European Data Roaming – July2014!

The European Commission has unveiled plans to make calling, texting and data services cheaper for European travellers by opening the roaming market to increased competition. If the plan becomes law, from 1 July 2014 consumers would be able to sign a cheaper mobile roaming contract for use abroad, separate from their contract with their operator at home, while still keeping the same number.

Meanwhile, mobile operators, including Mobile Virtual Network Operators (MVNOs), would be given the right to use other operators’ networks in other EU member states at regulated wholesale prices. The structural measures are to be preceded by a progressive lowering of retail price caps on voice and SMS services and the introduction of a new retail price cap for roaming data services.

This opens up a whole new market for MVNOs, who until now have been unable to play aggressively on data roaming.

The emergence of many strong pan-European MVNOs has hurdles; historical difficulties inherent in obtaining multi-market wholesale deals with network operators, the large back-office asset duplication involved and other scaling issues that are unlikely to change in the near future.

For big operators, the biggest blow is not so much the opening up of the roaming market to more competition but, for the first time, the introduction of retail price caps on roaming data services. For a long time data services have been the only growing segment of the mobile market across Europe, helping to keep operators afloat as revenues from voice and messaging have shrunk

At the end of 2010, it cost an average of €1.06 per MB to download data in another member state, though some operators were charging as much as €12. The Commission plans to cap charges at 50 cents per MB by 1 July 2014. South African users pay around R108-R128 per MB.

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