Why Kroes is dead wrong about European telecoms

Sep 24, 2013

Earlier this month the OTT calling and messaging service Fring was bought by Genband and today (Sept 24, 2013) Fring announced that it was the technology provider for French mobile operator Bouygues Telecom's B&You service, announced in June, which offers an OTT alternative to roaming services for its customers.

As of today that service is now available for Bouygues customers outside France. The operator claims it has "eliminated" cellular roaming charges although users still have to pay for or locate WiFi to use the service and presumably also pay their standard voice and SMS delivery charges - they make the calls from another country as if they were using their home phone, in other words.

We don't want to carp, but the exceptionally short time from idea to service is simply because this is already an oft-used use case for services such as fring. It's all good stuff but it's not a technical breakthough and it's interesting that it should be announced at the same time as EU Information Commissioner Neelie Kroes is making almost daily speeches to this body and that, crowing about her attempts to regulate down roaming charges as a quid-pro-quo for easing up on just about everything else so that carriers may consolidate in Europe.

The fact is that competition between carriers, as the Bouygues move shows, is quite capable of getting rid of ridiculously high roaming charges.. we just need more of it.

Meanwhile Kroes' utterances are becoming more and more catastrophic by the day - without her package the European telecoms sector is apparently about to implode.

"...time is racing on: the economy is declining, technology is moving ahead, and so are other parts of the world. The telecoms sector hasn't had its Lehman moment yet. But with declining revenues, rising debt, dated business models, I worry about that happening. And I worry about the consequences if it did," she said today to a European Internet body.

I'm sitting here writing this across my cheap and reliable BT broadband service (it would cost me three or four times as much in the US) and making calls on my smartphone (probably at least half the cost of a US equivalent) wondering what Kroes is on and where I can get some.

The answer to European telecoms problems, where they occur, is almost always (as it has been for the last 30 years) a harsh dose of competition which is still the quickest way to a sustainable business model.... not regulatory harmonisation, investment certainty and all the other briefing document guff.

To rebut the Kroes line on 'certainty for investment' and 'spectrum harmonisation': uncertainty keeps them on their toes (as it does nearly all companies operating in the private sector) and regulatory disharmony surely creates opportunities for disruptive plays in specific territories, so may even be a good thing.

And while we're countering Kroes' 'Europe is behind' line, the number of LTE subscriptions in Europe (according to Finnish consultancy Rewheel) is a totally misleading indicator for communications health. HSPA+, which is widely available and subscribed in EU - and is also rated as 4G by some carriers in the US - provides the exact same user experience (as LTE) today. It even has latency at 30-40ms. Why would European users bother switching to LTE?

The correct metric for this topic, argues Rewheel, is mobile data consumption per capita and in this respect progressive markets like UK, Finland, Sweden and Austria, are far ahead of the US, which is on similar level to Germany. End of argument.

Email Newsletters

Sign up to receive TelecomTV's top news and videos, plus exclusive subscriber-only content direct to your inbox.