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Press release
FOR IMMEDIATE RELEASE
HELSINKI 22 May 2013
Germany: The blueprint of the single EU telecoms market? Rewheel hopes not.
Mobile operators charge over 3 times more for a gigabyte in Germany than in the UK and up to 15
times more than in some small EU member states like Finland, research reveals. It is their interest in
sizeable European fixed broadband businesses that keeps owners of Germany’s networks from
driving competition in the mobile sector, says Rewheel.
Rewheel, the Finland based telecoms consultancy specialised in mobile data has carried out a
comprehensive research of all smartphone and dedicated mobile data tariffs in the EU27 member
states during April and May 2013. What makes Rewheel’s research different from other mobile tariff
benchmarks is that in addition to simply tracking the tariffs Rewheel has also characterised pricing of
different telco groups and assessed the impact of protective versus competitive pricing practices to
mobile internet adoption and efficiency of using national radio spectrum resources.
Rewheel urges Neelie Kroes, EU’s Commissioner in charge of the Digital Agenda to consider the
research, especially its findings for Germany, EU’s largest internal market, before finalising her
proposal for a single European electronic communications market, to be presented to the European
Council in June 2013.
German smartphone tariffs and data only mobile packages are among the most expensive in EU.
While a gigabyte of data volume on smartphones costs, on average, over €24 in Germany, in the UK
it costs €7 and in Finland only €1.6, including comparable amount of traditional voice minutes and
SMSs. As for data only tariffs for laptops and tablets, on average, a gigabyte costs €6 in Germany,
€4.5 in the UK and as low as €0.7 in Finland.
High prices inhibit mobile internet adoption in Germany: the mobile internet user penetration is below
the EU average. Moreover, the utilisation of Germany’s national radio spectrum resources –
expressed as mobile data volume consumption per capita – is over ten times lower than the level
observed in the most progressive member states, like Finland.
Economy of scale has been the main argument behind envisioning a new EU telecoms landscape
dominated by a few large pan-European mobile network infrastructures. But the sharp contrast
between the poorly performing large German and the top performer small Finnish mobile market
proves that economies of scale in customer bases and infrastructure has little to do with cost and
radio spectrum efficiency, says Rewheel.
According to Rewheel the German mobile market performs poorly despite its large size because it is
dominated by four large multinational operator groups – Deutsche Telekom, Vodafone, TelefonicaO2
and KPN E-Plus – that have vested interests in fixed broadband businesses in various European
countries. Obviously, Finnish-like prices and gigabyte allowances on mobile tariffs would erode the
market relevance and asset valuation of these telcos’ fixed broadband businesses, says Rewheel.
Average price per GB and average minutes & SMSs included in smartphone tariffs
Average includes all smartphone tariffs that met the smallest GB-basket (0.1GB, 100mins, 20SMSs)
€25
1,094mins
1,352SMSs
€20
Independent challengers
Incumbents
E4 group members (Deutsche Telekom, France Telecom, Telefonica, Vodafone)
1,448mins
1,745SMSs
925mins
1,204SMSs
€15
1,268mins
2,007SMSs
722mins
1,409SMSs
2,427mins
2,256SMSs
717mins
1.032SMSs
€10
1,206mins
1,341SMSs
€5
1,170mins 1,703mins
2,523SMSs 1,933SMSs
2,288mins
1,741SMSs
€0
Vodafone
KPN
France
Telecom
Telefonica Deutsche
Telekom
Telekom
Austria
Telenor
Free, DNA, TeliaSonera
Play, BITE
3
Tele2
“As lowering energy prices (€/kilowatt hour) is key in improving the Union’s industrial competitiveness,
ensuring competitively priced gigabytes for mobile devices and the internet of mobile things is
essential to the digital economy’s competitiveness”, said Antonios Drossos, managing partner of
Rewheel.
“The winners are the Nordic, UK and Austrian digital economies because strong local regulatory
oversight and competition enforcement in these countries is driving price competition, penetration and
growth. On the other side of the wall in EU’s many protected markets incumbent multinational telco
groups – among them the same ones that are responsible for the German mobile sector’s poor
performance – lobby for more consolidation in the mobile network infrastructure space and are
threatening with an investment embargo in a desperate attempt to resist change and protect their
inherited oligopolistic high profit margins”, said Antonios Drossos.
“EU’s single telecom market is threatened by the lack of mobile network infrastructure based
competition within the national borders of half of EU’s member states and from the noticeable
absence of pan-European retail operators offering borderless European tariffs.”
The full version of the Rewheel EU27 mobile data cost competitiveness report – May 2013 (pdf, 75
pages) is available on Rewheel’s website, www.rewheel.fi.
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For further information please contact Antonios Drossos, Rewheel managing partner at
+358442032339 or antonios.drossos@rewheel.fi