Operators could drop EU roaming premiums, says analyst

Big European operators such as Vodafone could stop charging a premium for roaming services within the continent without suffering much financially, a Morgan Stanley analyst has said.

Speaking on Tuesday at the Regulating Mobile Roaming Charges policy forum in Brussels, Nick Delfas said the exposure for such companies, were they to cut their roaming rates, was a lot lower than it was a few years ago.

Using Vodafone as an example, Delfas said Morgan Stanley estimated around six to seven percent of the operator's mobile revenues came from its customers roaming abroad. Partly using airline statistics as a guide, Delfas said around 70 percent of that roaming traffic was likely to be within Europe.

However, because roaming rates are lower within Europe than outside the continent — thanks to EU legislation — only about 30 percent of Vodafone's roaming revenue comes from intra-European travel, Delfas said.

"If all [roaming revenue] was lost, there would be a loss of revenues of about 1.5 percent of revenues for Vodafone. It's not a huge impact," Delfas said. He noted that, in 2006, before the first roaming price legislation came into force, a company such as Vodafone would have lost around four percent of revenue by dumping roaming charges.

In around two months' time, the European Commission will outline new legislation to further bring down data-roaming prices — and quite possibly voice- and text-roaming prices too — for those travelling within Europe. The new rules, if approved, will come into force in mid-2012.