers to use data services in Europe in the same manner as they did at home.

"We expect smartphone sales in Europe to grow from 32 per cent today to more than 70 per cent by 2013, and we want to drive that growth with what we believe to be the best value, market-leading roaming data packages," said Colao.

Vodafone is offering two options: the first allows customers to pay €2 per day, for which they can take their domestic data plan abroad; alternatively, customers can select to take a price plan which includes data roaming within their monthly domestic package.

The company said this new plan would be rolled out in Vodafone's major European markets during November and December 2010, in time for the winter holiday season, and across the company's entire European footprint by summer, next year.

However, while Vodafone might hail this price cut as a breakthrough event, Jeremy Green from the market research firm Ovum said that it was little more than a small step towards reducing roaming charges for data users.

"In fact, there is a sense in which Vodafone is making a virtue of an impending necessity, since regulatory pressures are reducing, pushing data roaming charges downwards. A price reduction initiative from other large groups is highly probable," said Green.

According to the Ovum analyst, the new charges had been modelled on Vodafone's existing 'passport' arrangement for voice roaming, whereby users may opt in to a tariff plan to have roaming access at 'home' rates for a fixed fee (either per day or through a monthly contract).

"Vodafone will inevitably trumpet the generosity of its offer, and users will almost as inevitably complain that the new deal does not abolish roaming charges altogether," claimed Green.

The move by Vodafone to reduce data roaming fees--which other operators will be forced to copy in some fashion, comes after the EU had strongly criticised operators earlier this year for unreasonable fees when cell phones were used outside of their home market. The EU Commissioner responsible for digital affairs has stated that roaming costs for data should be limited to a maximum of €50.

For more:
- see this Epic Mobile article
- see this Ovum article
-see this Mobile Europe article

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