Service Platforms > Teligen Tariff & Benchmarking

Mobile roaming - it's not just Europe under pressure

by Josie Sephton | May 10, 2011

There has been a lot in the press about roaming rates set by European mobile providers, but it seems that they aren't the only ones facing regulatory pressure around this highly debated issue. At the end of April, the relevant government ministers in New Zealand and Australia announced a joint decision to launch a full market investigation into trans-Tasman mobile roaming. The decision follows the release of a discussion paper last year, which used information provided by mobile operators to benchmark wholesale trans-Tasman roaming prices against estimated competitive wholesale prices (based on national roaming services, mobile virtual network operator prices and the most recent cost estimates from the Body of European Regulators for Electronic Communications (BEREC)). The paper concluded that for Australians and New Zealanders roaming across the Tasman, the transparency of prices was inadequate and the prices offered were relatively high.

Naturally, a number of parties were interested in the findings from the discussion document, and it drew a number of responses. Perhaps unsurprisingly, these fell broadly into two camps. The first, comprising individuals and user groups, were generally in agreement with the paper, in particular that roaming charges between the two countries were indeed too high, and that this adversely affected consumers. Mobile operators, on the other hand, disputed the high charges, arguing that the impact of market forces ensured that consumers benefitted from reduced prices both for mobile roaming services and across a bundle of mobile services (although one New Zealand mobile operator did acknowledge that prices charged by Australian operators to customers roaming in New Zealand did in fact, appear high).

Elements of the benchmarking came under fire from some of the operators, mainly around the bundles used and the decision around some of the benchmarking comparators, such as the rates against which Australian and New Zealand rates were compared, and the way in which prices were converted to a single currency.

This push back is not surprising. Any benchmarking approach will often draw criticism from one of more parties, especially when an outcome does not favour them. As a leading expert on telecommunications tariffs research and analysis, Teligen is heavily involved in the development and application of benchmarking methodologies on a regular basis, both within its standard services and as part of bespoke studies for clients. And issues such as these are all too familiar. This doesn't mean, however, that objections such as these should be dismissed. On the contrary, such criticism is important, in that it demonstrates that all interested parties are actively involved in shaping the methodologies and ensuring that they deliver as balanced a result as possible. Failure to achieve this will ultimately undermine the outcome credibility of any benchmarking exercise. The playing field will never be truly even, of course, because no two countries are identical. Each country's start point is different, and each will be faced with different political, economic and geographical constraints. What is important is how these differences are accounted for in any comparison, as the respective governments in Australia and New Zealand are no doubt dealing with at the moment.

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