Don't regulate for price, regulate for innovation

A message from our CEO Geraldine Wilson about the current Ofcom request to hear about people's bill shocks from high roaming charges.

When markets fail to provide consumers the best price there are two options; regulate the price or ensure market access for new innovations.

OFCOM, who are asking consumers to submit their bill shock stories to them, is right to look at this, but the answer is not going to be solved by a patchwork of price regulation. While competitive pressure squeezes margins in home territories, operators are duty bound to look to the roaming voice, text and data market to make up the shortfall, and will fight every step of the way to protect their profits. Very few customers consider international roaming rates when they buy a contract – so it’s easy money, and it won’t be given up without a fight.

Today I can call the USA for only 0.5p per minute on a fixed line phone and very often free using Internet telephony products. This massive change in the market which allows me to talk for hours to the USA with out once thinking of the price has all been driven by Internet based innovation. It was not mandated by regulation. The only thing the regulator needed to do was ensure a level playing field for innovators and market forces did the rest.

It will be the same with mobile. Market forces will get the best deal for consumers if the market is open. For those operators that don’t keep up – the roaming market will move to the best players. But the regulator must regulate to ensure competition and step in where operators apply blocking tactics such as unfair bundling practices or misleading price plans.

Don't regulate for price, regulate for innovation.

Comments

[Dan Warne]

Of course, it's kinda good for Tru if traditional telco roaming rates stay high.. ;-)