A premature regulatory response by the Government on mobile roaming charges could hamstring their options to deliver benefits to Australian customers, says Craig Skinner, Senior Consultant with Ovum. The KPMG report commissioned by the Department of Broadband, Communications and the Digital Economy highlights the issue of high international mobile roaming prices paid by customers.

The report will be provided to the House of Representatives Parliamentary Inquiry on International Mobile Roaming and is already eliciting a round of calls for the Government “to do something”.

“We should be clear what the ACCC and the Government is and is not able to do to solve this problem. The first question that should be examined, is how important is this issue to customers? Mobile carriers with networks in multiple countries and international carrier alliances have already provided the availability of cheaper roaming options,” Mr Skinner said.

“Roaming price differentials can vary by 100% and Australian mobile carriers provide relatively clear roaming price information, yet few customers are willing to take advantage of these price savings. If roaming price differentials are not sufficiently important for customer demand to be elastic, should the Government step in and regulate?

“Through regulatory action within Australia, we can only directly influence the wholesale charge Australian mobile carriers apply to inbound roamers and the retail markup on outbound roaming calls. The first and larger component will only benefit foreign mobile carriers, with lower charges being unlikely to be passed onto their customers. The second is limited to the extent that the retail markup is above reasonable costs. Something that will require extended regulatory investigation to determine.

“The EU has regulated mobile roaming rates for EU customers roaming within the EU. These points to the only feasibly effective method of lowering mobile roaming prices – internationally coordinated regulatory action. For Australia, this will require bilateral negotiations, possibly as a part of bilateral free trade agreements. With no benefit to Australian customers from unilateral regulatory action on wholesale roaming charges, we should reserve this as a bilateral negotiating inducement.

“Let us hope that the Government does not decide to resolve this by implementing a Roam Watch to sit alongside the Fuel Watch and Grocery Watch initiatives.”