The South African telecommunications industry may indirectly benefit from the European Union's (EU's) retail price reduction across the European telecommunications vista - even though the EU Roaming Regulations have no bearing on local operators.
This is the good news, according to World Wide Worx MD Arthur Goldstuck, following the latest EU Roaming Regulation move, which introduces significantly lower price caps for data downloads (36%) - making it cheaper for travellers to use maps, watch videos, check e-mails and update social networks while travelling across the EU. Data roaming is now 91% cheaper than it was in 2007 in the EU.
Goldstuck says although local consumers do not benefit, the move highlights the need for local operators with international presence to abolish roaming costs altogether.
As of today, downloading data or browsing the Internet in the EU's 28 countries will cost 45 euro cents (about R5.80) per MB - a reduction of 36% from last year - while making calls will cost 24c (about R3) per minute (17% less than 2012); receiving a call will cost 7c (about R0.90) per minute (down 12.5%), and sending an SMS will cost 8c (about R1, an 11% reduction).
The 28 EU countries include Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK.
Roaming rip-offs
European Commission (EC) vice-president Neelie Kroes says the EU needs to be relevant in people's lives, and the lowering of mobile prices today is a critical step towards "getting rid of these premiums once and for all".
The EC, which has passed several regulations relating to mobile roaming over the past few years, aims to make the long-standing difference between roaming and national tariffs in the EU done away with in the near future.
In 2011, Kroes said the EC had decided to propose a "fundamentally new approach" to tackling the high prices paid by consumers and businesses when using mobile networks in other EU countries.
"We are proposing a long-term structural solution to get to the root cause of roaming rip-offs, namely the lack of competition.
"These proposed structural measures would be the most effective and most sustainable way of reaching the Digital Agenda target of ensuring the difference between roaming and national tariffs should approach zero by 2015."
The EU points out it has achieved retail price reductions of over 80% across calls, SMS and data since 2007. The data roaming market, says the EU, has grown 630% since 2007.
Festering sore
Unfortunately, says Goldstuck, the new EU Roaming Regulations only really benefit South Africans if they buy a local SIM when travelling to EU countries - a process he tags as onerous. "[But] this still remains my recommendation if people want to avoid being ripped off when using their local SIM."
However, he says, what the move does do, is place the spotlight on exorbitant roaming costs - "still one of the festering sores of the telecoms sector" - and puts pressure on SA's networks to address the issue.
"This certainly places an onus on operators that operate across numerous countries - like Vodacom (Vodafone) and MTN - to get rid of roaming charges."
The additional cost of using data when travelling, says Goldstuck, is a matter of a roaming cost on the same network. "It is a billing issue - not a cost issue. Consumers pay massive premiums because the networks' billing systems are not integrated."
The EU's stance on international roaming costs reflects this: "The problem of high charges for international roaming is not a new one. Over a number of years, the telecommunications industry has failed to bring roaming prices to the level that reflects the underlying costs of providing this service."
The EC's first rules to address overcharging in roaming prices came in 2007, with the introduction of "Eurotariff", which capped maximum prices for phone calls made and received while abroad.
Nashua Mobile CEO Mark Taylor says South Africans have been getting "ripped-off by international operators" for years.
Nashua's recent partnership with Orange, which gave rise to a service that provides travellers with a SIM to use on, for now, France and Botswana's local networks, is a step towards alleviating the burden of roaming, says Taylor.
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