Thursday, June 15, 2006


The EC's latest proposal to regulate mobile roaming services by equalising retail prices across the EU will distort a very competitive market, the GSM Association (GSMA) said in a statement today. Here's an article.

According to the GSMA "the Commission plans to impose an arbitrary retail price cap across Europe, ignoring the fundamental geographic, demographic, regulatory and commercial differences between the 25 countries of the European Union."

The GSMA further argues that "the imposition of such a price cap" will reduce competition and innovation among European mobile operators, damaging the industry.

I totally agree with the market distortion points that the GSMA makes. But the fatal flaw in their argument is this notion of a "competitive market."

Yes, competition is fierce within national boundaries. But not across borders.

International roaming can only be described as a cartel.

The spirit of Viviane Reding's proposal is good - she's trying to break the cartel. And only after years of unsuccessful attempts at getting the industry to reduce roaming fees on its own. She really isn't an interventionist.

But, yes, her price cap plan is the wrong way to go about it.

Maybe the threat of intervention is all that is required - look at what Voda, Orange and TMobile did to their roaming rates after Viv's announcement.

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