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Mobile operators giveth and taketh away

Tourists to shoulder the cost of EU roaming cuts

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In much the same way as some firms try to pass on savings to customers, mobile phone networks look set to pass extra costs on to certain consumers.

A study by Informa Telecoms & Media, entitled Global Mobile Roaming: Business Models and Forecasts in the Evolving Environment, has found roaming price levels for non-Europeans travelling in the EU are likely to rise following the European Parliament's approval of new retail price controls on Thursday.

The Parliament's Industry Committee in Brussels voted by a majority of 45-to-3 to set compulsory price limits on roaming and the decision could result in roaming charges being reduced by up to 70 per cent.

Informa said several mobile operators had told the research firm they will increase the wholesale prices they charge non-European operators whose customers roam onto their networks to compensate for the loss of revenues resulting from the new European price caps.

"Some of the highest wholesale prices are levied by operators in developing markets for whom inbound roaming is a key source of income," said Mark Newman, co-author of the report. "In India, for example, wholesale roaming prices are up to 30-times more expensive than the retail price that Indian operators charge their own customers for making the same call."

Informa said with lower revenues expected from their EU roaming business, operators in Europe would raise the level of wholesale roaming charges they impose on non-European operators. These in turn would be passed on to non-EU customers of these firms while roaming in Europe.

Kate Fitzgerald, chair of the Irish branch of the US Democrats Abroad, told ENN that the move could have a negative impact on American tourists visiting Ireland. "It won't affect those [Americans] who are resident here as they tend to own Irish mobiles but it will certainly have an impact on their families when they visit, and on business people coming to Ireland, however the extent of this is unclear," said Fitzgerald.

Despite the extra roaming costs, Fitzgerald said there are other options available to tourists. "On the bright side there are so many alternatives to using mobile phones now, such as using Skype or email, that it will be possible to get around it," she said.

Copyright © 2007, ENN

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