European roaming charges set to drop

by alec on December 11, 2006

Last thursday, Howard and I had dinner in Toronto with Talkster CEO James Wanless.  Over dinner we discussed impending European market roaming regulations.  Roaming charges in Europe are viciously high, routinely exceeding 1 euro per minute, depending on the carrier. The European Parliament is set to enact regulations by summer of 2007 which would create a European home market, and cap roaming at a fixed percentage above wholesale costs.

If the EU regulation entered into force today and became fully effective, the results of this method for the consumer would be as follows:

  • the price of calling home from abroad in the EU or calling a third country while abroad in the EU would be at most 49 cents per minute.
  • the retail price of local calls made whilst on holiday or business in another EU country would be at most 33 cents per minute, and
  • the retail price for receiving a mobile phone call whilst travelling abroad in another EU country would be capped at 16.5 cents per minute.

All of this helps to explain the high interest in services like Jajah Mobile, Rebtel, and Truphone, which route calls around operator.  We don’t fully appreciate the cost of roaming, here in North Amerca, where most customers are on bucket plans.  My package, for instance, costs me roughly C$0.22 (about US$.20) to make calls from any location to any location in the US and Canada.  Mexico is still prohibitively expensive, but 99% of the calls I make are in the US and Canada.

Even with the new EU regulations, roaming charges would still be high. Services like our own iotum should be very popular in Europe, as they help to contain the cost of those roaming charges by more effectively screening incoming calls.

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