U.K. mobile service provider Three has launched “Feel At Home,” a retail plan that assures domestic U.K. prices for voice calls, text messages and use of mobile broadband when customers travel abroad in seven countries and call back to the United Kingdom.
In other words, Feel at Home customers will only pay U.K. prices instead of incurring international roaming charges, when contacting peoplein the U.K., Three says.
Initially available in Republic of Ireland, Australia, Italy, Austria, Hong Kong, Sweden and Denmark, Feel At Home will automatically activate as soon as a customer arrives in one of the countries.
Three is the first U.K. operator to offer customers the same in-country mobile phone and mobile broadband rates for no additional charge as if you’re at home or abroad. Those sorts of moves are one reason why some would argue that EU-mandated lower roaming costs ultimately will be happen as a normal part of the competitive process.
Some within the EU might agree.
European Commissioner for Digital Agenda head Neelie Kroes apparently has decided to back off a plan to massively reduce wholesale interconnection rates between 70 percent and 90 percent within the 28-country European Union region.
Some would credit opposition from EU service providers. Others would say opposition from EC competition officials is the more likely reason for the change.
The revised proposal is scheduled to be released on September 10, 2013.
To become law, the proposal requires approval from the 28 EU members countries and European Parliament.
The abandonment of the severe rate reduction plan illustrates some policy tensions beyond the normal friction between industry interests and regulator desires.
As sometimes happens, different influencers within the government regulatory sphere appear to have had dramatically different views about what should be done.
At least in part, those differences reflect the inherent tension between policies that appear to be beneficial to consumers (mandated lower rates and enhanced competition) in the short term, but are harmful in the long term (less investment in next generation networks).
In an earlier draft of her proposals seen by Reuters, Kroes proposed a cap of €3 cents per minute for voice calls from July, 2014 to June 2022, a 70 percent reduction from the €10 cent cap which came into effect in July 2013.
She also wanted to slash the wholesale cap for data roaming to €1.5 cents per megabyte from the current limit of €15 cents.
European Commission officials, according to the Financial Times, already had been thinking about amending the wholesale roaming proposals put forward by Kroes.
As was the case in the U.S. market, regulators are grappling with ways to balance two contradictory goals: expanding competition and also encouraging investment.
There has been concern that the big reductions in wholesale rates, intended as a way of encouraging the creation of a single EC communications market, would further depress service provider revenues and so hinder investment in next-generation networks.
Service providers were concerned, among other things, about the opportunity for arbitrage opportunities. That typically happens in communications when there is a wide disparity between wholesale rates and retail rates in any market.
Some had estimated that as much as £7 billion a year could be earned by wholesalers taking advantage of the rate spread. Such arbitrage discourages investment in facilities on the part of incumbents and over the top or wholesale-based competitors as well.
Analysts at Bernstein Research had estimated the rate reduction proposals would allow non-facilities-based rivals to undercut major network operators by between zero and 65 per cent, depending on prices in each country.
The biggest potential impact, they say, would be in some of Europe’s biggest markets, Bernstein Research argued.
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