Memorandum by EVUA Limited
INTRODUCTION
EVUA has a membership of over 70 multinational
companies with British and UK based foreign companies representing
almost 40 per cent of the total. Member companies have an annual
telecommunications spend exceeding 3 billion Euros per year, some
1.5 billion of which is expended on mobile communications charges.
The high cost of mobile roaming has been a serious concern to
enterprises for many years. EVUA, representing large enterprises,
has consistently raised this issue directly with mobile operators
and through public debate but with less success than it has desired.
Roaming costs for mobile voice and data are
so high and unpredictable that many of the EVUA member companies
are, as a matter of policy, restricting use of mobile phones for
staff travelling abroad. This means that their people's efficiency
is reduced. EVUA therefore believes that it is entirely appropriate
for the European Commission to introduce legislation and fully
supports the proposed regulation to bring down the prices of mobile
roaming.
THE MOBILE
INDUSTRY
The recent initiative from Viviane Reding, Commissioner
for Information Society and Media at the European Commission has
resulted in several operators reducing their retail roaming charges.
However, in some cases, the reductions are accompanied by the
need to pay a monthly fee which makes the actual cost variable
and the benefits difficult to assess.
Operators are not giving way easily and are
continuing to lobby in an effort to stop or delay the proposed
regulatory changes. Clearly they are concerned about the effect
the proposal may have on their revenues. EVUA believes that the
lower retail charges will lead to more competition. Increased
traffic volumes should also transpire, which will offset loss
of revenue to the operators.
THE EFFECT
ON BUSINESS
In today's world of international trading, businesses
rely on effective, value for money communications and, increasingly,
require this on a global basis. It is therefore no surprise that
in a recent survey conducted by Ovum for the EVUA, 71 per cent
of respondents said that the high cost of international roaming
is their biggest enterprise mobility concern; the majority also
said that mobile service providers' response to this concern is
"poor".
SENDING DATA
WHILST ROAMING
Although everything has its price, the costs
of mobile roaming are so high (see Fig 1) that enterprises can
no longer justify this as the price of doing business. This is
particularly so as the cost of transmitting and receiving data,
such as emails, whilst roaming is often regarded as prohibitive.
Many EVUA member companies are actively encouraging staff to consider
which means of communication to use when travelling internationally,
to avoid exorbitant charges. The measures taken include text messaging
as an alternative to email and avoiding the use of mobile for
data except as a last resort.
Fig 1: Breakdown of a typical monthly mobile
bill (UK site of an EVUA member company)
ALTERNATIVE TECHNOLOGIES
EVUA members are looking to alternative technologies
to help reduce spend and many are using or planning to use softphones,
calling cards, their own company networks and other means as alternatives
to mobile telephones (see Fig 2).
Fig 2: "What methods do you use or
are you considering using to reduce the cost of international
roaming?
Needless to say, mobile operators are not in
favour of these alternatives.
The GSM Association has continually supported
the current pricing regime for roaming and maintains that there
is a "very competitive market, characterised by high levels
of service innovation". However, there is no sign of competition
driving down roaming pricing as the GSM Association claims. Indeed
the complexity of pricing factors such as set up fee, per second
or per minute billing and so on, serves only to worsen and to
confuse the situation. So far, only the proposal from the Commission
has had any effect.
THE EC PROPOSAL
Enterprises mainly use major operators who have
a presence, either directly or through partnership, in many countries.
It seems that the savings made by providers from such economies
of scale are not being passed on to their customers. Indeed, they
continue to treat each of the countries as having entirely separate
networks and organisations.
EVUA does not believe that a mobile user should
be subjected to excessive call charges if using the same mobile
operator network (or partner network) in another country nor should
the charge be many times the cost of a fixed line call between
the same two locations (see Fig 3).
Enterprise users are fully aware of the real
cost of international fixed line calls, which are generally very
low and have been falling for a number of years. They expect similar
pricing for mobile calls but recognise that mobile would, for
a time, be more expensive than fixed.
As the main part of a mobile international call
is routed via fixed lines, operators have gained significant cost
reduction in fixed line tariffs over the past years. EVUA believes
these savings should be passed on to mobile customers, whether
business users or consumers, following normal commercial practice.
It should be noted that retail regulation would
not be needed if the market was working effectively. Competitive
forces should bring down the prices. This is what we should expect
from a well functioning market for international roaming.
EVUA strongly welcomes the proposals from the
Commissioner, which will be a great benefit to both the business
and consumer user community.
The linkage between mobile termination rates
and wholesale prices, and percentage mark-ups for determining
retail prices should be retained to ensure a consistent approach.
EVUA sees no need for a sunrise clause to be
included in the regulation as the operators have already had many
years to prepare.
EVUA regards the early introduction of retail
price capping as vital.
ABOUT EVUA
Formed in 1992, EVUA, a non-profit user organisation
for large multinational companies, has evolved into an effective
organisation which promotes global networking solutions for multinational
companies. Continually striving to make the communications market
more competitively priced for the business world, EVUA also gives
its members a voice in legislation and the opportunity to gain
inside knowledge on the latest developments in the telecommunications
world.
Membership includes companies from Europe, USA
and the Far East, the majority of them being Global 500 organisations.
EVUA is a global telecommunications focus group examining the
network service requirements of multinationals and driving the
marketplace to deliver these at competitive rates. To achieve
this EVUA addresses issues as diverse as enterprise network services,
managed services, outsourcing, mobility, IP and conferencing.
For more information about EVUA please visit
www.evua.org.
February 2007
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