Wednesday, June 11, 2008

BPN 1125 Costly sms texting from abroad

The Dutch telecom watchdog OPTA has started another fight with the telecom companies operating in the Netherlands. The bone of contention is the price of sms texting messages sent from a European country to The Netherlands. This is way too high, the watchdog claims. It calls upon the telecom companies too lower the charges and threatens, that it will go to the European Commission (EC), if they do not conform to the call.

The whole affair reminds of the mobile telephone tariffs contention half a year ago. Having warned the telecom companies to lower their tariffs, the companies did not give in. The EC ordered the tariffs to remain under the ceiling of 58 eurocents per minute. In this way the Dutch saved 77 million euro in half a year. The volume of telephone calls increased with six percent.

The Dutch telecom watchdog is now after sms texting as the Dutch operators such as KPN, Vodafone and T-Mobile apparently have raised their tariffs to compensate the lost revenues of the lowered mobile telephone tariffs. The average for and sms texting message to the home country in Europe is 35 eurocents, while the Dutch have to pay 58 eurocents on average for an sms texting message sent home.

Of course the operators deny the rise and use fallacies in order to justify the high tariff. With dry eyes Mr Bram Oudshoorn, spokes person for KPN (still loyal to KPN after all these years), looked into the television camera and explained that the number of Dutch people holidaying in Spain is a lot for Holland and they do send many sms texting messages. But for the Spanish company with which KPN has a bilateral agreement, this is only peanuts. That is why the Dutch pay more than for example Spanish people texting from The Netherlands. A nonsense argument as there are more Dutch holiday makers in Spain, than Spanish people working in The Netherlands or holidaying in the Low lands. He was lucky to find a non-critical journalist (and there are many in the field of technology); for I wonder how he would have explained the tariffs in Estland and Malta being under 20 eurocents for a sms texting message from a European country to Estland. But Mr Oudshoorn announced lower tariffs for summertime (most likely to be raised after that period).

It will be interesting to see whether the EC will interfere and put a ceiling to the tariffs. So the next battle area will be mobile internet. The tariff for this went down from 6,60 euro per 1MB to 5 euro. But this is still a high price. Some operators have started to put a flat fee in effect for consumers. Still the operators think from a production point of view and do not look at the marketing side of mobile internet. Even the basic lessons from history have not been learned. Setting a unit like 1 MB creates a taxi meter, something the veteran information services like Dialog and BRS did. Setting a flat fee creates an open market, new products and new sources of revenues.

Blog Posting Number: 1125


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