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