& cplSiteName &

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        ADD A COMMENT
From The Founder
Kicking off BCE 2017, Light Reading founder Steve Saunders lays blame for NFV's slow ramp-up and urges telecom to return to old-fashioned standards building and interoperability.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
Women in Comms Introduction Videos
Infinera's Sales Director Paints Tech's Big Picture

6|21|17   |   4:14   |   (1) comment


Shannon Williams, Infinera's director of sales, shares how she achieves work's many balancing acts -- between her role and the broader company, today and tomorrow's tech and more.
LRTV Custom TV
SD-WAN Innovation & Trends

6|20|17   |     |   (0) comments


Versa CEO Kelly Ahuja discusses with Carol Wilson the current status and trends in the SD-WAN market, Versa's innovation around building a software platform with broad contextualization, and the advantages that startups can bring to the SD-WAN market.
LRTV Interviews
Ovum's Dario Talmesio on 5G in Europe

6|20|17   |   02:16   |   (0) comments


At 5G World 2017, Dario Talmesio, principal analyst and practice leader on Ovum's fixed and mobile telecoms European team, explains the emerging trends amongst European operators as they prepare for 5G.
LRTV Custom TV
Putting Power on a Pedestal

6|19|17   |     |   (0) comments


ARRIS's John Ulm says a major accomplishment of SCTE•ISBE's Energy 2020 program is increased focus on power cost and consumption, including inclusion of energy requirements in operators' RFPs and RFIs.
LRTV Custom TV
Gigabit Access: The Last-Mile Pipe for All Future Services

6|19|17   |     |   (0) comments


A Gigabit access platform being deployed today must be able to deliver all types of services to an increasing number of devices. A non-blocking architecture is necessary to support the ever-increasing growth in bandwidth demand. The Huawei Gigabit access solution is based on a distributed design that is fully scalable to deliver a unprecedented performance.
LRTV Custom TV
Key Factors to Successfully Deploy an SD-WAN Service

6|19|17   |     |   (0) comments


As service providers transition their SD-WAN solution from trials and limited deployments into production at large scale, there are important considerations to successfully operationalize these solutions and realize their full potential, without adding complexity, introducing uncertainty or disrupting current business operations. Sunil Khandekar, CEO and Founder ...
LRTV Custom TV
IoT Solutions: Rational Exuberance

6|19|17   |     |   (0) comments


IoT solutions are morphing from hype into viable business opportunities. Huawei has the platform and ecosystem support to help carriers successfully address new business opportunities in the IoT space.
LRTV Custom TV
Realizing ICN as a Network Slice for Mobile Data Distribution

6|19|17   |     |   (1) comment


Network slicing in 5G allows the potential introduction of new network architectures such as Information-centric Networks (ICN) as a slice, managed over a shared pool of compute, storage and bandwidth resource. Services over an ICN slice can benefit from many architectural features such as Name Based Networking, Security, Multicasting, Multi-homing, Mobility, ...
LRTV Interviews
Ovum's Mike Roberts on 5G Uptake

6|19|17   |   04:08   |   (0) comments


Mike Roberts, research director for Ovum's service provider markets group, explains why he has boosted his 5G subscriptions forecast.
LRTV Interviews
AT&T's Hubbard on Intersection of SD-WAN & MPLS

6|15|17   |     |   (0) comments


Rick Hubbard, SVP of Network Product Management for AT&T Business Solutions, discusses how AT&T's approach to SD-WAN fits in with its overall virtualization strategy, explains how SD-WAN can improve enterprise customers' use of the cloud and addresses the intersection of SD-WAN and MPLS.
Telecom Innovators Video Showcase
Keep Connected IoT Devices Under Control With Allot

6|15|17   |     |   (0) comments


Allot AVP of International Pre-Sales, Daniel Keidar, explains how communications service providers can protect infrastructure and service availability from flooding attacks caused by malfunctioning or bot-infected devices connected to their network.
LRTV Custom TV
ZTE 5G World Highlights

6|15|17   |     |   (0) comments


ZTE showcases its leading 5G innovations at 5G World in London.
Upcoming Live Events
October 18, 2017, Colorado Convention Center - Denver, CO
November 1, 2017, The Montcalm Marble Arch
November 1, 2017, The Montcalm Marble Arch
November 30, 2017, The Westin Times Square
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Verizon Warns of $500M Hit From Yahoo Deal
Iain Morris, News Editor, 6/16/2017
Netflix's Lesson in Culture Expectation Settings
Sarah Thomas, Director, Women in Comms, 6/21/2017
Kalanick Steps Down as Uber CEO
Sarah Thomas, Director, Women in Comms, 6/21/2017
No Imagination: UK Chip Biz Goes Up for Sale
Iain Morris, News Editor, 6/22/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Following a recent board meeting, the New IP Agency (NIA) has a new strategy to help accelerate the adoption of NFV capabilities, explains the Agency's Founder and Secretary, Steve Saunders.
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.