EU pressure leads to price cuts for roaming mobile calls

T-Mobile and Vodafone are to greatly reduce overseas roaming charges, in response to proposals by EU regulators.

Vodafone’s statement said its cuts will amount to 40 percent across the board and “will be based on the average roaming prices from last summer and will be implemented by April 2007 at the latest”.

T-Mobile said its own cuts would be equivalent to 45 percent. Max Miller, T-Mobile UK’s head of roaming, said, “We have aligned pre-pay and post-pay into a single tariff available to all customers automatically from 1 June 2006, without the need to sign up or pay set-up charges to achieve the new lower rates. The 55p flat rate, available in 31 countries in Europe and North America, allows our customers to make a voice call whilst roaming, to anybody, anywhere in the world and at any time.”

The cuts come six weeks after EC commissioner Viviane Reding’s threat to force mobile operators to cut all international roaming charges in the EU. Industry analysts noted that such roaming charges account for about 10 percent of mobile operators’ revenues and they might raise charges elsewhere to make up for the shortfall.

Mark Blowers of analyst Butler Group said the price cuts are a pre-emptive strike by the mobile operators. “I think they’ve thought, ‘Well we need to move a bit so at least we can demonstrate to the EU when they come knocking that we know this is happening and we’re moving ourselves to do this’.” He added that operators took the initiative because they are worried the EU will set even lower rates: “Roaming [in Europe] is moving from being very expensive to quite expensive – I still think they’ve some way to go.”

Blowers said the EU should look at data tariffs next, adding that unless mobile operators address the needs of firms, businesses will use other technologies, such as wireless hot spot connectivity.

T-Mobile’s Miller said, “Voice calling accounts for 90 percent of our roaming usage and this has been the main focus of the current tariff refresh. However, we are monitoring the data roaming market closely.”