O2: Data-roaming prices to hit domestic levels by 2015

O2: Data-roaming prices to hit domestic levels by 2015

Summary: Telefonica, the parent company of O2 UK, believes data-roaming prices within Europe will fall as low as domestic mobile data prices by 2015.On Tuesday, Telefonica regulatory chief Robert Mourik said digital agenda commissioner Neelie Kroes's goal would be achieved without regulatory intervention in the EU data-roaming market.

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TOPICS: Telcos
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Telefonica, the parent company of O2 UK, believes data-roaming prices within Europe will fall as low as domestic mobile data prices by 2015.

On Tuesday, Telefonica regulatory chief Robert Mourik said digital agenda commissioner Neelie Kroes's goal would be achieved without regulatory intervention in the EU data-roaming market. He said this would happen "purely on the basis of demand".

The Commission will next month propose new legislation to bring down data-roaming prices within the EU. This will most likely happen in the form of price caps, or by decoupling domestic and roaming packages. Currently, standard out-of-bundle EU data-roaming rates for UK customers stand between £1-£3.07 per megabyte, while a typical domestic data tariff gives customers 500MB for £5.

Speaking to ZDNet UK at the Regulating Mobile Roaming Charges policy forum in Brussels, Mourik said the explosion in smartphone use was leading to falling retail prices. Ultimately, he said, operators want their customers to keep their phones on while abroad. Mourik stressed that he was speaking about the European mobile industry in general, rather than about Telefonica specifically, cutting retail data-roaming prices.

"We think we can make more money by lowering our data prices," Mourik said. "We [Telefonica] are doing tests in various countries, so it won't be the same in every country, but I am pretty certain that by 2015 data-roaming rates will be more or less the same as domestic rates.

"I am not going to give you numbers, but what I am saying is yes, we are going to lower our prices by a lot in our operating businesses. It depends a bit on the outcome of consumer tests."

Mourik's words contrast strongly with those of Orange roaming chief Yves Martin, who told ZDNet UK in March that such low levels for data-roaming costs could hurt big operators by letting small regional operators expand into other European markets.

In Mourik's presentation, the Telefonica regulatory chief also displayed a slide showing predictions for the fall of wholesale data-roaming rates — the amounts charged between operators to let customers roam across networks. While the average EU inter-operator tariff (IOT) in 2010 was €0.32 per megabyte, the average this year is, in Telefonica's view, likely to be €0.16.

Mourik's slide showed the average IOT in 2012 to be €0.08 per megabyte, which is still around eight times the actual cost of providing roaming data.

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Topic: Telcos

David Meyer

About David Meyer

David Meyer is a freelance technology journalist. He fell into journalism when he realised his musical career wouldn't pay the bills. David's main focus is on communications, as well as internet technologies, regulation and mobile devices.

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