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Inside Telecommunications: April to June 2011 - EY - Global

Inside Telecommunications: April to June 2011

Regulation

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Jonathan Dharmapalan 
Global Telecommunications Leader
Adrian Baschnonga 
Global Telecommunications Senior Analyst
Steve Lo 
Global Telecommunications Center: Beijing
Holger Forst 
Global Telecommunications Center: Cologne
Prashant Singhai 
Global Telecommunications Center: Delhi
Serge Thiemele 
Global Telecommunications Center: Johannesburg
Wasim Khan 
Global Telecommunications Center: Riyadh
Mike Stoltz 
Global Telecommunications Center: San Antonio

Average price of 1Mb in one session by country of origin of traveler

Source: OECD “More effective competition and better regulation needed to cut high mobile data roaming costs, says OECD,” 8 June 2011.



The EC envisions a new set of plans to tackle high roaming charges.

Summary: From reductions in mobile roaming charges in Europe to network separation in New Zealand, regulation remains a key sector issue.

Mobile phone charges in Europe

Mobile phone charges continue to be the subject of regulatory scrutiny in Europe.

  • Making calls to other countries: New European Commission (EC) price caps mean that, from 1 July, consumers can expect to pay a maximum of 39 euro cents per minute to make calls from other EU states, down from 43 euro cents per minute.
  • Receiving calls from other countries: The cost of receiving voice calls has also been reduced by mandate, from 19 euro cents to 15 euro cents per minute.
  • Data roaming: The cost of wholesale mobile data roaming has reduced, down from 80 euro cents per megabyte to 50 euro cents per megabyte.
  • Sending text messages to other countries: This remains unchanged at 11 euro cents.

Roaming charges in the spotlight

The high cost of roaming has long been a point of contention for the EC. Roaming regulations were first enforced in 2007 before being amended in 2009, and the EC claims that 73% has been shaved off the cost of intra-EU calls since 2005.

Average price of 1Mb in one
session by country of origin
of traveler

Europe-based operators have challenged the EU’s roaming regulations on a number of grounds but lost a court appeal on 8 June, with the European Court of Justice ruling that retail price caps were legitimate in the event that wholesale reductions were not passed on to consumers.

While current legislation applies until the end of June 2012, the EC envisions a new set of plans to tackle high roaming charges, with a view to eradicating the price differential between national and international calling rates by 2015.

Structural separation arriving in New Zealand

New Zealand’s ultra-fast broadband (UFB) project is having a range of repercussions on the broadband market. Having won 70% of the country’s UFB contracts, Telecom New Zealand is preparing the structural separation of Chorus, the network arm it established three years ago.

The demerger is expected to be completed by 2011, following a range of amendments to the Telecommunications Act taking effect from 1 July.

The structural separation of the leading fixed-line player has long been anticipated and represents a key step toward a new market structure in New Zealand, one that is being catalyzed by UFB.



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