Europeans Pay Less for Mobile Use, but at a Cost
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Version 0 of 1. LONDON — Europeans are paying almost two-thirds less for their cellphone contracts than their counterparts in the United States, according to a report to be published Thursday by the British telecommunications regulator. The report comes as many of the Continent’s largest cellphone operators lag international rivals like Verizon Wireless and China Mobile on investing in mobile infrastructure, including high-speed data networks. The deals in Europe have been promoted by regulators eager to increase competition between carriers. In Britain, consumers pay an average of 13.88 pounds, or $22.70, a month for their cellphone contracts, compared with $63.62 in the United States, according to an analysis of the figures provided by Britain’s Office of Communications. Yet analysts say the push to reduce consumer costs has come at a price. Many of the largest European operators, like Vodafone of Britain and Deutsche Telekom, the German owner of T-Mobile, have delayed investment because competition between operators has depressed their revenue. The delays may eventually place Europe’s lackluster economy at a disadvantage as North America, Asia and other regions invest more in high-speed data networks that support the growing use of smartphones and tablet computers worldwide. “In Europe, regulators have emphasized competition over investment,” said Steven Hartley, who runs the industry, communications and broadband team at the consulting firm Ovum in London. “We are now at a point where cheap deals don’t necessarily mean the best value for consumers.” The lower bills have not translated into faster data connections; Europe continues to lag the speeds in the United States and other regions. In France, for example, the average mobile connection speed in 2012, the latest figures available, stood at 1.3 megabits per second, according to a report by Cisco. That compares to 2.5 megabits per second in the United States in the same year, and the gap between the countries is expected to grow by the end of the decade. “Europe’s economy may become weakened if it doesn’t compete with other countries that are rolling out fast data networks,” Mr. Hartley said. “There’s a greater good to be served by giving people faster mobile connectivity.” Europe’s telecommunications sector remains in flux as policy makers push through regulatory changes for next year that may limit the amount of money operators can collect when people use their cellphones in different countries. These so-called roaming charges have been a major source of income for operators, but the European Union is expected to pass legislation that could further restrict, or even scrap, the fees. Cellphone operators also are undergoing a major reshuffle, as the largest European groups and global competitors like AT&T and América Móvil of Mexico try to acquire smaller firms. Analysts say any potential deals could lead to a new round of investment because operators would be likely to upgrade their network speeds to attract more customers. Several deals already have been announced. They include the purchase of the German operator E-Plus by the Spanish giant Telefónica for around $11.5 billion. Analysts say that Vodafone, which sold its stake in Verizon Wireless this year for $130 billion and has already announced 7 billion pounds of new investment, also could try to increase its presence in Europe. “There’s scope for consolidation,” said Adrian Baschnonga, a telecoms analyst at the consulting firm Ernst & Young in London. “It could fuel a level of pent-up investment that has to happen.” |