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Thursday, June 19, 2008

Received party pays for mobile in Europe?

Some interesting comments being reported by various media this morning, suggesting that the European Commission might be open to the idea of some mobile operators moving to a "receiver-pays" model - perhaps akin to the US.

This would get around some of the complexities emerging around interconnect & call termination fees, as we move towards FMC and various hybrid technologies like femtocells & dual-mode WiFi.

Put simply, in the past in Europe there has been a fairly reasonable justification for higher fees charged by mobile operators to terminate inbound calls - the extra costs of spectrum and radio network. This has been reflected in separate number ranges for mobile, and regulator-specified termination charges that can be 10x that charged by fixed operators.

But now, the gap in termination *costs* to the operators is narrowing. As fixed calls move to mobile, the underlying expense in running the network is shared between fewer minutes of use, while the opposite is true in mobile. Further, some supposedly "mobile-terminated" calls actually terminate (via a mobile number) on WiFi, femtocells, fixed-VoIP softphones, or voicemail boxes. There is no reason for the termination fees in these cases to be the same as that terminated on the expensive cellular macro network.

Unsurprisingly, the mobile operators are a bit unhappy about this, with various comments about how this might "distort the market" or "confuse consumers".

But by a strange twist of irony, I've been presented this morning by the most egregious "distortion" of the current caller-pays/mobile-termination fee model. I am participating in a 7-way conference call tomorrow, hosted by a mobile operator. There's only one participant from the operator involved, and some of the other participants will probably be outside the UK. Yet the dial-in number is a UK mobile number (obviously, one of the operator's own). Not a freephone number, not a fixed number that can be called at fractions of a penny per minute, not even a list of international mobile dial-in numbers. So 6 people will each be paying extortionate amounts against one mobile-terminated leg of the call. Cost-based? Yeah, right.

That sort of abuse of mobile numbering has got to be the best single argument for receiving-party-pays I've come across yet. Maybe the European Commission's got this one right. Or maybe I should get myself an 09xxx premium-rate number and insist that any future briefing calls from mobile operators have to use that.

Edit: apparently the mobile dial-in conference call service is being positioned as a value-add service, along the lines of the fixed-line "free to set up" conference services that use semi-premium number ranges like 0870 in the UK. That's sort of fair enough for occasional ad-hoc confcalls among friends or small businesses, but I would have thought that a large company (especially a telecom company!) would be able to have a cheaper & more efficient platform based either "in the cloud" or (shhh!) on a PBX. And even the 0870 conference guys have options for international dial-ins or even Skype access.


Al. said...

Especially for things like text messages which you literally can't stop people sending you except by turning them off entirely with your operator, the argument for receiving party pays is somewhat dubious at best. Indeed, amongst many other reasons, I've always felt that's this is one of the main things that stopped widespread uptake of SMS in the US.

If we move away from a "caller pays" model here in Europe I think I'm simply going to stop answering the phone. If I wanted to talk to you, I would have called you after all. I view (most) phone calls as interruptions, now people want me to pay to be interrupted? Don't think so...

Actually since my voicemail message already says that I never check my voice mail and you should just email me, maybe I've already started this move?

Dean Bubley said...


Yes, absolutely - as a "net importer" of calls, I also benefit from free inbound telephony & SMS.

Being Mr / Ms Popular means that you're ahead if you receive more calls than you make.

But maybe there's a way for operators to target the Billy No-Mates who hardly ever receive calls at all, but are always phoning out instead? (Perhaps by selling their details to people advertising dating services....)

Less flippantly, it could just be that having *both* models available could enable some new & interesting business models. 0800 freephone numbers are already a form of receiving-party-pays, for example.

The Common Man said...

In India, we started off with the paid incoming-call model and that was perhaps the biggest barrier to the growth of mobilie telephony in the early years. It was only when the incoming call charges were reduced (and eventually removed completely) that people got really hooked into the whole thing.

Anonymous said...

I was thinking about something similar the other day and wondered if we might ever end up with a model of cheaper calls for roaming users, but also an added standing charge while the network detects you are abroad? (an extra 10,20,50p a day - that sort of thing, but I doubt that would fly with consumers either.

With the receiver pays model I'd seriously start screening my calls much more than I do now.