REGULATORY ROUND UP – EU PLOTS FURTHER ROAMING RATE REDUCTIONMarch 1st, 2012
BY KEITH NUTHALL
THE EUROPEAN Union (EU) is to further reduce its maximum rates for mobile roaming tariffs from July 1, and also introduce cap EU mobile data service charges for the first time. Under a deal struck between the European Parliament and the EU Council of Ministers, these would cost no more than Euro EUR0.70 cents from that day, with the cap falling to EUR0.45 cents in 2013 and EUR0.20 cents in 2014. As for mobile voice calls, roaming charges would be capped at EUR0.29 cents from July 1, and EUR0.19 cents from 2014, down from EUR0.35 cents today. SMS messages would cost no more than EUR0.09 cents from July 1 and fall to EUR0.06 cents in 2014, down from EUR0.11 cents today. Also, as has been debated, telcos must from July 2014 allow customers to buy roaming services separately from July 2014, whilst retaining local operators for domestic calls. “The new proposals aim to…bring roaming tariffs into line with domestic prices by 2015,” said a parliament communiqué.
The EU authorities have been backed in their fight by the Organisation for Economic Cooperation & Development (OECD), which wants roaming termination rates to be set at zero, which would – said a report from the global think tank – “strengthen competition in voice and other services…speed up the introduction of innovative new VoIP services and encourage…tariff models…free from prices reflecting monopoly power on the networks of others.” It noted that roaming termination rates had decreased across OECD member states by 53% between 2006 and 2011, from USD0.1406 to USD0.065, but they vary widely between countries: they are zero in Canada and USD0.0007/minute in the USA, while in Estonia they are USD 0.142/minute and USD 0.165/minute in Chile.
Indeed, the Commission has acted to reduce Estonian domestic call rates too, freezing a proposal by the Estonian Competition Authority (ECA) to impose highest mobile termination rates in Estonia from mid-2012 until mid-2015. The Commission has said it fears the authority’s proposed pricing methodology will not fully follow EU telecoms rules and will harm consumers. For example, ECA proposes rates of EUR 0.0389 cents per minute in the first half of 2013, which the Commission said is “well above the cost-efficient rate of around 1 euro cent per minute”.
Also, the European Commission has been wrestling with Spanish telecoms regulator CMT over its plans to delay until January 2014 the introduction of cheaper mobile termination rates in Spain. Brussels took the unusual step of using its powers under the EU telecommunications directive to suspend these plans, because it would mean reductions would be introduced one year later than a deadline recommended by the Commission.
“CMT has proposed to extend the transitional period for implementation by an additional year in order to protect the interests of the mobile industry in Spain,” said a Brussels note. EU digital agenda Commissioner Neelie Kroes said: “Spanish consumers should not have to pay over the odds for mobile calls, especially when domestic finances are so tight. Industry has already had three years to adapt and a further delay of one year is unjustifiable.” CMT was ordered to work with the Commission and EU telecoms regulators body BEREC to devise a new timetable.
Meanwhile, BEREC has released a report on another touchy competition issue – accusing mobile and fixed line operators of stifling voice-over internet protocol (VoIP) operators’ services. “BEREC preliminary findings on traffic management practices in Europe show that blocking of VoIP traffic is common,” it said in a communiqué. It added telcos were most commonly guilty of “blocking and/or throttling of peer-to-peer (P2P) traffic [such as file-sharing service Dropbox], on both fixed and mobile networks”, and noted “the blocking of…VoIP traffic (mostly on mobile networks, usually based on specific contract terms).” Operators argue that these tactics are simply a matter of traffic management preventing web congestion. The European Commission said it is studying the report and its response is keenly awaited by VoIP operators, notably Skype.
And BEREC – usually known for its diplomacy – has waded into a dispute over Italian telecommunications liberalisation. It criticised an Italian legal reform that would ensure all Italian telcos had the right to choose their preferred repair and maintenance providers for services between telecoms networks and the final consumer. It present Telecom Italia decides who does this work, even where ‘last-mile’ services are provided by other operators. BEREC was unhappy because it considered the legislation strayed into decisions that should be taken by Italian telecoms regulator AGCOM, expressing its “deep concern” over these “moves to undermine [the] regulator’s independence…”
At the same time, another competition dispute could be brewing – over the standardisation of future mobile telecommunications services, with the European Commission reported to have requested information on the issue from major EU telcos, notably France Telecom, Deutsche Telekom, Telecom Italia, Telefonica and Vodafone.
Other EU telecommunications news:
*The European Parliament has approved an agreement with the EU Council of Ministers over the reallocation of radio spectrum to services such as wireless broadband using space freed up by the switch from analogue to digital television. Under the deal, TV’s current 800 MHz band would be used by wireless broadband services in all EU member states from January 2013, with at least 1200 MHz allocated to mobile data traffic by 2015. Swedish conservative MEP Gunnar Hökmark commented: “The first EU policy on radio spectrum will enable the EU to regain world leadership in wireless communication.” The agreement also tells the European Commission to assess by January 2015 whether additional spectrum bands need to be harmonised in all member states to cope with wireless data traffic growth.
*The European Commission has opened two antitrust investigations against Motorola Mobility Inc, assessing whether Motorola has abused its patents to prevent Apple’s and Microsoft’s flagship products iPhone, iPad, Windows and Xbox using its technology. The two tech titans considered certain Motorola technologies as essential to operate their systems.
*Brussels has also launched a competition inquiry into the proposed creation of an m-commerce joint venture in the UK between Vodafone, Telefónica and Everything Everywhere. The Commission’s fears the venture may have overly high market shares in this segment and may block the deal.