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Wednesday, May 23, 2007

EU data roaming costs.... operators, be warned....

I was at the Mobile Broadband Congress in London today. The keynote speaker was a policy-maker for the European Commission, who discussed a whole raft of issues like 900/1800MHz GSM refarming (good!), spectrum neutrality (controversial!).... and also mentioned (inevitably!) the new roaming caps.

Apart from voice roaming, he brought up the issue of data roaming charges, which have apparently been raised in a couple of letters to the Commission. At the moment, it's not intended to regulate them..... but....that's not necessarily going to be a perpetual state of affairs. He pointedly remarked that the new regulations task national regulators with "monitoring" both voice and data roaming, and that everything would be reassessed in 18 months' time. His comment to the effect that he didn't "believe that operators would make the same mistake twice" was tantamount to a pre-emptive shot across the bows, in my view.

He also raised the question of whether mobile broadband services could fit into the same regulatory framework as normal broadband - an open question, although it seems more likely to be defined as a separate market.


Unknown said...

It may already be too late. Unless there is literally no regulation of data roaming rates today, the regulators are likely to end up having to micro-manage future rates.

Scott Marcus has a good discussion, in the context of voice roaming, in his paper on Europe's "New regulatory framework."

"In 2000, Vodafone Airtouch merged with Mannesman. EU Commission competition authorities were concerned that the merged firm would be the only entity able to offer pan-European mobile telecommunication services... The merging parties resolved competition concerns by agreeing to provide roaming tariffs to affiliated and unaffiliated mobile operators on a nondiscriminatory basis. As a practical matter, this eliminated the merged entity's incentives to offer pan-European service packages..."

Scott compares this with the US where AT&T Wireless's introduction of Digital One Rate service lead to a wave of mergers, alliances and joint ventures as competitors were forced to respond. Today, most US mobile subscribers have large buckets of minutes for which there are no per-minute, no long distance and no roaming charges. As a result, today's US average minutes-per-subscriber is four times that of Europe. European attempts to foster competition had the opposite effect.
So the big question is, could a multi-national operator offer discriminatory data roaming (low cost on their networks only) under today's EU regulations? If so, then the regulators should lay low as competitive data roaming is likely to emerge within a few years. Otherwise, data will have to follow the path of voice roaming, i.e. managed by the regulator.

Anonymous said...

Hello Dean,

As a frequent traveler in Europe I'd really welcome a couple of serious data roaming offers showing up soon. Vodafone Germany has made a first step with their WebSessions for 15 Euros a day. And then there is 3 who have scrapped roaming charges altogether. But that's pretty much it so far. Some operators in countries like Germany, Austria, Spain and Italy offer mobile Internet access via prepaid SIMs which might also be a somewhat complicated but usable alternative for some. More details here: http://tinyurl.com/268nrw