Carriers, prepare to bleed: EU pops a cap on data roaming The EU has renewed its caps on mobile roaming, this time including a cap on data roaming and a promise to let travellers choose their roaming carrier by 2014, all coming in from 1 July. At the end of next month anyone travelling in Europe will pay no more than 56 pence (€0.70) a megabyte for data, 23 pence (€0.29) per minute …
Yeah, like the Carriers are gonna pick up the tab for this aren't they. They aren't going to take up the price of EVERYTHING else to make sure they still get the same profits. Oh no, not at all.
Thanks EU! Something that affected a minority will now cost everyone equally :)
They might bluster, whine and threaten, but just let them try jacking up UK call, data or line charges and see how far it gets them. Remember how popular 3G was until they stopped charging premium rates for walled gardens?
Mobile use is particularly price sensitive; if they put prices up, usage will just drop and leave the larger operators vulnerable to any operator that doesn't follow suit. Since Everything Everywhere are already set to roger us mercilessly for their LTE rollout, I doubt they'll have the stomach for an endless parade of "price rise" headlines.
You might like to look at the French "free" operator, and the effect it is having on traditional monopolies. Sure, the operator can jack up prices, but all it takes is somebody to stand up willing to take a lower profit, offer a better price, and customers will jump ship en masse. Just ask Orange France...
Exactly.
With the ultra-low offers from the likes of Free and Prixtel the major players have (after first crying foul and trying to generate FUD/bad publicity) all now massively lowered their prices and are even offering all-you-can-eat international call from your mobile to try and compete.
...I received five SMS messages from my phone operator telling me their roaming rates. Grr.
> Yeah, like the Carriers are gonna pick up the tab for this aren't they
What cost? They have already built their infrastructure, and charging thousands per gigabyte is just taking the piss. If it costs them orders of magnitude more to supply data to someone on another network, they are doing something wrong.
If you want to talk about costs, look at the history of the UK 3G spectrum auction... the UK gov brought in games theory professors to maximise the governments revenue from the auction to carriers... which seems a bit shitty when UK citizens would be footing the bill.
> They have already built their infrastructure,
And they are still paying for their infrastructure and for the 3G spectrum auction.
The damage done to the UK telecoms industry by that auction was phenomenal. Over 30,000 UK jobs were lost as a result. It still hasn't recovered over a decade later.
Thank you Mr Brown.
1) Yes they were. In an evolving technology, you need to be a player.
2) There are a few problems with this. The first is that you have to make a profit in order to offset costs against tax. The auction put the entire telecoms sector into recession - no profits to offset against. The second is that you only get to offset certain costs against tax. For example, a company car will depreciate and you can offset the amount it depreciates against tax. A building on the other hand will not depreciate so you can not offset the cost against tax. The same is true of the spectrum they bought. They can not offset the cost against tax. They can offset the interest payments on the loans, but not the actual cost. If they could have resold the spectrum (which they were not allowed to do) they could have offset the difference against tax. Finally, the auction was a revenue raising exercise so if the companies involved could have simply reclaimed the cost through tax offsets then no revenue would have been generated.
Just expand Charlie's words slightly to what I'm sure he meant: "nobody was forced to bid amounts that were obviously cluelessly over the top and a route to disaster".
Do the sums.
Assume a number of 3G punters.
Assume a payback time.
Assume an annual revenue per user.
There's the ABSOLUTE MAXIMUM you can afford to bid, because it doesn't include infrastructure costs, dividends, interest, tax, etc.
Several hundreds pounds per year ARPU was what they needed to pay back their bids.
It was OBVIOUS from day one that the networks had been on the silly water; I even sat next to a marketing type in Valbonne while 3GSM was on not far away, moaned that us techies might be good at arithmetic but we couldn't see the upside. Well, I think the evidence doesn't favour the marketing side of the story.
Prior to the auction BT was one of the leading telecoms companies in the world. It spent huge amounts of money in research and development and it was a major exporter of this technology to other countries. It was also spending large amounts of money in upgrading its ageing telecoms infrastructure.
After the auction it had to all but shut down its research and development, and it had to slow down its upgrade plan to a crawl. It is now a shadow of its former self.
What? And you're blaming that on the 3G licence auction price? Maybe in some parallel universe but not this one. "...upgrading its ageing telecoms infrastructure..." to what exactly? Lets have a look. Ah, that must be all that copper that is still being deployed everywhere - much to the Pikey's delight.
Its R&D spend in places like Martlesham Heath achieved some successes but squillions of turkeys. Their whole attitude to the changing world was set in the days of The Post Office Telecommunications still, PTT mentality and Spanish working practises drove BT to where they are today. I recall a presentation at Martlesham where BT stated that within a few years that it would "own" the Internet in its entirety. The deathly silence that greeted that statement said it all - they clearly had no idea at all.
Then they outsourced their IT to India and that pretty much ruined the plot entirely. Working with them today, having to deal with their bureaucracy layers and off-shore ineptitude tells all.
Its got sod all to do with the cost of 3G licences, BT have been their own ruination, and continue to be. If they had true competition for cable in the ground they'd have gone bust years ago.
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I recall reading an interview with someone from Orange pre the nothing nowhere merger who said it cost around €0.04 to deliver a MB of data to a phone and do all the billing etc, pay for the infrastructure yet at the same time Orange where charging £3 per Mb!
As a former Orange premier customer I was allowed to buy 200 MB data bundles for £90 bringing it down to 45p per MB so still a whooping profit for Orange.
Ironically after orange pissed me off and I left them and went to Vodafone, the euro traveller deal means I havent spent anywhere near as much in data (or anything else) in the last year.
Making data cheaper overseas means more people will use it and the carriers will probably make more money tapping into a market that currently kills data at the airport before it travels.
I'm currently roaming in the US with my UK T-mobile phone.
My phone has selected T-mobile US as the network.
Calls still cost me £1.20 a minute to make or receive. Yikes!
I know this is less of a concern for the EU but they could still regulate EU networks somehow.
The sick thing is that the bigger MNOs already have presence in most of Europe, yet as a customer you're still paying a hefty premium for daring to go outside one's borders. Had they simply put, say, a cent a minute on top for the trouble in the cases where roaming was easily doable, they would've gotten away with higher prices where it wasn't. Now, they got capped. Since the actual caps aren't that strict, they probably still figure a win while at the same time kicking and screaming all the way for public consumption, of course. Meaning that something is off with this competition in a free market idea. There somehow isn't enough market pressure to keep a lid on the margins. I don't suppose there's an economist around that could shed some light on this?
I'm no economist but I'm guessing it has to do with roaming being a relatively niche concern for the average mobile telephony punter, so it isn't really used as a comparison factor when comparing contracts.
Also they make it as difficult as humanly possible to compare different operators' tariffs. What do you think those "roaming bundles" are for? To make it cheaper for you? Haha - no, they're to bamboozle punters with multiple pricing tiers so they can't make an informed decision based on price.
Lastly there is the relatively large fact that contracts are commonly a whopping two years long now, which means operators can tie you down if you do make a mistake when first choosing a contract.
There may be competition in the mobile telephony market in certain areas, but in most areas the operators seem to act like a oligopoly.
No need to be an economist. What free market? Government controls and sells the spectrum. Government controls and regulates how you make the phones. Government controls and sets the prices. Government issues patents and copyrights that grant the legal monopolies on new ideas and their implementation.
If you haven't got the money to bribe, I mean lobby the government government you won't survive in the highly regulated environment.
Now some of those things in small doses are good. But when the government effectively uses them to just shake down most of its citizens and blame somebody else, it is a whole different story.
Gimp because that's pretty much what the phone companies are in this case, even if they have a lot of money in the bank.
How does this tally with T-Mobile denying roaming data in the EU, unless you pre-buy a bundle - minimum size 10MB I think? I suppose if the actual per Mb price doesn't exceed the regulated rate it's within the regulations.
I asked repeatedly for bill-me-as-I-roam per KB pricing but they said buy a bundle or get nowt. I only wanted a few KB for a quick SSH connection!
Got to agree. I like the idea that my phone can't run up the bill in the background unless I actively buy some more time.
I paid £5 for 20MB last time I went to France - that's 25p/MB. I had to buy another 20MB during the week and only used half of it, but even so, that still worked out cheaper per MB actually used than the proposed cap.
Anyway, the smallest T-Mobile bundle is £1 for 3MB in one day - sounds ideal for a quick bit fo work over an SSH connection, and only 33.3p/MB.
VNetworks are operating a scam when it comes to roaming charges. Voice and especially data should be a lot lower.
Networks should be obliged to nominate at least one national provider in every other EU country and provide rates which are within 20% of their home rates. For the rest roaming should be a nominal fixed charge.
Given that Vodafone, O2 / Telefonica, T-Mobile all have an international presence this really should not be hard.
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