Thursday, December 15, 2005

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Tarifica Finds that Fixed-to-Mobile Calls Cost Europeans a Big Portion of their Bill

London, Thursday 15^th December 2005 – Tarifica’s comparison of fixed-to-mobile versus mobile-to-mobile call charges across a number of European operators reveals that it can cost Europeans considerably more to call a mobile phone from their fixed line than if they use their mobile handset.

Mobile telephony penetration has been steadily increasing in Europe over the past few years, i.e. in the UK mobile penetration exceeded 90 per cent in Q1 2004 (with 54.290 million mobile subscribers), whilst in Italy the level of penetration currently stands above 100 per cent with prepaid subscribers accounting for the largest proportion of the customer base (subscribers with more than one SIM cards must also be taken into account). Further to this, market data shows that mobile call charges are on the decline: in the UK on-net and off-net mobile call charges have fallen by approximately 10 per cent and 33 per cent respectively in the last two years (source: Ofcom), which provides a strong incentive in favour of the mobile handset usage – French regulatory authority has also reported a 4 per cent increase in the proportion of people who use only mobile phones to make calls (source: ARCEP).

Tarifica has compared a sample of fixed-to-mobile and mobile-to-mobile call charges and hereby cites an extract of prices from the Tarifica Fixed and Mobile Benchmarks on five European countries (UK, France, Italy, Ireland, and Belgium). The comparison shows the fixed-to-mobile call charges of the incumbent operator terminating on a national mobile network and the mobile-to-mobile call charges of a national mobile operator terminating on the same network. The graph below clearly shows the significant price discrepancies that customers should expect to find:

Graph 1: Difference between fixed-to-mobile and mobile-to-mobile call charges based on a one minute conversation on BT / O2 (UK), France Telecom / Orange (France), Telecom Italia / H3G (Italy), eircom / Meteor (Ireland), and Belgacom / BASE (Belgium)

Source: Tarifica Fixed and Mobile Benchmarks

notes:

1) All tariffs above are expressed in € and exclude VAT.

2) Fixed-to-mobile and mobile-to-mobile call prices quoted are for a one-minute conversation (which includes the call set-up charge, or minimum call charge, where applicable) in peak hours.

3) Mobile-to-mobile call prices quoted are for on-net calls (off-net calls may incur higher charges) and for the following postpaid price plans: O2 100 / 200 (O2), Orange Classique (Orange), TuaX1ora (H3G), Meteor 60 (Meteor), and BASE post-paid 1 (BASE).

4) Fixed-to-mobile call prices quoted are based on the standard rates, thus excluding bundle offerings and discount schemes. In addition, different call charges apply depending on the mobile network, on which the call terminates.

A one-minute call towards an O2 mobile phone for a BT subscriber (UK) costs € 0.2218 (including a minimum call charge of € 0.0624) during peak hours (08.00-18.00, Monday till Friday), whilst the same call for an O2 100 or O2 200 subscriber is charged at € 0.1263, or 76 per cent less than BT’s price. Similarly, an eircom subscriber (Ireland) who calls a Meteor mobile phone (08.00-18.00, Monday till Friday) is charged € 0.2936 for a one-minute conversation. However, a Meteor 60 subscriber making an on-net call would be charged just € 0.1652, or 78 per cent less than eircom. Considerable differences between fixed-to-mobile and mobile-to-mobile call prices exist in other European countries, too, with Telecom Italia (Italy) and Belgacom (Belgium) subscribers paying approximately 50 per cent more for a peak call towards a national H3G and BASE mobile phone respectively, than if they used their mobile handset to call an on-net number.

Lower mobile-to-mobile call charges provide a strong motive for subscribers to make use of their mobile handset, at least for on-net calls, which could ultimately pose a threat to fixed operators. As they become conscious of the actual costs when making mobile calls from their fixed line, European subscribers could perhaps gradually turn to the more convenient mobile phone, in an attempt to minimise the cost of their phone bill.

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www.accessintel.com is a b-to-b media and information company headquartered in Rockville, MD, serving the telecommunications, chemical, defence, satellite, aviation, cable, media and public relations markets. The Telecommunications Advisory Group includes: TelecomWeb, the telecom industry destination for comprehensive global business intelligence, which recently launched a daily news service; market intelligence provider InfoTech; tariff consultancy Tarifica; subscription news services such as Inside Digital TV and Wireless Business Forecast; and the Web-based product database TelecomTactics.

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