Recent research by Informa Telecoms & Media has suggested that cellular roaming charges for foreigners traveling in Europe are likely to rise due to the European Parliament’s approval of new retail price controls.

 

According to the report, Global Mobile Roaming: Business Models and Forecasts in the Evolving Environment, many European mobile operators are planning to increase the wholesale prices (IOTs) that they charge non-European operators whose customers roam onto their networks. Retail prices are generally set 20% above the wholesale rate. The higher prices will help carriers compensate for the lost revenues resulting from the new European price caps.

 

Previously, operators were allowed to set their own wholesale prices for roaming services, and few operators set much higher wholesale price levels than their competitors.

 

“Some of the highest wholesale prices are levied by operators in developing markets, for whom inbound roaming is a key source of income,” said Mark Newman, co-author of the report in a statement. “In India, for example, wholesale roaming prices are up to 30 times more expensive than the retail price that Indian operators charge their own customers for making the same call.”

 

Operators in Europe will begin to seek reciprocity in wholesale price arrangements, as they are now faced with lower revenues from their European roaming business. The European operators will also increase their own wholesale charges if operators outside Europe refuse to reduce their wholesale roaming charges. The increased charges will ultimately be passed on to non-European customers.

 

Newman points out the emergence of a two-tier market for roaming services and believes that Europe is going to start resembling a single market in terms of retail prices, due to the new price caps and the emergence of pan-European groups, such as Vodafone, Telefonica/O2, and Orange.

 

“Countries such as the U.S.A and India already have national roaming markets where people can make calls on other operators’ networks without incurring higher charges,” said Newman. “The same is also beginning to happen in Greater China.”

 

 

 

Source: http://www.informatm.com/itmgcontent/icoms/s/press-releases/20017417547.html;jsessionid=3D5C689B1BD414A758A0BC05DF4D4256