INTERNATIONAL CALLERS SUBSIDISING MOBILE OPERATORS – DECEMBER 2001
A dark side to the mobile boom is emerging, according to a recent study from TeleGeography Inc (http://www.telegeography.com). The cost of calls to mobile phones are often far more expensive than calls to traditional, fixed-line telephones. Approximately 31% of incoming international calls are made to mobile subscribers in Europe, but those calls account for nearly 80% of international carriers’ total termination costs to that region.
Calls to mobile subscribers are more expensive to terminate than calls to fixed-line phones because of the relatively higher interconnection fees charged by mobile operators. In many European countries, fixed-line termination costs between one and two cents per minute. By comparison, typical mobile termination rates range from approximately 8 to 20 cents per minute. It’s not uncommon for mobile termination in Europe to cost ten times as much as fixed-line termination. Since long-distance carriers can’t afford to absorb the cost themselves, they end up having to pass it on to their callers.
While mobile phones have had a large negative impact on carriers’ costs, they also have boosted their outgoing traffic volumes. In 2000, mobile-originated international phone calls grew 66%, three times as fast as international calls from fixed-line phones. Approximately 15.3% of the world’s 132.7 billion minutes of international calls were made from mobile phones in 2000.
Table 7 – Percent of international calls made from or terminated on mobile phones – 2000
Region
Mobile-Originated
Mobile-Terminated
Africa
19%
21%
Latin America and Caribbean
20%
10%
US and Canada
2%
3%
Asia and Oceania
22%
21%
Europe
22%
30%
World average
15%
21%
(Source: TeleGeography research)
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