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High prices and lack of transparency source of anxiety for data roaming customers

European Commission - IP/08/1048   27/06/2008

Other available languages: FR DE

IP/08/1048

Brussels, 27 June 2008

High prices and lack of transparency source of anxiety for data roaming customers

Use of mobile data services within individual Member States is growing much faster than cross border data roaming services, says a Connect2Roam study carried out for the European Commission. This is because mobile operators are introducing aggressive retail rates to compete with existing broadband offers. However, use of data roaming services remains limited as consumers are discouraged by extremely high charges when compared to national prices, as well as a lack of transparency related to the pricing by volume of data (Megabytes) used. High-volume users are susceptible to bill shocks if, for example, they surf the internet for long periods when using their datacard connection on a laptop computer.

"Mobile data services are the future, and we in Europe were the first to roll them out. When we see their growing popularity nationally, it is clear that high charges for internet services while roaming are artificially stifling demand. A big problem with data roaming is transparency: the average consumer knows the rates and durations of their phone calls, but it is not so easy for them to measure prices and volumes by the megabyte. They are afraid of getting a real bill shock of thousands of euros when getting back from their travels, and therefore unwilling to try out this new service,” said Viviane Reding, the EU's Telecoms Commissioner. "Operators should therefore better inform consumers and business people when they are abroad, both about their retail price plans for data roaming and the ratio of data volumes to price, preferably on a real-time basis. For one last time, I call on mobile operators to react to my request of February to voluntarily but clearly bring down mobile roaming charges for text messages and other data by 1 July.”

Today's study highlights major trends in the use of data roaming:

  • "Bill-shock" is one of the major problems for data services. Internet access through a laptop computer is easy but can generate very high volumes and thus immense bills. Technological progress has also enabled operators to offer high-speed services comparable to fixed broadband services. However, wholesale prices for such data roaming services have not yet been adjusted to reflect such progress and therefore remain very high when compared to costs.
  • Wholesale roaming prices (the price that one operator charges another for enabling its customer's data services while abroad) have decreased. For example, many operators have moved towards ‘step-pricing’ of wholesale roaming prices (offering different pricing bands according to quantity of megabytes downloaded) so that operators from other countries can offer lower retail rates for high-volume roaming customers. However, even these lower roaming retail prices remain well above national retail prices (which at times are even less than 1 cent per megabyte). Moreover, they do not they necessarily lead to more attractive roaming prices for web-browsing, video-streaming or music downloads for the consumer, because the wholesale price per megabyte remains higher than national data services.
  • Many operators are moving towards monthly or daily bundled offers for data roaming (meaning that customers can buy a fixed amount of service in advance at a discounted rate) offering cheaper rates of € 0.24 per megabyte on average. These rates are substantially than unbundled offers, where standard prices can typically range from €5 to €10 per megabyte. 1 megabyte allows approximately 200 e-mails without attachments or less than an hour of browsing time, but only 1 minute of MP3 compressed music.
  • Lack of transparency is a serious problem: consumers are often neither aware of prices for data roaming nor of their actual data use. In many cases they don't know what 1 megabyte represents and they may be unpleasantly surprised when receiving their bill. Consumers therefore remain extremely cautious which is one of the main reasons for the very low take-up of data roaming services observed in the EU so far.

Background:

The European Commission must review the implementation of the Roaming Regulation and report to the European Parliament and Council by the end of the year.

The study published today will form part of the input into this review. The Commission will also draw on the results of a public consultation on the Roaming Regulation closing on 2 July (see (IP/08/718) and the European Regulators Group's report for the last quarter of 2007 and the first quarter of 2008.

In February, Commissioner Reding had called on all mobile operators in Europe to bring down prices for SMS and data services by 1 July 2008.

The report on Roaming Data Services can be found on:

http://ec.europa.eu/information_society/activities/roaming/index_en.htm

Comments regarding the study can be sent to:

infso-roaming@ec.europa.eu.


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