Roaming charges must fall says EC - Europe

The European Commission (EC) has warned mobile operators to reduce their roaming charges and introduce greater tariff transparency for end-users this year.

One issue is the pricing of 'on-net' roaming, which refers to a user roaming from their home network onto an affiliate network abroad. The EC argues that 'on-net' should be cheaper than 'off-net' roaming -- moving from one operator network to another with no partnership in place. There is currently no distinction in charging rates between the two types of roaming.

AMS (American Management Systems), a business and IT consultancy, argues that high roaming charges are not entirely the fault of operators.

"Roaming charges are high because providing roaming functionality is expensive," argues Bart Dijkman, billing expert for AMS. "Non-standard platforms, constant regulatory changes and reliance on clearinghouses are all barriers to lower prices."

There is potential for conflict as the EC drives lower roaming charges for end-users and operators face a drop in revenues if such an obligation is imposed without implementation of more effective roaming mechanisms.

"The EC can't force mobile operators to push prices down but it will put pressure on them to do so," asserts Dijkman. However, he believes operators will be pro-active and look at cost-saving measures and offer more attractive prices to their subscribers.

AMS estimates that although only ten per cent of revenues are generated from roaming today, as the revenue stream becomes more lucrative -- with the prepaid market being able to roam too -- billing systems will be a significant area for mobile operators to concentrate on.

However, the introduction of GPRS roaming is unlikely to help the cause of cheaper roaming charges. "GPRS roaming will be expensive because at the beginning it will be a pure business product," says Dijkman. "Operators will focus on quality, reliability and security at first -- not cost."

Currently, roaming calls are 50 per cent higher than domestic calls, although Dijkman notes there is variance depending on the network.

The EC has not confirmed yet what it considers to be a more acceptable rate for roaming which suggests operators still have time to argue their case.

COPYRIGHT 2002 Horizon House Publications, Inc.
COPYRIGHT 2002 Gale Group