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Operators race to pre-empt Euro data roaming cap

3, KPN and Play cut wholesale data rates

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Five operators across Europe have banded together and agreed to cut wholesale data rates to €.25 per megabyte. The agreement should reduce customer prices over the next 12 months, though whether that will be enough to fend off the formidable Ms Reding remains to be seen.

Riding a tide of good publicity from last year's cap on roaming voice, European Telecom commissioner Viviane Reding has made it clear she's going to impose price cuts if the industry doesn't move fast enough.

"If they don't get it done, I will have to put regulation on the table," she said last week, pointing to summer 2008 as her deadline to see lower prices.

Forcing big companies to lower prices is great for the EU, which would love to see itself as the consumers' champion, so operators are going to have to work hard and fast if they're going to prevent vote-winning legislation being passed.

Cutting wholesale data rates is a first step towards lower prices. Two of KPN's subsidiaries are included (BASE and E-Plus), and Play is a Polish Operator that only launched last year (a brand owned by P4). But the move is significant, and if they can convince other operators to join then a flat-rate-across-Europe data tariff should be possible.

What we don't know is how much money operators are currently making from international roaming, aside from the many customers who accidentally ring up huge bills without realising it. Voice roaming was hugely profitable for operators, but with the data market still evolving it's hard to know how operators will react to a possible cap.

Ms Reding has also made clear that a cap on roaming SMS is also in the offing, so even if the operators can agree to reduce the cost of roaming data, they'll be hard pushed to prevent at least one bit of popularist legislation coming out of Brussels this year. ®

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