International call prices don't need regulating

Monday 3 July 2017 | 17:01 CET | Market Commentary

In the wake of the recent introduction of 'roam like at home' in the EU, a number of consumer groups and politicians have called for similar regulation of international call prices. If we now pay the same to call home when in Spain as at home, why not when we call Spain from home? The Dutch liberal democrat party has taken up the campaign, following a similar call from 150 MEPs last year. However, there are good reasons to oppose such legislation.

The argument in support of new regulation is that high domestic rates for calling other EU countries make increasingly little sense in light of the RLAH rules. A high rate for a little-used service does has its advantages though: it isolates high costs in a single, clear place (calling abroad). This is a profit generator for operators and helps ensure they don't raise prices elsewhere. If international prices are regulated, after already termination rates and roaming, then other prices - used by many more people - will start to rise. The operators need to maintain their margins. 

The European Commission has come out against regulating international calls, noting that there are sufficient alternatives for end-users. Or in other words, the existence of a standalone calling app like Viber may be at risk if parties like D66 get their way. Traditional competitors, such as the MVNOs Lebara and Lyca, would also lose a way to differentiate their offer. 

In short, this is an issue better left to the market. 

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