IRR Regulation: International Roaming Rate Cuts to Become Reality
 

European Telecommunications Commissioner Viviane Reding, after much prolonged and detailed dialogue with EU operators, has announced that cuts to mobile phone roaming charges will become a reality this summer, and that operators have only one month to act on the regulation, which has been approved by the European Parliament.

This regulation, one of the major and most significant pieces of regulatory undertakings in recent times, and a concern area for both operators and regulators alike, will require EU operators to advertise price cuts to international roaming to all customers. Under the regulation, roaming charges will be regulated for three years to allow roaming prices to be significantly reduced and the market to become more competitive. Wholesale roaming charges set by an EU operator for a roaming customer will be capped at US$0.40 per minute, which will be lowered by US$0.03 per year over the prescribed period of the regulation. Similarly, retail charges will be capped at US$0.66 per minute for originating calls and US$0.32 per minute for terminating calls.

This proposal was approved by the Parliament later Wednesday, May 23, 2007. Essentially, the regulation will force cellular operators to slash prices on roaming, which typically constitutes a major portion (around 15%) of an operator’s overall revenues.

In the light of this latest development, SAMENA Telecommunications Council feels that if price cap is set too low, which apparently is the case with this regulation, then the mobile companies may be compelled to increase the cost of domestic calls. SAMENA also maintains that, although it is the responsibility of governing and regulatory bodies to make policies that best address the needs of their citizens, the concerned bodies are equally responsible for ensuring that the free-market spirit is allowed to thrive. The Council is in full support of the notion that regulatory authorities must exercise their role in promoting a harmonious, conflict-free environment, which fosters a healthy level of competition among telecom operators but which also is fair to the current players and watches over mutual interest of both consumers and service providers.
 

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