Proposed roaming regulation would curb competition and consumer choice
23 April 2007
One-quarter of roaming traffic in Europe would be provided at a loss
23th April 2007 - Brussels: More than 25% of roaming traffic in Europe would become loss-making, limiting the hardest-hit operators' ability to compete, if the European Commission's proposed roaming regulation is modified to incorporate amendments proposed by the European Parliament's Industry, Research and Energy Committee (ITRE).
A GSMA analysis found that the introduction of the rigid and low price caps on roaming retail and wholesale charges supported by ITRE would lead to a situation where:
- 25% of roaming traffic in the EU25 would be provided at wholesale rates that would not cover the cost* of connecting the call
- Incoming calls on more than 20% of the EU25's roaming routes would be provided at retail prices that would not cover the charges that operators pay to third-parties
- Incoming calls to prepaid phones on 40% of the EU25's roaming routes would be provided at retail prices that would not cover the charges that operators pay to third-parties**
"The caps proposed by this influential committee of the European Parliament will not enable operators to cover the costs of connecting calls on many roaming routes, let alone make a contribution towards the cost of running retail outlets, call centres, buying licenses, building networks and other capital expenditure," said Rob Conway, CEO of the GSM Association. "In many cases, smaller operators will rack up the biggest losses, limiting their ability to compete and ultimately reducing choice for consumers."
The net impact of ITRE's proposals would be to reduce operators' annual retail revenues from roaming services to 2.4 billion euros, compared with 5 billion euros in 2005. That dramatic fall would curb operators' ability to innovate and invest in new services and infrastructure. Moreover, many base stations in tourist areas would become unviable. Almost 8% of the base stations in the ski resorts of Austria, for example, would no longer cover their operational costs. "After years of expanding mobile coverage, this regulation could lead to a contraction in coverage, running counter to the European Union's aim of ensuring all its citizens have ready access to communications," added Mr. Conway.
Notes to editors:
The GSMA's analysis of the impact of the ITRE proposals only covers the EU25 countries, rather than all 27 countries of the European Union, to enable a direct comparison with the GSMA's 2005 figures, which relate only to the EU25.
*These costs have been validated by regulators across Europe
**Includes the commission operators pay to retailers of prepaid cards
For more information please contact:
For the GSM Association:
Mark Smith or David Pringle
Email: press@gsm.org
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