Light Reading
European commissioner Viviane Reding threatens mobile operators with another regulated price cut if they don't reduce data roaming charges

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
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Huawei Video Resource Center
Interview With Rick Talbot, Principal Analyst, Current Analysis

10|31|14   |   2:12   |   (0) comments


At the NFV Open Cloud Forum 2014, Rick Talbot shared his positive feedback about the holistic and open approach that Huawei adopts for SDN and NFV. He also found the open sharing at the event valuable as it features different perspectives from Huawei experts, telecom operators, industry analysts as well as security experts.
LRTV Huawei Video Resource Center
Interview With David Snow, Principal Analyst, Current Analysis

10|31|14   |   2:24   |   (0) comments


David Snow talked about his understanding of Huawei and its SoftCOM strategy at the NFV Open Cloud Forum 2014, saying that Huawei's wide approach combining IT and CT expertise, introducing big data and analytics into solutions and contributing to the OpenStack community particularly resonate with him and make the company stand out in the industry.
LRTV Huawei Video Resource Center
Interview With Roz Roseboro, Senior Analyst, Heavy Reading

10|31|14   |   3:13   |   (0) comments


Roz Roseboro commented on Huawei's data center capabilities and NFV solutions at the NFV Open Cloud Forum 2014, saying that in addition to covering all three key domains of compute, storage and networking, the company also emphasizes the importance of management capabilities and professional services, which are essential in making NFV a reality.
LRTV Huawei Video Resource Center
Interview With Michael Howard, Co-founder & Principal Analyst, Infonetics Research

10|31|14   |   5:25   |   (0) comments


Michael Howard talked about SDN, NFV, and OpenStack adoption at Huawei's NFV Open Cloud Forum 2014. Particularly, he pointed out that Virtual Enterprise CPE is the top NFV use case that operators plan to invest in over 2014 and 2015 to deliver new enterprise services through virtualized functions.
LRTV Huawei Video Resource Center
Interview With Jerry Caron, Senior Vice President, Current Analysis

10|31|14   |   3:11   |   (0) comments


At Huawei's NFV Open Cloud Forum 2014, Jerry Caron from Current Analysis said that orchestration and management are key to realizing SDN and NFV for global carriers, and the approach that Huawei is taking, with its FusionSphere Cloud OS at the core, is in the right direction to address the challenges.
LRTV Documentaries
Broadband Battles

10|31|14   |   01:39   |   (0) comments


This year's Broadband World Forum featured a number of show floor battles focused on access gear, components and coffee.
Jonestown
Mobile Backhaul: Going to the Dark Side?

10|30|14   |   2:26   |   (1) comment


Heavy Reading's Patrick Donegan shares his view on a dark trend that bubbled up at Light Reading's annual backhaul conference in NYC.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With CEO of SwitchCom

10|30|14   |   4:13   |   (0) comments


SwitchCom, an IT company based in Angola, recommends a variety of Huawei solutions and hardware to their customers in the energy industry.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Ethiopia's Ministry of Water Irrigation & Energy

10|30|14   |   4:08   |   (0) comments


Gosaye Mengistie of Ethiopia's Ministry of Water Irrigation & Energy discusses the collaboration with Huawei in that country.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Dongfang Electronics Corporation

10|30|14   |   5:46   |   (0) comments


Dongfang Electronics Corporation, headquartered in Chengdu, China, is one of China's largest manufacturers of power generators and contractors of power station projects.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Zimbabwe's Customers

10|30|14   |   3:31   |   (0) comments


Representatives of Zimbabwe's Ministry of Power and Development discuss the energy needs of their country as well as new areas of improvement due to enhanced ICT capabilities.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Colbún Chile

10|30|14   |   4:29   |   (0) comments


In Chile, an aging energy infrastructure was in dire need of a modern update. Claudio Valenzuela of Colbún discusses how Huawei's ICT solutions continue to provide crucial information to improve the grid and how an in-country engineer is a cricial asset.
Upcoming Live Events
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
May 6, 2015, McCormick Convention Center, Chicago, IL
May 30, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Microsoft's Skype Embraces WebRTC on IE
Sarah Reedy, Senior Editor, 10/27/2014
FTC Slaps AT&T With Throttling Lawsuit
Sarah Reedy, Senior Editor, 10/28/2014
Wheeler Gets Down With OTT
Mari Silbey, Independent Technology Editor, 10/29/2014
China's MVNOs Hit the Wall
Robert Clark, 10/27/2014
Let's Not Kill SDN & NFV With Silos
Francois Locoh-Donou, Senior VP, Global Products Group, Ciena, 10/28/2014
Like Us on Facebook
Twitter Feed