Operators Hike EU Call Tariffs

David Murphy

European operators have raised the price of roaming calls into the European Union as much as 163% since the introduction of the Eurotariff to compensate for the loss of roaming revenues within Europe. So says Informa Telecoms & Media, whose analysis is based on the percentage change in aggregated roaming prices on a country-by-country basis between 2006 and 2008.
The findings, extracted from a forthcoming Informa Telecoms & Media report, 'Global Mobile Roaming, Forecasts 2008-2013', were first reported this month in the Global Mobile research service.
Informa notes that European regulators have no legislative powers to regulate the cost of roaming outside their own territories, but say they are well aware of the situation and are considering ways of remedying it.
Informas research found that the average price of a call home to Italy made by a subscriber roaming in Russia was 3.67 (2.90) a minute (excluding VAT) in 2006, but has risen 25%, to 4.58, since the Eurotariff came into play. A German mobile user outside the EU has seen a massive 163.7% price increase since 2006 for a call home from Africa. The ECs Eurotariff, which came into effect June 30, capped roaming prices at 0.49 a minute for calls made within the EU by subscribers of European mobile operators.
Angela Stainthorpe, author of the report, says that since the EU roaming regulation came into force in June last year, operators have reported roaming revenue declines into the hundreds of millions of Euros.
As roaming traffic growth hasnt kept up with falling tariffs, operators are looking elsewhere to recoup their losses, says Stainthorpe. 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. UK 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 Q2 2007 and Q3 2007. The next report, due to be published mid-July, will cover Q4 2007 and Q1 2008. 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.
Informas research also found that some operators are increasing their retail prices, even as they negotiate lower wholesale ones for themselves, and in some cases, says Informa, it seems that in an effort to raise profit margins, larger operators are forcing smaller ones to hand over a bigger chunk of their revenue.
Theres more information about the report here.