EU Proposals to Regulate Roaming are Heavy-Handed
28 March 2006
Pricing calls made at home and abroad the same would distort a competitive market
28th March 2006 - London - The European Commission's proposals to regulate retail roaming prices and wholesale roaming prices in the mobile phone sector are unprecedented, unnecessary and heavy-handed, according to the GSM Association, (the GSMA), the mobile industry's global trade association.
The European Commission contends that roaming prices are not falling, yet data from a sample of key operators with customers in 12 European countries indicates that roaming tariffs fell by an average of 8% across Europe last year. That rate of decline is likely to continue or accelerate going forward, following moves by several European operators to introduce innovative new packages that specifically give their customers better value on roaming services.
The Commission's suggestion that the price of calls made and received while travelling abroad within the European Union be capped at the same level as calls made and received within the user's home European country does not reflect the complexity of providing roaming services or the value that consumers attach to being able to use their mobile phones when travelling internationally.
"Enabling consumers to use their mobile phones on a pan-European basis is a value-added service and mobile operators should be able to charge a market-rate for this service," said Rob Conway, CEO of the GSMA and member of the board. "Moreover, it is inappropriate to regulate tariffs at a pan-European level as the commercial and regulatory factors in each national market are different."
More broadly, the GSMA believes regulating retail prices is a drastic step that distorts competition in the market and interferes with companies' ability to develop their own business models and differentiate themselves from the competition. "The mobile phone industry has a long track record of innovating on services and tariffs. The European Commission's proposed intervention will curb such innovation by limiting operators' scope to develop tailored packages aimed at particular customer groups," added Mr. Conway.
Price regulation of the kind proposed by the European Commission would be damaging to growth and innovation in the mobile industry and runs counter to the agenda set out by the European Union in Lisbon in 2000 to create "the most competitive and dynamic knowledge-driven economy by 2010".
The GSMA also believes that the European Commission's proposed consultation period of 18 working days is inadequate and falls well short of the Commission's own internal requirement of eight weeks. Ideally, the Commission should also give full details of its proposals before consulting with the industry. However, the GSMA welcomes the Commission's decision to carry out a full impact assessment, which should be carried out in full consultation with industry. That will allow everyone to gain a better understanding of how consumers and the mobile industry will be affected by any changes to regulation.
GSMA Response on International Roaming - (PDF 180kb)
For further information contact:
David Pringle
GSM Association
Tel: +44 795 755 6069
Email:press@gsm.org
Mark Smith
GSM Association
Tel: +44 7850 229724
Email:press@gsm.org
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