Friday, August 08, 2008

Should government regulate mobile data? The EU thinks so

I regard mobile internet access as of strategic concern to Australia's development as a connected nation.

While fixed wire broadband is also crucial, mobile access is the best approach for filling the gaps cost-effectively in a large low-population nation such as Australia. Also mobile internet supports ubiquitous instant access to information, which fixed broadband does not.

This is why I felt it important enough to write a blog post regarding the cost of data in recently released Australian iPhone plans.

As such I have found Paul Budde's article, Regulators expose data roaming rip-off, very interesting.

In it Paul discusses how the European Commission has chastised
telecommunications companies for their mobile data charging practices. This is because the large prices being charged are actively inhibiting the growth of mobile internet use in Europe and having flow-on long-term economic impacts.

To quote (bolding is mine),
Data as charged per MB also remains excessive: in most countries (with the notable exceptions of the Czech Republic , Malta , Hungary , Latvia , Poland and Slovakia) charges fell between June 2007 and March 2008. Nevertheless, in four markets (Iceland , Luxembourg , Poland and Slovakia) the retail charge per MB is above E10. According to the GSM Association (GSMA) the average price for downloading a MB of data is now just over E5.

Lack of transparency remains a serious problem, in that most consumers are unaware of prices for data roaming or of the amount of data being used. This in turn has led to the ‘bill shock’ which is proving to be one of the principal brakes on customers using mobile data roaming.
The article concludes with details of the charging regime in Denmark which highlights the level of overcharging of consumers by telcos in the data space.

I can appreciate that telecommunications providers are using data charges to offset falling fixed line voice revenues. However at some point this becomes an economic brake and of national concern.

I only hope that this occurs sooner rather than later in Australia - I believe that we have already seen economic damage due to the broadband drought - although I am not aware of any report ever having been commissioned to assess the opportunity cost of high broadband costs in the late 1990s and early 2000s.

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