Comment from Thomas Wehmeier, Principal Analyst at Informa Telecoms & Media on Vodafone’s clash with Neelie Kroes

Neelie calls Vittorio’s bluff as war of words between operators and regulators intensifies

Neelie Kroes today issued an expectedly personal and stern warning to Vittorio Colao, Vodafone and the wider European telecoms operator community in response to Colao’s high-profile complaints about “auto-pilot regulation” in Europe at Mobile World Congress. Vittorio Colao used his presentation during yesterday’s keynote session to deliver strong criticism of the European regulatory approach and followed up with a clear threat to withhold future investment without greater clarity and predictability from regulators.

Colao’s comments will have resonated amongst the friendly, operator-dominated audience at the Mobile World Congress, but non-members of the operator club find it hard to sympathise whilst data roaming prices remain at their current levels.

The highly-charged riposte from Kroes was designed call the bluff of Vodafone and its peers. Kroes promises to deliver much-demanded spectrum, but only if operators move faster to align roaming prices with the levels that prevail in domestic markets.

It’s clear that Kroes has grown tired and frustrated at waiting for the operators to act and feels compelled to go public with her hand to strong-arm a response from operators. The regulation of wholesale data prices imposed by Kroes have helped to lower prices somewhat, but the price of using data overseas remains excessively high and the consumer perception rightly remains that roaming data pricing is extortionate.

There is a distinct irony that whilst data prices have lowered at glacial speeds in the roaming market, the operators have allowed domestic data pricing to drop too quickly and too sharply. The stark contrast between the price of a megabyte at home and abroad only serves to intensify customer frustration and as long as that vast gulf remains, the operators will have to live with the regulatory shadow cast by Kroes and her European regulators.

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Denise Duffy
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