Gulf telecoms operators to slash roaming rates by 50%

Analysts say phone firms are unhappy with move to cut costs, to come into effect Feb 1

Mobile phone operators have opposed the planned cut in roaming charges

Mobile phone operators have opposed the planned cut in roaming charges

Gulf telecoms operators are due to slash mobile phone roaming charges to consumers by at least 50 percent from Feb 1, an official of the Gulf Cooperation Council said Monday.

Telecoms operators attending a meeting in Riyadh earlier this month committed themselves to lower retail prices, Abdullah al-Shibli, GCC assistant secretary general for economic affairs, said in a statement.

The statement did not give details of the new rates but said the decision would “reduce rates of international roaming between the GCC countries by more than 50 percent from current prices".

The names of the telecoms operators impacted by the ruling were not released.

Gulf telecom regulators have long campaigned for a reduction in roaming charges in a bid to bring costs in line with those seen in developed markets.

Analysts said authorities had previously tried to implement a MENA-wide rate reduction scheme, but this had failed in the face of diverging regional agendas.

“About three or four years ago there was an attempt to regulate roaming tariffs at an Arab world level,” said Matthew Reed, a telecoms analyst with consultancy Informa. “This was inspired by the EU, where there has been various interventions on roaming. But although the plan was endorsed, it was no enforced. There wasn’t the political will.”

The GCC cuts, led by Bahrain’s mobile phone regulator, were regarded as the next best option, he said. To date, two cuts have been agreed, despite opposition from phone operators who are facing declining profits in their domestic markets.

“The operators are actually not very happy about this,” said Reed. “They have been trying to lobby against it. Regulators try and persuade operators by saying that when cuts are introduced the usage will go up, but operators argue that the revenues are important to help them invest, and that usage doesn’t go up with lower rates.

“There is a bit of a battle going on between the regulators and the operators.”

*With agencies

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Posted by: Paul

Last summer for the first time I used my STC SIM-card while raoming in Hong-Kong, Malaysia and Indonesia. They have deals with many operators that make receiving calls free, and even local call not too expensive. As for data, for a small fee (SR 300-400) you can get unlimited data, which is not very cheap, but still much better then what European provides offer...

Posted by: Adel Darwish

It is worth mentioning that the rate reductions are only for international (voice) calls made while roaming and does not include data services at this stage. This is a first milestone accomplishment of the Roaming Working Group and we hope to see more coming.

It is important that people's perceptions are managed well in order to avoid being surprised at a later stage or having some sort of a "Bill Shock".

Posted by: Budaiya Calling

It?s a question of scale and vision in my opinion. The more consolidation we see by businesses in the GCC the greater the cost savings and potentially better value provided to the consumer. It is time that regulation lead the way to greater business innovation/restructuring in the region as it seems that business leaders are either unwilling or are too short sighted to see the greater needs going forward. To achieve and maintain growth one needs to learn from both the mistakes and successes of the industrialized nations.

Posted by: Geg

In true short sighted telco fashion and lack of abstract innovation, none will implement before the other. And then they have to get inter-agreement.
The fact is, almost all travelers switch off 'data' and get a local chip and use an abundance of local Wifis. So to have ridiculously higher rates, as now to compensate a thin home market is self destructive.
Now, traveling around Europe with say a UK phone, few bother to go for a local chip, because the cost of roaming calls are 'cheaper' than local calls in some of the GCC countries, so the home telco makes volume.

Posted by: Rocket

Light years is a distance unit of measure..

Someone had to say it

Posted by: Business Man

Agreed. Who would use Etisalat or Du roaming these days? Everyone I know gets local sim when travelling. They are light years behind here due to lack of competition. It is not doing anybody any good.

Posted by: mary karadsheh

I agree that it is the time for slashing roaming rates
and the usage may not be very sensitive/elastic to price especaily in roaming.

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