Memorandum by OneCompare.com
1. Is it appropriate for the Commission to
introduce legislation to cap the cost of roaming?
OneCompare.com feels that it is necessary to
introduce legislation as the industry has been slow to self regulate
itself on the costs of international roaming charges. This is
evident as the major mobile operators only started to reduce their
tariffs following the significant level of interest generated
by the EU committee's movements to reduce roaming charges.
Without regulation in this industry, the networks
continued to charge customers extortionate prices and continue
to do so now. Many of the mobile operators have not actively promoted
their international roaming packages—customers must opt
in to activate before they travel. If they do not subscribe for
the package they will be charged standard rates and tariffs. This
means that many mobile customers are unaware that they will need
to sign up for the various opt-in schemes.
OneCompare.com believes that the mobile networks
do not have the intention of self regulating to a more reasonable
pricing structure for the consumer unless they extend discounts
they offer with "opt-in" packages to their entire customer
base as a standard procedure.
— Networks with opt-in packages:
O2, Vodafone, Orange (in the form of Orange bundles).
— Networks that have extended price
cuts to their entire user base:
T-Mobile, 3.
2. Do you think that the mobile telecoms
industry has done enough in the last two years to address, through
self-regulation, concerns expressed by the Commission? Are National
Regulatory Authorities in a co-regulated environment able to address
these concerns on their own?
Put simply, the networks have not done enough
to comply with the guidelines as outlined by the commission. The
availability of opt-in packages (regardless of promotion) do not
offer a significant reduction in rates to the consumers hit the
hardest by roaming charges particularly those who are not technology
savvy and take their phone abroad on holiday to keep in touch
with friends and loved ones.
— T-Mobile has reduced charges for
its entire user base, however this is to a level that is not in
line with EU recommendations (55p per minute to make and receive
a call).
— 3 have met the EU's guidelines impeccably,
however they do not have a strong enough worldwide infrastructure
to extend these same charges in the majority of EU territories
(such as France and Spain) in which the majority of roaming charges
are incurred.
3. Does the proposed Regulation risk narrowing
down the space for competition and thereby harming innovation
and investment in the sector?
The move could cause problems for providers
of cheaper international SIM cards that have previously traded
on the fact that roaming call charges could be cut by as much
as 66 per cent. Consumers are unlikely to invest in a cheaper
SIM card when charges are only marginally cheaper than the consumer's
current network and there is an initial outlay of £25-£35
with accompanying complications such as having an unlocked phone.
This isn't to say however that innovative companies
won't move further in this market as there is still huge scope
for a mobile voice over IP application for mobile phones with
the right infrastructure which could considerably undercut the
proposed retail prices of mobile phone calls.
4. Do you think that the pressure for lower
roaming charges could potentially spill-over into higher prices
for other mobile telephony services? Would you anticipate any
other unintended consequences that may affect consumers?
Yes. Price wars which have caused increases
in the amount of bundled minutes and text messages have been rife
over the past year, reducing network operator margins down to
the lowest they have ever been.
This increase in home bundle value is sure to
cease with regulation of roaming charges and value added services
such as internet and data services are unlikely to continue their
reduction in price down to the point where they become used widespread
by UK consumers.
5. Is the Commission's estimate that 147
million EU citizens are affected by excessively high international
mobile roaming charges accurate? Do you have any other figures
to offer?
Research from OneCompare.com has shown that
roaming charges affect a large section of the UK population—63
per cent of mobile user's have used their mobile when travelling
abroad. In many cases when "international roaming charges"
are added to their bill it can come as quite a shock as rates
can vary enormously.
— 49 per cent don't know how much it
costs to make and/or receive calls when abroad.
— 43 per cent don't realise that they
pay incoming call costs while abroad.
6. Do you think that the UK and French proposal
for a sunrise clause during the initial period after the Regulation
comes into force can better achieve the desired effect? Should
legislation apply solely to wholesale fees rather than retail
tariffs?
OneCompare.com believes that the sunrise clause
only provides a grace period of six months for networks to cut
prices—any networks failing to do so after this will have
caps imposed. This allows networks to prepare new cost cutting
measures to lessen the impact of a decreased retail price and
will certainly delay consumer price cuts.
7. Do you believe that separate sub caps
for making and receiving calls should be applied or a single average
cap? Should the linkage between Mobile Termination Rates and wholesale
prices, and percentage mark-ups for determining retail prices,
be retained or should target prices simply be included in the
regulation?
Yes this is a possibility. Consumers and particularly
holidaymakers rather than businessmen are particularly frustrated
and often caught out with having to pay to receive calls. Removal
of incoming call charges could placate consumers to the point
where they are happy to pay current excessive roaming rates for
making calls in Europe.
By providing consumers with this element of
control—they can remain contactable and can make a decision
to choose whether or not they want to incur these charges. This
empowers the mobile customer and allows them to make an informed
decision in the simplest way.
ABOUT ONECOMPARE.COM
OneCompare.com is now one of the leading independent
online mobile phone tariff and handset comparison service providers
in the UK. Their reputation rests solely on its 100 per cent impartiality;
due to a programme which is set up to sweep all available deals
in the market. Over two million people have visited the website
to get better deals in the past 12 months. The company also reviews
new deals and products and is a regular commentator in the national
press.
February 2007
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