Europe: EU slashes data roaming costs in half

The European Union’s new caps on mobile phone roaming charges began July 1, cutting data rates for users traveling to other EU countries by more than 50%. The data roaming cap dropped from 61 cents to 27 cents per megabyte. The cap on making calls while roaming decreased 21% from 33 cents to 26 cents per minute. These charges are all before value-added tax that can tack on as much as 25%.
Still, the change is significant and the new caps are a step toward complete elimination of roaming charges within the EU region.
“This huge drop in data roaming prices will make a big difference to all of us this summer. But it is not enough,” said Natalie Kroes, the European Commission VP in charge of the Digital Agenda. “Why should we have roaming charges at all in a single market?”
Kroes hopes to see an end to all roaming charges by the end of the year. The caps on roaming are part of the EC’s Connected Continent regulation, which also includes consumer protections and a controversial net neutrality policy.
More telecom news from Europe:
–The EC today approved Telefónica Deutschland’s proposed $11.7 billion acquisition of KPN’s mobile operations E-Plus, subject to Telefónica moving forward with a “commitments package” it offered up to gain approval. The deal, once consummated, will result in a new No. 1 operator in Germany under the O2 brand and whittle the country’s mobile operators down to three.
The EC highlighted Telefónica’s proposed conditions as key to approving the deal. As part of those conditions, Telefónica last month signed a network sharing agreement with Drillisch, which operates as a mobile virtual network operator in Germany. Telefónica also committed to selling off some spectrum licenses; and extending wholesale agreements to MVNOs for access to the carrier’s LTE network.
“The remedies to which Telefónica commits ensure that the acquisition of E-Plus will not harm competition in the German telecoms markets,” explained Joaquín Almunia, commission VP in charge of competition policy. “Consumers will continue to enjoy the benefits of a competitive market.”
Analysts noted the deal’s approval shows a growing comfort level by the EC in consolidation across Europe’s mobile space.
“Having historically favored the disruptive nature of smaller players (such as Free Mobile in France), the EC appears to have grown more comfortable with intra-country consolidation within European mobile markets; 3’s acquisition of O2 in Ireland was approved, with very similar conditions, in May, before which it was allowed to purchase Orange’s Austrian unit,” explained James Robinson, telecom regulation analyst at Ovum.
—Orange will not join in French merger frenzy. In a brief statement July 2, France’s largest telecom operator said it had no interest in any tie-ups at this time. Sources told Reuters that Orange dropped out of talks to buy Bouygues, the nation’s No. 3 carrier, because the price was too high.
—VimpelCom names Telefónica’s Rene Schuster as new COO. The Amsterdam-based carrier announced that Schuster would take over as COO effective immediately. Schuster was previously CEO of Telefónica Deutschland.
—German government drops Verizon contract. In the wake of the NSA spying scandal, the German government has opted to cancel a contract with the U.S.-based Verizon Communications. Since 2010, the carrier had been providing infrastructure for a network used for communication between ministries in Berlin and Bonn. At a press conference on June 26, an interior ministry spokesman said the government wants more “technological sovereignty” and prefers to work with German companies.
Numericable to buy Virgin Mobile France. The French cable company is acquiring mobile virtual network operator Virgin Mobile in France for about $450 million. Numericable also bought the No. 2 mobile carrier SFR for approximately $23 billion.
—Vodafone exits Fiji. The London-based carrier sold its entire 49% stake in Vodafone Fiji to the Fiji National Provident Fund for $160 million.
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