ITWeb speaks with European Union (EU) commissioner for the information society and media Vivian Reding about the Eurotariff compulsory roaming cut, and what impact it has had in Europe since its June implementation.
ITWeb: How have mobile operators and subscribers reacted to the Eurotariff regulations?
Reding: By 30 August, around 200 million EU consumers had already switched to the Eurotariff. The Eurotariff is now the standard price offer for roaming in the EU and has been implemented smoothly. Some operators went further than the law and introduced Eurotariffs sooner than the deadline date. Some are also offering lower roaming tariffs than the maximum set.
ITWeb: Can mobile operators still make profits with these tariff cuts?
Reding: It was not our aim to abolish profits from roaming for mobile operators - this would be foolish in a market economy - but we have capped prices for wholesale and retail to ensure that while operators continue to make profits, customers can benefit from a visible decrease in prices.
Furthermore, the commission followed developments closely over the summer and found that a number of operators throughout Europe have been offering Eurotariffs below the maximum levels allowed (tariffs no higher than EUR0.49 per minute for calls made (m) abroad and no higher than EUR0.24 eurocents for calls received (r) abroad, excluding VAT).
The lowest Eurotariffs in Europe were found in The Netherlands [20 eurocents both for calls made and received], the UK [31.57 eurocents (m) and 12.63 eurocents (r)], Ireland [32.23 eurocents (m) and 15.70 eurocents (r)], Belgium [37.19 eurocents (m) 23.14 eurocents (r)] and Austria [37.5 eurocents (m) 20.83 eurocents (r)].
This clearly shows it is possible to be profitable even below the price caps the commission set in the regulation.
ITWeb: What brought about the Eurotariff?
Reding: Consumers and businesses faced excessive charges for making and receiving calls while abroad. Roaming services were four to five times the actual cost of the call. Obviously, there was no real justification for such high charges.
Roaming services were four to five times the actual cost of the call. Obviously, there was no real justification for such high charges.
Vivian Reding, European Union commissioner for the information society and media
Due to its cross-border nature, roaming was beyond the national regulators` jurisdiction. As a result, they were not able to tackle the problem and asked for the European Commission to intervene. We were patient and gave mobile operators plenty of opportunities to set their "own house" in order. Despite our repeated calls to lower charges, they did not act and, therefore, an intervention was necessary.
Lowering roaming charges is a win-win situation: the consumers benefit from cheaper prices and mobile operators also stand to gain, as customers can be encouraged to use their phones more when abroad. The overall number of calls should, therefore, increase to compensate for lower prices per call. This is backed up by our survey results that found that Europeans overwhelmingly said they would be more likely to use the phone while abroad if charges were lower.
ITWeb: Have European mobile operators adhered accordingly to the regulations?
Reding: Mobile operators have generally complied with the requirements to introduce, offer and make available a "Eurotariff" for all their roaming customers.
While in the first weeks after 30 June, more than three million subscribers actively sought the Eurotariff, many millions more benefited directly because their provider made the Eurotariff available to them as a default tariff during the summer.
In Germany, Luxembourg, The Netherlands and Portugal, some operators switched their customers to the Eurotariff on 1 July, while in Poland one operator already did this on 22 June.
We, therefore, estimate that over 400 million EU citizens are now protected by a Eurotariff today.
As for the regulation`s transparency rules, it has been found that operators are generally on track, with one or two exceptions. It means that most of the roaming customers receive detailed information about the prices whenever they cross the border within the EU.
ITWeb: How effective can a ruling like Eurotariff be in other regions like Africa, where cross-border roaming is high?
Reding: As mobile services are still a booming market, I understand fully why regulators and operators from many non-EU countries are following developments closely. In Africa, I have noticed that Rwanda, Uganda and Kenya have recently reduced roaming fees for travellers.
I assume other regions in Africa will follow their example and offer cheaper prices to their customers.
Related stories:
Operators drop roaming charges
Scrapped roaming fees boost SME`s
Share