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    Europe’s operators accused of operating pricing cartel


    Mobile operators have been accused of operating a cartel over roaming prices.

    “There is a reluctance to compete resulting in higher charges to users,” said Ewan Sutherland, executive director of the International Telecoms Users Group in Belgium.
    And he said the situation was going to get worse with 3G: “Some say 3G stands for ‘games, gambling and girls’, I say it stands for ‘gullibility, greed and grief’.”
    He was speaking at the Mobile Roaming and Interoperability conference held in London.
    Looking particularly at call termination charges, he said: “The roaming market looks very much like a cartel. The operators are ripping off each others’ customers. It is a wonderful scam. And there is evidence of price collusion.”
    One of the problems, he said, was the pressure on operators to produce monthly ARPU figures.  A cut in roaming prices would cause an immediate drop in ARPU but might not lead to an increase in usage for six months.
    The other problem is that reducing call termination charges benefits customers of operators other than the one cutting prices.
    “So everyone is waiting for the regulator to tell them to reduce prices,” Sutherland said.
    Meanwhile, he said multinational operators such as Vodafone and Orange could reduce prices internationally. Or they could offer “happy hours” during which holiday makers could phone home for cheap rates.
    “But they are scared of driving general revenues down,” he said.
    But Julian Keeley, head of regulation and carrier services at mmO2 in the UK, hit back saying there were already special rates for holidaymakers that could cut roaming process by between 30 and 70% for a month. He said these were introduced as part of a competitive response to Orange and T-Mobile.
    He also said that traffic direction would increase competition in roaming prices by removing the random factor concerning which network a handset logs on to. This, he said, would let operators do deals with operators in other countries.
    “The inter-operator tariffs did stay high for many years, and that was unacceptable,” he said. “This was because it was random which network your handset picked up on.”
    The delay in introducing this properly will be the time it takes to convince existing users to update their SIMs.
    “All new customers get SIMs with traffic direction built in,” he said.
    Ben Niestadt, director of global sales at Dannet in Denmark, said roaming prices had to be competitive to increase revenues.
    “You need to optimise roaming traffic,” he said. “If you reduce cost, you increase your market share. The right price plan will increase ARPU, keep you competitive, bring transparency to end users, prevent churn of high-usage roamers and reduce the number of customer call enquiries.”