Informa: EU operators hike non-EU roaming rates to offset Eurotariff declines

In order to compensate for the loss of roaming revenues within Europe since the introduction of the Eurotariff, mobile operators around the continent have raised the price of roaming calls into the European Union as much as 163 percent, according to Informa’s analysis which was based on the percentage change in aggregated roaming prices on a country-by-country basis between 2006 and 2008.

European regulators have no legislative powers to regulate the cost of roaming outside their own territories, but apparently they are well aware of the situation and are considering ways of remedying it.

UK regulator Ofcom is working with the European Regulator Group (ERG), which represents the regulators of both EU and non-EU European countries, in “monitoring the situation” regarding the cost of roaming outside the EU. The ERG plans to advise the European Commission at its consultation on the functioning and possible extension of the roaming regulation in early July.

For example, the average price of a call home to Italy made by a subscriber roaming in Russia was 3.67 EUR ($5.74) a minute in 2006, but has risen 25%, to 4.58 EUR, since the Eurotariff came into play. A German mobile user outside the EU has seen a massive 163.7% price increase since 2006 for a call home from Africa.

Author of the report Angela Stainthorpe argues that as roaming traffic growth hasn’t kept up with falling tariffs, operators are looking elsewhere to recoup their losses. “Although only 15% of EU roamers are travelling outside the EU, the high per minute rates they pay for the privilege have had a significant impact on roaming strategy. In some cases, countries that were once relatively unimportant to EU operators have now been elevated to prime position purely as a result of their contribution to roaming revenues,” she added.

To makes things worse, instead of pushing new services and launching new innovative ways of serving their customers, some operators are increasing their retail prices even as they negotiate lower wholesale ones for themselves. Furthermore, in some cases it seems that in an effort to raise profit margins, larger operators are forcing smaller ones to hand over a bigger chunk of their revenue.