Light Reading

Reding Guns for Data Roaming Cuts

Michelle Donegan
GSMA News Analysis
Michelle Donegan
2/11/2008
50%
50%

BARCELONA -- Mobile World Congress -- European commissioner Viviane Reding did her best today to spoil the party here at the mobile industry's biggest event of the year by issuing an ultimatum to operators to cut data roaming charges.

In a speech delivered earlier today, she said that Europeans are paying too much to use data services when they travel outside their home markets, which is known as data roaming. She warned that if operators did not lower these charges by July 1, she would be forced to intervene and slash prices just as she did with voice roaming fees last year. (See EU Adds Mobile Law, EC Welcomes Roaming Caps, Euro Carriers Cut Prices, Carriers Wrestle With Roaming Caps, Reding Rides Into CeBIT, and Reding Rattles Regulatory Saber.)

Reding wants data roaming charges cut at the wholesale and retail levels and she is giving mobile operators a chance, for now, to introduce their own price reductions.

"If the mobile industry responds to the need for attractive packages of data services offered to their customers, with a credible Eurotariff for data roaming in all EU Member States, I will applaud your action," she said. "However, if I see no such single market offers for data roaming evolve by 1 July of this year, I will have no other choice than to propose regulatory intervention again."

Operators have responded recently with a small flurry of price reduction announcements in hopes of staving off regulatory action and mandatory price cuts. (See Operators Cut Data Roaming, V'fone Cuts Data Roaming, and Vod Slashes 3G Prices.)

Five operators -- KPN Mobile , BASE , E-Plus Mobilfunk GmbH , Play, and 3 Group -- have agreed to a wholesale data tariff of €0.25 (US$0.36) per Mbyte of data downloaded. Vodafone Group plc (NYSE: VOD), meanwhile, said it would reduce data roaming charges by up to 45 percent for business travelers.

While data roaming may not account for a significant amount of revenue for mobile operators, regulated price cuts can still put a dent in their profitability, particularly when combined with last year's voice roaming price cuts and continued reductions to mobile termination rates in Europe.

During last year's half-year financial results conference call with analysts, Vodafone CEO Arun Sarin described the regulatory pressures in Europe as "double and triple whammies." The operator's European operating profit was down 2.3 percent in the first half or 2007, compared to the previous year, partly due to regulated price cuts. (See Carrier Scorecard: Vodafone and Vodafone Reports H1 Results.)

In Barcelona, Reding also said that mobile termination rates need to be reduced even further to stimulate what she called the mobile Internet. She noted that mobile termination rates are nine times higher than fixed termination rates and vary widely across Europe. She said that the industry will likely shift to a "bill and keep" charging model, eventually, where operators agree to interconnect without charging each other.

But the industry is a "very long way" from this model, she said. "If Europe's mobile industry were to be serious about mobile convergence, you would certainly have to bring down mobile termination charges more aggressively," she said.

Reding also told the mobile industry today that growth of the mobile Internet has been "disappointing" and that it was time for operators to tear down their walled gardens.

"It is time to put the traditional 'walled garden' approaches that have served the industry very well during the 2G era behind us and move towards an IP-based approach to service delivery," she said.

Mobile operators certainly can't say they haven't been warned. Reding is clearly ready to introduce another regulated price cut -- this time to data roaming charges.

— Michelle Donegan, European Editor, Unstrung

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Flash Poll
From The Founder
The Swedish vendor has undergone a significant transformation during the past few years, adjusting to the demands of next-generation communications companies.
LRTV Documentaries
The 3GPP's Road to 5G Standardization

4|17|15   |   4:43   |   (0) comments


Satoshi Nagata, chairman of the 3GPP's TSG-RAN group and a manager at NTT Docomo, explains the standardization process for 5G, as well as the biggest challenges and opportunities.
LRTV Documentaries
AlcaLu CTO Makes the Case for a New 5G Air Interface

4|16|15   |   3:54   |   (0) comments


Michael Peeters, CTO of wireless at Alcatel-Lucent, explains why 5G will require a new air interface to meet its diverse performance targets.
LRTV Documentaries
AlcaLu + Nokia: The New Uber-Vendor

4|15|15   |   2:42   |   (4) comments


Heavy Reading Senior Analyst Gabriel Brown discusses the technological and competitive opportunities and challenges if a merger between Alcatel-Lucent and Nokia comes to pass.
LRTV Huawei Video Resource Center
Huawei's Data Center Power Play

4|15|15   |   6:22   |   (0) comments


Huawei has developed industry-leading energy efficiency capabilities for its indoor and outdoor data center solutions, explains Dr. Fang Liangzhou, vice president of Huawei's Network Energy product Line.
LRTV Huawei Video Resource Center
Huawei’s Routers, Switches Get the Green Mark

4|15|15   |   2:02   |   (0) comments


TUV Rheinland's Frank Dudley explains how Huawei's routers and switches have been successfully tested by energy efficiency experts and have gained Green Mark Certification.
LRTV Documentaries
A Finn, a Frenchman & a Guy From New Jersey Walk Into a Merger...

4|15|15   |   3:17   |   (0) comments


Stop us if you've heard this one before... Light Reading CEO Founder & CEO Steve Saunders weighs in on the technical and cultural implications of a Nokia and Alcatel-Lucent merger.
LRTV Huawei Video Resource Center
Accounting for Better Solutions

4|10|15   |   02:31   |   (1) comment


Murad Yousuf, CTO at Saudi Arabia's Ministry of Finance (Dept. of Zakat & Income Tax), talks about the benefits of deploying router technology from Huawei.
LRTV Huawei Video Resource Center
What's in Store for Huawei & DataCore?

4|10|15   |   05:44   |   (0) comments


At the CeBIT trade show in Hannover, Germany, George Teixeira, CEO of software-defined storage (SDS) specialist DataCore Software, explains why he has just signed a partnership agreement with Huawei Technologies.
LRTV Huawei Video Resource Center
Du Puts Its Faith in Huawei's Routers

4|9|15   |   3:42   |   (0) comments


Adnan Masood, director of Enterprise MS Solutions Marketing at du, the United Arab Emirates (UAE) operator also known as Emirates Integrated Telecommunications Company, explains why his company chose to use Huawei's multifunctional AR routers as part of its managed enterprise services.
LRTV Huawei Video Resource Center
Huawei Gets Active in the Data Center

4|9|15   |   3:17   |   (0) comments


With enterprise users looking to maximize the use of their data center assets, Huawei’s Chief Architect & Technical Director of IT Data Center Solutions, Bruce Su, explains how the company's six-layer active-active data center solution is eradicating the need to deploy passive, redundant data center assets.
LRTV Huawei Video Resource Center
Blue Consult & Huawei for a Better Solution

4|8|15   |   4:01   |   (0) comments


Martin Rott, CEO, and Marc Metzler, head of sales virtualization, from Germany's Blue Consult discuss their collaboration with Huawei and TrendMicro to develop a secure, scalable IT platform that can meet the needs of the most demanding enterprise users.
LRTV Huawei Video Resource Center
Beach Petroleum on eLTE & Mining

4|8|15   |   3:09   |   (0) comments


Network systems integrator Jeremy Hamlyn explains how Huawei's secure packet-based trunking communications system, eLTE, can help remote communities and companies in the mining, oil and gas sectors, deploy efficient communications networks that are perfect for video and data as well as voice.
Upcoming Live Events
May 5, 2015, Hyatt McCormick Place, Chicago, IL
May 6, 2015, Georgia World Congress, Atlanta, GA
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
November 11-12, 2015, The Westin Peachtree Plaza, Atlanta, GA
All Upcoming Live Events
Infographics
Network Instruments, a JDSU division, shares results from its 2015 State of the Network, a global survey on security.
Hot Topics
Verizon Scores New OTT Content Deals
Mari Silbey, Independent Technology Editor, 4/16/2015
Can WiFi Calling Find Its Voice?
Iain Morris, News Editor, 4/13/2015
Senator Proposes New 'Title X' for Net Neutrality
Carol Wilson, Editor-at-large, 4/13/2015
Nokia, Alcatel-Lucent in Merger Talks
Iain Morris, News Editor, 4/14/2015
Nokia & Alcatel-Lucent: What's Going On?
Ray Le Maistre, Editor-in-chief, 4/15/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Data Center Interconnect, or DCI, is one of the hottest sectors in telecom currently. Since coming back to Light Reading last year, prodigal-son style, I've ...
LR CEO and Founder Steve Saunders sits down with the head of Qosmos to talk about the changing state of the art in deep packet inspection technology, including its role in SDN and NFV architectures.
Cats with Phones
Steve's Phone Click Here
Steve Saunders's personal phone.