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 Interviews
CenturyLink: Building the Case for NFV

12|19|14   |   02:14   |   (0) comments


At the 2020 Vision Executive Summit, James Feger, VP, Network Strategy & Development at CenturyLink, talks about how the US operator is approaching virtual network functions from an operational and business case perspective.
LRTV Interviews
Liberty Global Sees Business Goldmine

12|18|14   |     |   (0) comments


Steen Sorensen, VP of business services for Liberty Global, explains where the giant international MSO sees growth potential.
LRTV Documentaries
EE: The Road to 5G

12|16|14   |   16:02   |   (1) comment


Andy Sutton, the principal network architect at UK mobile operator EE, explains how his company is using Wembley stadium as a wireless test bed and how that's helping EE to plan the evolution to 5G.
LRTV Huawei Video Resource Center
Highlights of Huawei's NFV Open Cloud Forum 2014

12|16|14   |     |   (0) comments


Huawei hosted its inaugural NFV Open Cloud Forum during the SDN & OpenFlow World Congress 2014 in Düsseldorf, Germany. The Forum brought together technology thought leaders, senior executives and telecom professionals from global carriers, industry associations, as well as other partner companies in the ecosystem, to exchange views on and collectively explore how ...
LRTV Custom TV
Realizing Operators' Digital Vision

12|16|14   |   5:23   |   (0) comments


Leveraging technology is fundamental to digital transformation but understanding customers and serving them really well is at the heart of digital businesses. TM Forum lists the following as the strategic pillars of the digital business: business agility and rapid innovation, operational agility and effectiveness, IT and data centricity, plus customer centricity. ...
LRTV Documentaries
US Cellular Injects Analytics Into LTE

12|16|14   |   2:57   |   (1) comment


US Cellular's Mario Vela explains how the operator uses analytics for network planning and what comes next as the carrier looks to eke more value out of its metrics.
LRTV Interviews
How Cox Biz Plans to Keep Growing

12|15|14   |     |   (2) comments


Steve Rowley, SVP of Cox Business, details how the third-biggest US MSO intends to boost its revenues to $2 billion and beyond over the rest of the decade
LRTV Huawei Video Resource Center
Interview With Bill Zhang, Director of SoftCOM Product Management, Huawei

12|15|14   |   2:50   |   (0) comments


Bill Zhang elaborated on Huawei's open philosophy in NFV solution development and network architecture design at the SDN & OpenFlow World Congress 2014.
LRTV Huawei Video Resource Center
Event Highlights: Huawei at SDN & OpenFlow World Congress 2014

12|15|14   |   3:43   |   (0) comments


Huawei joined the 2014 SDN & OpenFlow Congress as one of the key sponsors and contributors. At the event, Huawei reinforced the openness and flexibility of its network infrastructure strategies, and provided updates on its SDN and NVF innovations. Through participations at the exhibitions, forums and speeches, Huawei encouraged the industry to "think bigger and ...
LRTV Interviews
How Cable Biz Services Hit $10B Mark

12|12|14   |     |   (1) comment


Cable operators reached $10 billion in annual business services revenues by delving deeper into their vertical markets and expanding beyond the smallest firms.
LRTV Documentaries
Mediacom Aims to Test Connected Tractors

12|11|14   |   05:07   |   (3) comments


Cable business service provider is taking its services to the 'agribusiness' sector in partnership with farm equipment specialist John Deere and is getting involved in Gigabit Cities developments.
LRTV Interviews
TWC Business Looks Beyond $3B

12|10|14   |     |   (0) comments


TWC Business Services chief Phil Meeks explains how his unit has reached $3 billion in annual revenues and what its plans are for next year.
Upcoming Live Events
February 10, 2015, The Westin Peachtree Plaza, Atlanta, GA
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 6, 2015, McCormick Convention Center, Chicago, IL
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Hot Topics
Vodafone to Ride T-Mobile Back Into US
Dan Jones, Mobile Editor, 12/12/2014
T-Mobile, BlackBerry Flirt With Reuniting
Sarah Reedy, Senior Editor, 12/17/2014
1-Gig: Coming to a Small Town Near You
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 12/17/2014
T-Mobile Lights Up 27 Wideband LTE Cities
Sarah Reedy, Senior Editor, 12/15/2014
US Carriers, You're Going to Cuba!
Mitch Wagner, West Coast Bureau Chief, Light Reading, 12/18/2014
Like Us on Facebook
Twitter Feed
Webinar Archive