Roaming uproar
An Italian ordering pizza by mobile phone in his home country will pay around EUR 0.10 (zł.0.40) per minute. A Pole on holiday in sunny Italy trying to do the same with his mobile will be charged over EUR 1 (zł.4.02). The staggering difference stems from roaming fees charged by mobile operators.
In response, the European Commission (EC) proposed a new regulation forcing mobile operators to cut the wholesale prices that they charge each other for carrying calls from foreign networks. They would also only be able to add a 30-percent retail mark-up.
"On a normal market there exists a correlation between the costs of providing services and their prices for end users. In the case of roaming, such a correlation is disturbed," explains Marcin Lewenstein, an EC expert who worked on the new regulation. "Average retail prices for calls made while roaming are some five times higher than mobile operators' expenses and roughly four times higher than the equivalent prices for domestic mobile calls," he adds.
The EC decided to tackle the issue as roughly 147 million EU citizens use their mobiles abroad, of which some 110 million are businesspeople.
"I'm convinced that reducing roaming prices will not only be beneficial for citizens traveling within the EU, but will also enhance the competitiveness of Europe's industry," said Viviane Reding, the EU Commissioner responsible for Information Society and Media, when justifying the new regulation.
However, mobile operators do not share Reding's enthusiasm. According to the GSM Association (GSMA), a global-trade association for mobile operators, the new regulation is detrimental to the market. "The European Commission's new proposals amount to a straitjacket that will stifle innovation, dampen competition and ultimately harm consumers," said Rob Conway, CEO of the GSMA. "The Commission's plans would represent a far-reaching and unprecedented intervention in a market which is clearly delivering for its customers."
GSMA says roaming prices are steadily being lowered thanks to high competition on the mobile-services market and it should stay that way. But while the EC's regulation, expected to come into effect by summer 2007, is not to the taste of operators, it has already brought results. Six mobile-phone operators in Europe have agreed to halve the price of average wholesale roaming tariffs and promised to pass the benefits of these wholesale reductions on to customers.
"One thing is certain - roaming charges will be lowered. The question is whether it should be done at a pace demanded by the EC," commented Marcin Gruszka from Orange's press department.
