GSM Association Press Releases 2007
GSMA fears that competition in the European roaming market will be damaged by proposals in the European Parliament
10th April
2007 - London, England: The GSM Association (GSMA), on behalf of Europe's mobile operators, calls upon the European Parliament to consider the serious harm which proposals to regulate international roaming may inflict upon one of Europe's most innovative and dynamic industries serving millions of European citizens.
On Thursday, the Industry, Research and Energy Committee (ITRE) of the European Parliament will vote on the proposed regulation of international roaming. The GSMA fears that many of the tabled amendments would make a regulation, which would already harm European mobile users, even more damaging.
"The mobile industry and international roaming charges must not become a political football between Parliament and Council," said Rob Conway, CEO of the GSMA. "Europe's 450 million mobile users deserve better. At a time when Europe is trying to stimulate investment and innovation, these inappropriate and inconsistent proposals are becoming increasingly removed from the economic realities of the mobile market. I urge the Parliament and the Council not to risk introducing distortions into the roaming market that will remove incentives to compete and penalize some customers."
Proposals adopted by the Committee on the Internal Market and Consumer Protection (IMCO) already require operators to put some customers on regulated tariffs, which will severely distort competition. Now, there are compromise amendments proposed to the Industry Committee on setting retail price caps as low as 15 Euro cents for receiving calls - more than 75% below current levels - and as low as 40 Euro cents for making calls. Caps at such low levels would give mobile operators no scope to compete with each other and force them to apply tariffs that are below costs.
Parliament's own experts being ignored
The GSMA is particularly concerned that some of the proposals of the ITRE Committee, if adopted, would lead the Parliament to ignore the work, which itself commissioned from Copenhagen Economics, an independent expert consultancy. Their report showed that the Commission's original proposals for caps would not have allowed the mobile industry to recover its costs and would have damaged competition. The Parliament's own independent experts, therefore suggested that the level of the caps be increased significantly - in the case of caps for receiving calls, that they be more than doubled, to at least 33 Euro cents per minute (compared to the original Commission proposals of 17 Euro cents). Industry is alarmed that the Parliament has seemingly disregarded independent expert advice in favour of political pressure.
Competition already delivering for consumers
The GSMA has consistently argued that regulation of retail roaming prices is unnecessary. That is because competition is already delivering many of the benefits, which politicians wish to see:
- Roaming prices have already fallen by 25% across Europe since 2005 and are set to fall further this year.
- Europe's leading mobile operators have already agreed wholesale prices close to levels proposed by the Commission.
- The industry's commitment to transparency and price information is demonstrated by the pledge of the major European operators that at least 215 million customers will be able to obtain information about their roaming costs free of charge this summer, for instance through SMS notification.
Many aspects of current proposals would damage competition
Regulation should, at a minimum, not jeopardise or impede the benefits of competition. Yet the GSMA has found that many of the proposals that have emerged during the debate over regulation would do exactly that. In particular:
- Proposals to implement absolute price caps would impose a straightjacket on industry and inhibit tariff innovation: That is why the GSMA (and many national regulators, as well as Member States) has consistently argued that average caps are a better approach to regulation.
- Proposals to require all customers to automatically move to a regulated tariff, whether they wish to or not, would alienate customers and harm competition: that is why the GSMA has consistently argued for an approach that allows customers to choose whether to opt-in to the regulated tariffs.
- Proposals to set caps at artificially low levels, which do not allow proper recovery of costs or room for competition would force the industry to cross- subsidise roaming with other services and could replace competition with a single regulated tariff: that is why the GSMA has consistently argued that regulators should properly investigate and understand the industry's costs for providing roaming. Having done so, caps of at least 65 Euro cents for making calls and 35 Euro cents for receiving calls are necessary.
- Proposals to require complex and lengthy customer communications about tariffs for voice and data services will confuse and annoy customers rather than inform them: that is why the GSMA has consistently argued for a simple SMS/messaging notification requirement, supplemented by freephone access to more complex information, if the customer wants it.
About the GSM Association:
The GSM Association (GSMA) is the global trade association representing 700 GSM mobile phone operators across 218 countries of the world. In addition, more than 200 manufacturers and suppliers support the Association's initiatives as key partners.
The primary goals of the GSMA are to ensure mobile phones and wireless services work globally and are easily accessible, enhancing their value to individual customers and national economies, while creating new business opportunities for operators and their suppliers. The Association's members serve more than two billion customers - 82% of the world's mobile phone users.
For more information please contact:
For the GSM Association:
Mark Smith or David Pringle
Email:press@gsm.org
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