Competition Renders Roaming Regulation Unnecessary
12 July 2006
12th July 2006 - London - The European Commission's revised proposals, unveiled today, to regulate the European roaming market are unnecessary as competition is already delivering substantial reductions in the prices of roaming services. The price cuts being implemented by individual mobile operators and an EU-wide agreement between a group of leading European operators to lower tariffs will lead to a fall in the average cost of a roaming call within the EU of about 40%.
Europe's mobile operators have also made it easier for consumers to find the best prices for roaming services, which enable people to use their mobile phones when travelling abroad, by launching a web site that will allow users to quickly compare roaming tariffs across the European Union. The GSM Association (GSMA), the global trade association for mobile operators, believes these initiatives will deliver significant benefits to consumers as early as this summer, demonstrating that there is no need for the European Commission to regulate this market.
While the Commission has amended several elements in its original proposals in response to concerns raised by the industry and regulators, the GSMA believes its new proposals would still do significant damage to the European roaming market and are not in the interests of consumers. The Commission's plan to introduce a rigid cap on retail prices on each and every minute of a roaming call will stifle competition. The price cap would prevent mobile operators from providing bundles of roaming minutes or other innovative tariff packages, which appeal to specific groups of customers and are an important feature of today's vibrant mobile marketplace.
The GSMA is also strongly opposed to the second element of the Commission's proposal to cap the retail charges customers pay to receive a call on their mobile phone when roaming abroad. Again, such a price cap would limit operators' ability to tailor roaming tariffs and services to the needs of specific customer groups.
"Although the European Commission has dropped its unworkable 'home pricing principle', its new proposals still amount to a straitjacket that will stifle innovation, dampen competition and ultimately harm consumers," said Rob Conway, CEO of the GSMA. "The Commission's plans would represent a far-reaching and unprecedented intervention in a market, which is clearly delivering for its customers."
The Commission's proposal to cap wholesale rates also has serious flaws. The level of the wholesale price cap envisaged by the Commission will penalise mobile operators with relatively high costs and could lead to some operators making a loss on the provision of this service. Some mobile operators incur higher costs than others for a variety of reasons, for example, because they serve a sparsely populated or mountainous region.
Many European mobile operators have already made public commitments to lower wholesale rates. Given the competitive nature of the European mobile market, the GSMA is confident that these wholesale cuts will flow through to significant retail price reductions for consumers. "The industry is delivering cuts in roaming prices today, well before any regulatory intervention would come into force," added Mr. Conway.
About the GSM Association
The GSM Association (GSMA) is the global trade association representing more than 690 GSM mobile phone operators across 213 countries of the world. In addition, more than 150 manufacturers and suppliers support the Association's initiatives as key partners The primary goals of the GSMA are to ensure mobile phones and wireless services work globally and are easily accessible, enhancing their value to individual customers and national economies, while creating new business opportunities for operators and their suppliers. The Association's members serve more than 2 billion customers - 78% of the world's mobile phone users.
For further information contact:
David Pringle
GSM Association
Tel: +44 795 755 6069
Email:press@gsm.org
Mark Smith
GSM Association
Email: press@gsm.org
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