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Vodafone reduces cost of European roaming
Posted: 08-May-2006 [Source: Vodafone]

[Vodafone releases news it will be reducing the cost of European roaming by 40% by April 2007 in comparison to last summer - average cost to drop from EUR 0.90 to less than EUR 0.55 per minute.]

Vodafone announces today that average European roaming costs for Vodafone customers will be cut by at least 40% by April 2007, when compared to last summer. This will benefit over 30 million Vodafone customers who roam every year, and will see the average cost of roaming in Europe fall from over EUR 0.90 to less than EUR 0.55 per minute.

Vodafone also announces that it will enter into reciprocal wholesale arrangements with any other European operator at no more than EUR 0.45 per minute for voice calls within the EU from October 2006. This will enable both Vodafone and other European mobile operators to continue to lower the cost of roaming to customers outside of their own networks.

Arun Sarin, Chief Executive, Vodafone, said: "The European Commission and European Parliament have made it clear that they expect to see change. Our announcement today shows that the market, led by Vodafone, is meeting those expectations by providing what our customers tell us they want. Also, by addressing both retail and wholesale prices, we are providing a platform for sustainable, lower retail prices across Europe in the future. We understand the powerful appeal that roaming has in the aspiration for a Europe in which people can travel, live, move, work and invest freely. We believe the market is the best way to meet customer needs, not regulation".

VODAFONE'S PROPOSALS IN DETAIL

Retail Pricing: In 2005, Vodafone launched Vodafone Passport, a service which enables customers to take their home price plan abroad for a small connection fee per call. Passport customers have, on average, saved at least 30% on the cost per voice minute when roaming within the EU during the period June-September 2005 when compared to their average cost per minute during the period June-September 2004. By May 2006 there were over 6 million customers using Vodafone Passport within the EU, with 100,000 signing up free of charge every week.

Vodafone now proposes to implement price reductions which will deliver average savings of at least 40% for European roamers. This is done by calculating the cost per minute for all Vodafone's European customers who roam within the EU during the month of April 2007 and comparing this to the average cost per minute for all European customers who roamed within the EU during the last summer period (i.e. June-August 2005). Vodafone proposes that the average cost per minute for customers of its subsidiary operating companies will fall by at least 40% in each national market on the basis described above.

The average cost per minute for Vodafone's European customers when roaming within Europe during the period June-August 2005 was over EUR 0.90 per minute. Vodafone anticipates that the average cost per minute for international roaming within Europe will fall to below EUR 0.55 per minute by April 2007.

Wholesale Pricing: Vodafone can deliver significant cost advantages to customers who roam as a result of its network coverage within Europe. Vodafone has subsidiary companies in 11 of the EU25 Member States and affiliate interests in a further three markets. In order to provide roaming services outside of these markets, Vodafone enters into wholesale arrangements with other mobile operators who are not part of the Vodafone Group or which are affiliates.

Vodafone wishes to reduce the costs of roaming for its customers and an important component of this strategy is to reduce the wholesale costs that it pays to other mobile operators in providing roaming services throughout the EU. Vodafone recognises that other operators will also wish to lower their wholesale roaming costs and that they may seek access to Vodafone's pan-European network in order to do so. To achieve these objectives Vodafone proposes to offer on request, to all and any mobile network operator licensed and established within the EU25, an average charge for roaming on Vodafone's European subsidiary networks of no more than EUR 0.45 per minute for roaming calls within the EU, down from an average wholesale rate of over EUR 0.70. This offer is conditional upon the requesting mobile network operator offering an average charge of no more than EUR 0.45 per minute (or a lower reciprocal charge by mutual agreement) for all or any European mobile networks over which it exercises management control.

In order to support the development of lower retail prices and the continued growth of Passport during 2006, Vodafone intends that such wholesale arrangements will be available to other mobile operators on request by 1 October 2006 at the latest.

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