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European mobile data roaming fails to take off: revenues little more than wishful thinking
June 10, 2002
If European mobile operators were hoping that GPRS roaming activity might add to their bottom lines anytime soon, they should think again.
Telia International Carrier (TIC), which currently provides GPRS roaming exchange (GRX) services to six mobile operators across its European network, is currently handling about one megabyte of data per month in terms of GPRS service traffic. "Signaling traffic is taking up more space on the network at the moment," Monica Avby, segment manager, mobile operators, at TIC told Unstrung.
If that Mbyte was charged at a rate comparable to Vodafone Group PLC's (NYSE: VOD) business user rates for GPRS-enabled data downloads (see Vodafone Launches (Expensive) GPRS Euro Roaming), TIC is transferring less than $10-worth of GPRS data between Europe's mobile operators. Nurse, call the revenue doctor, and quick!!
Vodafone is not currently one of TIC's GPRS roaming customers -- that honor (but only on a trial basis at present) goes to Cable & Wireless (NYSE: CWP), which is incredibly guarded about the current state of the GRX market. Emma Powell, sector development manager at the carrier's mobile carrier services team, told Unstrung that C&W currently has 20 direct commercial relationships with European mobile operators in 14 countries, as well as peering agreements through the Amsterdam Internet Exchange's GRX Peering Exchange (GPE), notably with Sonera Corp.. "We believe we are the market leader, or at least very close to being so," she claimed.
Powell named Sonera and Belgacom as C&W's major European GRX competitors, companies also mentioned by TIC's Avby.
However, Powell was unable to quote any traffic figures ("I have no visibility on that"), or even say whether C&W is transferring any more data than TIC, offering only that the level of traffic is determined by the number of handsets available and the services being used, and that the market is starting from a "small base."
Such pitiful exchanges will amount to little in the way of peering action at Amsterdam's GPE, the heart of European GPRS interconnectivity. However, a spokesman said the levels of traffic recorded among the GPE members were confidential. It is possible, based on Telia's experience, that there is little to hide.
The GSM Association, which has its finger on each and every GSM-based pulse, was also unable to shed any light on aggregate data flows, with a spokesman saying no traffic figures are currently available.
At least there are fewer GRX service providers to share what little pie currently exists. When Amsterdam's GPE was launched last summer, 17 members were announced. Of those, Carrier1 (dead Website) is no longer in business, whilst Ebone was swallowed up by fellow inaugural member KPNQwest NV (Nasdaq/Amsterdam: KQIP), which is currently on life support and perilously close to having its own network shut down (see KPNQwest Files for Bankruptcy), though it is currently not disconnected from the exchange. Other members unlikely to be winning much in the way of new business include Energis PLC and Global Crossing Holdings Ltd., which are encountering problems of their own.
The obvious remedy is the provision of affordable, useful services and decent market penetration of GPRS handsets. Powell at C&W believes handset numbers and application availability are key criteria for growth, but believes it is "too early to say whether current pricing is prohibitive. I don't think you can tell if pricing is a major issue" affecting the uptake of services, she added.
Avby at TIC, meanwhile, is geared up for a mobile data roaming explosion. "There is no limit to the capacity of, and storage potential on, our network. We will never [be overburdened] by the demands of our [GRX] customers."
True. Struggling to cope with the capacity demands of its GRX customers is not a problem that TIC is likely to encounter soon.
— Ray Le Maistre, European Editor, Unstrung
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