Friday, January 02, 2009

Persian Gulf - roaming charges

Gulf mobile phone companies move to cut roaming charges

A co-ordinated Middle East government intervention to make mobile phone roaming charges cheaper appears unlikely, industry watchers have said, now that the region’s large players are moving to cut prices voluntarily.

In April, a meeting of the Arab Regulators Network (AREGNET) concluded that not enough was being done by large regional mobile companies to offer reasonable prices to users travelling between countries. Officials of AREGNET, which comprises the telecommunications regulatory authorities of 15 Arab countries, agreed to propose an “Arab world” system for roaming charges to a ministerial meeting that would be held in July.

But while telecoms ministers expressed reluctance to pursue co-ordinated government intervention, mobile companies rushed to improve the packages offered to their customers, in the hope of avoiding mandatory new pricing structures. Since the AREGNET meeting, every major regional operator has announced an improved roaming package, including lower prices.

“The regulators are thinking about what is good for their countries, and now the companies are finding a way to do it,” said Abdulaziz Ibrahim Fakhroo, the chairman of GSM Arab World (GSMAW), a regional industry body. “There is a clear trend: we have to reduce roaming prices. That is a legitimate need for the consumers.”

One AREGNET demand was for operators to be more transparent in the way they communicate roaming charges to their customers. The result is a website,, where mobile customers belonging to any operator in 16 Arab countries can easily view the rates they will be charged when travelling to any of the other Arab states.

“Governments were hesitant to enforce the suggestions from the regulators,” said Matthew Reed, an industry analyst based in Dubai for Informa Telecoms and Media.

“What is interesting is that many of those things happened anyway and were led by the big players in the market – and now other operators feel they have to do something.”

While UAE consumers previously paid up to Dh12 (US$3.27) per minute to make local calls when travelling in neighbouring countries, they will now pay as low as Dh1.25 with du and Dh1.4 with Etisalat. In Egypt and Saudi Arabia, where Etisalat operates its own mobile networks, customers pay nothing to receive calls, where they once paid up to Dh5 per minute.

AREGNET said its proposed pricing framework for roaming in the region would have led to an overall 36 per cent reduction in fees within three years of its implementation, leading to estimated annual savings for consumers of $115 million.

The proposal was similar to an ambitious plan announced last year by the EU’s telecoms commissioner, Viviane Reading, who has an explicit mandate to create a single common market for telecoms in Europe. The proposal has already been partially accepted, with EU governments placing a cap on calling charges for customers roaming within the 27-country bloc. This week, EU ministers will consider similar caps on roaming charges for text messaging and mobile internet use; both caps are more than 50 per cent lower than the current EU average price.

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