Cases of telephone enterprises
ATTACHMENT 2.- PRICE WAR IN MOBILE CALLS FROM ABROAD
Vodafone , the largest mobile phones operator in the world announced that, starting in April 2007, it would cut average rates in a 40% to its european clients for making and receiving calls whenever they were abroad (roaming).
T-Mobile UK, the British affiliate of Deutsche Telekom, communicated later a lowering of 45% in its roaming rates for Europe and 54% for Canada and the United States. The previous week, Orange, mobile affiliate of France Telecom, had announced new prices. Its British rival O2, property of Telefonica, and the Dutch KPN stated that they were doing the final preparations of their own to lower prices, even though they didn't quantify them at that moment.
This storm of rate cuts arrived after the European Commission (EC) had shown its concern to what they considered as "excessive" prices. The Commission had pointed out for quite some time that the roaming service for a four minute call between the twenty five countries of the European Union (EU) varied between 0.20 cents to 13 euros. In February, 2005, the European executive fined T-Mobile and Vodafone for charging abusive rates to users in Germany.
Europe has the intention of imposing a new regulation to correct what they deem as an "excess" and believes it application – foreseen for the summer of 2007– will reduce rates in a 40% – 60% for consumers. Arun Sarin, delegated advisor for Vodafone, assured that "the market is the best way to satisfy consumer needs: not regulation'" and that, as a result, had made the decision of lowering their prices.
Majority Tendency
Marta Muñoz, analyst for Ovum consulting, stated she wasn't surprised by the decision made by operators, specially after EC pressure. “In the end, the majority of mobile companies will end up following the same path final,” she declared. Vodafone announced it was going to reduce its average roaming rates in Europe from 0,90 euros per minute to 0,55 euros, while T-Mobile UK revealed its intentions to apply a flat rate of 0,55 pennies per minute(80 cents of a euro).
A spokesperson for O2 stated that, “we are finalizing our plans for our own discount strategy," and that it will be announced in the following weeks. A spokesperson for the Dutch KPN also stated to Bloomberg that, with this price war, they will also be forced to match their prices to those in the market.
