Saturday, August 23, 2008

Europe - roaming charges

Text message for 10 cents, 1 megabyte for 1 eur

There are very few reasons for mobile operators to like the EU commissioner, Viviane Reding. And it seems this energetic official is preparing to take away another reason.

After the successful campaign for cheaper phone calls, she is now finishing the preparations for another crusade. Her goal is to decrease the costs for roaming text messages, e-mails and internet for Europeans.

The reason for this planned regulation is, as was the case last year, straight forward. Roaming is overcharged, the high costs limit the free movement of people and the development of pan-European business.

Expressed in numbers this means: each of 2.5 billion text messages Europeans send by roaming each year were about 10-times more expensive than a locally sent message. It is a fact that the prices of roaming text messages and megabytes are premium prices.

Operators, unlike people like V. Reding, still consider roaming to be a premium service. According to the European Regulators Group (ERG) the price of one text message sent from abroad was on average 29 cents.

Clients of Slovak operators paid between 30 and 40 cents (prices include VAT). The price differences between countries are fairly big. For instance a Swedish person on holiday in Spain will pay 40 cents whereas his fellow holidaymaker from the UK would pay 50% more.

It is true that roaming prices are falling. According to the GSM Association the price of text messages went down by 18% y/y on average and 1 megabyte of data transferred costs 30% less.

However the prices decreased mainly in service packages that are designed for more active travellers. Anyway, as far as the ratio between roaming and local tariffs is concerned the situation with text messages is the same as for regulated voice services, stated the strategy manager of Slovak Orange, Ivan Marták.

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