The EU has unveiled plans that aim to slash the cost of accessing data services while abroad from their current levels of £2.00 per megabyte of data to 80p by July 2012 and then just 45p by July 2014. However, this has led to fears that by 2013, mobile data will no longer be profitable and this sound the death knell for many mobile carriers.The current problem for consumers is that even if they have unlimited mobile broadband at home, the cost of accessing data services will rocket as soon as they travel abroad and have to access another mobile group’s network.
Many consumers will have noticed that when travelling to Spain, for instance, their mobile provider will change to either Telefonica or Movistar. When they then try to access these carriers to update their Facebook accounts or Twitter feeds, probably the most common uses for mobile data, they will be charged through the nose for doing so.What the EU rulings have proposed is that consumers should be given the option to sign up for specific ‘roaming’ contracts that are specially designed for use in other countries. These secondary services should run concurrently with their ‘home’ contract and use the same phone number and SIM card. The hope is that this will open the market to more mobile operators who will be able to offer more competitive ‘roaming’ packages, giving consumers more choice and, thus, bringing the cost of data services down.
All of which sounds great but, even under the new proposals, a three-minute song downloaded from iTunes would cost around £5, while a ten-minute, low-resolution YouTube video would cost around £20 to watch, which is probably more than most people pay for unlimited mobile broadband, unlimited voice calls and unlimited text messages whilst at home! And any situation whereby the cost of downloading a song is greater than the cost of the song itself clearly needs addressing.However, mobile data carriers are concerned that such measures will simply price them out of existence. Telecommunications vendor Tellabs, for example, has suggested that by early 2013 the cost of delivering one gigabyte of data will have surpassed the price that carriers are charging.
So the cost of mobile data is something of a double-edged sword for consumers. On the one hand, they will be getting cheaper data packages that will make it more cost effective to access all the mobile services they would normally access at home. On the other hand, if this demand for mobile data ends up bankrupting mobile carriers, then this will shrink the market even further and carriers will have no option but to put up the prices again or go to the wall.
And this is also a problem for the EU and their proposals as, while they are trying to open the market to more providers to increase competition and bring down the cost of roaming data services, they could have the opposite effect of putting carriers out of business and, therefore, narrowing the market even more. This, inevitably, would lead to higher prices being introduced once more.
Furthermore, does the end justify the means if the cost of roaming data services is only going to come down to, a still massively inflated, £5 per gigabyte?
What is certain is that something will have to be done over the next 12 months or we could face a worldwide collapse in roaming data services.