Probes Aim to Cut Excessive Wholesale Roaming Charges in Europe
The European Commission (EC) Thurs. launched its 2nd probe into wholesale international roaming (WIR) charges in member states. The investigation of German mobile network operators (MNOs) T-Mobile and Vodafone will -- with an earlier inquiry into overcharging allegations against U.K. companies Vodafone and O2 -- have far-reaching effects on European operators, forcing prices down, the EC said. Complaints by consumers about excessive rates have reached the point that European telecom regulators have made finding common ground on WIR a priority for this year.
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The EC’s German investigation challenges the high interoperator tariffs T-Mobile and Vodafone are charging foreign MNOs whose subscribers use their mobile phones while in Germany. The inquiry covers 1997-2003 for T-Mobile and 2000-2003 for Vodafone. Roughly 2001-2003, the EC said, both carriers’ networks gave the companies dominant market positions. Profits from their roaming services were “several times higher” than comparable services supplied by MNOs, the Commission said. In particular, it said, the price of roamed calls exceeded by far prices the companies charged for calls made by German subscribers of independent service providers on their networks.
Politicians, particularly members of the European Parliament, have expressed a “strong wish” for the ERG to do something about roaming charges, Chmn. Jorgen Andersen said in Dec. (CD Dec 9 p9). The group made WIR a priority for its 2005 work program, and is discussing it at a plenary session that concludes today (Fri.). As part of its investigation, the ERG sent a questionnaire to MNOs across Europe in Dec., and will be updating the status of its WIR work at this week’s meeting.
The ERG’s proposal to focus on WIR prompted a less than enthusiastic response from GSM Europe (GSME). In comments submitted Jan. 17, GSME said regulators should recognize that the WIR market “has evolved significantly over the past year and is continuing to do so.” New technologies and traffic direction mechanisms, together with new roaming tariff strategies, have sparked significant competition, the group said.
Most European operators have negotiated discount agreements to lower roaming costs and passed the benefits on to consumers, or are working on it, GSME said. Moreover, new technologies such as VoIP are likely to cut roaming charges even more. In light of that, GSME said, “we strongly believe there is no need for the ERG’s Work Programme to address this market in 2005.” Regulating now could “cap or slow” the increasing competition, it said.
Two competing alliances of MNOs were formed in 2003 to give subscribers seamless mobile roaming services. Freemove Alliance’s members include T-Mobile International (Germany), Telefonica (Spain), Telecom Italia, Orange and their affiliates in other countries. Members of the Starmap Mobile Alliance include Amena (Spain), Eurotel (Tschechien), O2 (Germany, the U.K. and Ireland), One (Austria), Sonofon (Denmark), Pannon GSM (Hungary), Sunrise (Switzerland), Telenor Mobil (Norway) and Wind (Italy). Neither group responded to requests for comment.
While the EC and ERG struggle with what to do about WIR charges, some national telecom regulators are taking their own look. Last month, the U.K. (and Northern Ireland) Office of Communications (Ofcom) and the Republic of Ireland’s Commission for Communications Regulation (ComReg) unveiled their first joint report on cross-border roaming problems. The regulators looked at “inadvertent roaming” -- where mobile phone users are inadvertently connected to base stations in the Republic of Ireland while in Northern Ireland, and vice versa, resulting in higher charges.