'Lowering roaming prices will mean higher tariffs'

Mobile industry body the GSM Association has released the results of a study which it says shows that decreasing roaming charges could end up increasing mobile tariffs all round.

The study comes in response to potential changes mooted by the EC, which could see roaming costs drop by up to 60 per cent.

The GSMA objected to the proposed changes, saying roaming charges are "good value" as they are - and has commissioned an "independent" study from consultancy CRA which backs up its assertion.

The report says lowering charges for roaming will mean customers will eventually see other tariffs go up as operators try to make up for the shortfall in sales, while European service providers are also likely to create special 'no roaming allowed' tariffs to keep costs down.

It added: "To avoid higher prices for domestic mobile services, most customers are instead likely to opt to be on plans that do not allow roaming (or only allow a small number of roaming calls) - these customers would lose the option to roam that they currently have.

"In recent years, many operators have made roaming available to all customers... but this trend is likely to be reversed."

The abolition of extra charges to call a local user in a foreign country could apparently also lead to higher domestic call charges. CRA said: "To avoid the risk of large losses, operators would need to raise their prices for domestic mobile services to cover the costs of both domestic and international calls."

Regulation of wholesale roaming costs is likely to prove equally unsuccessful, according to the report, with some wholesale roaming providers dropping their services, a move likely to affect MVNOs most heavily. The report added that investment in poorer geographies will also be scaled back as a result.

The GSMA believes one of the major effects of changes in roaming regulation will be mobile users keeping two SIM cards to get the best prices when they're at home or abroad.