Wednesday, April 22, 2009

EU Caps Roaming Data Charges

STRASBOURG-In a welcome move from the European Parliament, it was announced yesterday that a law was adopted that will cut by up to 60 percent the price of using a mobile phone to send text messages or download data while outside a home state in the European Union.

Downloading data while roaming will cost a maximum of EUR1.0 per megabyte at the wholesale level compared with about EUR1.68 today. The BBC states that this cap will fall to EUR0.50 by July 2011. The same report adds that the current price cap of EUR0.46 per minute for an outgoing voice call will also fall to EUR0.43 in July, whilst the cap on voice calls received abroad will fall from EUR0.22 today to EUR0.19 in July and EUR0.11 by July 2011.

The caps on data roaming had already been approved by EU telecoms ministers
in November last year. The initial proposals to cap data roaming charges were made by EU telecoms commissioner Viviane Reding. The BBC notes that the idea is not to fix an EU-wide price, but to set a cap below which telecoms firms can compete by offering lower prices while still earning a "reasonable" return.

Data roaming charges have been often cited as a barrier to growth in mobile VAS, such as mobile social networks and location based services, due to the prohibitive cost of accessing these services when beyond national European frontiers.

The regulatory move announced, together with the ongoing trend of cheaper, flat rate mobile data tariffs, will give a further boost to young players in the mobile space to extend their reach beyond their front yard.