I hope we’re going to see a lot of competition in the next years from WiMax solutions with mVOIP and e-mail. These would hopefully lead to a payment system as common in the “internet world”. Roaming would just be paying a different provider for one day/ week/ month as common with WiFi.

The difference between the two models is why 3rd parties can make money in Europe offering mobile VoIP. The economics for mobile VoIP in the US are not nearly as attractive, precisely because the price per outbound minute is so much lower than the rest of the world. There is still a market for International mobile VoIP calling from the US, again because of the terminating charges outside the US.

In a system where there is no terminating charge it is possible to only charge for outgoing calls, or only for incoming, or a different rate for incoming and outgoing, or for a fixed amount of minutes per month etc. The great thing of the European GSM model from the perspective of the operator is that competition is limited to one model. One model with strict lower limits on charges per minute and as a result per month.

The EU model creates a dependency for one operator revenue upon other operators for both roaming and terminating and it is there where the market failures are. If these dependencies weren’t there, each operator could determine themselves how many minutes they would be willing to sell. The same goes for roaming if the retail price of roaming could be determined by the foreign network, than the business of the home network would not be able to depend upon the roaming charges.

All in all, it seems the mobile sector in Europe is the only sector that can depend on its competitors for its revenues. It would be great to be a baker and depend on other bakers for revenue. Or to be a journalist like Om and know that Red Herring and CNET will foot part of the bill.

You can send me 1000 text messages and again, I don’t pay a thing.

People here in Finland don’t even use voicemail, we just leave you a text message if you don’t pick up.

Numbers can be manipulated.

One more thing, I’m on prepaid, yet I rarely spend more than 20 euros on credit per month.

<3 Europe.

The terminating charge for terminating a call on the mobile net are 10 or 11.4 cents per minute (see http://www.opta.nl/download/201479+mobiele+gespreksafgifte%2Epdf page 8/222) When an operator offers a lower per minute charge you will have to look for the following catches. 1. Sim only: The per minute charge for a sim only is just for what you call within the bundle. Since you get a subsidy from the operator, this per minute charge is lower, but only because they pay the difference with the subsidy that would otherwise have gone to a phone or other goody. Calling outside the bundle is 22 cents per minute (orange) or 25cent (T-mobile NL). Reasoning is quite simple, they hope you go outside your bundle and start paying real money. 2. Market share of the operator. The bigger the operator, the bigger the chance that the call will be on its own network. So it can sell more minutes because of owning its own network (also terminating to fixed is 1cent/minute 3. Special deals on its own network. Orange NL offers two thousand minutes to one number on its network for free.

All in all, terminating charges are king. Free money for the operators. GSM Europe will do everything to protect this just look at this report by Gilbert and Tobin and CRA International http://www.gsmworld.com/documents/ip_intercon_full.pdf It’s completely worthless, but it sets the stage. :-)

In the Netherlands there are providers offering calls at less than 10 cents per minute, I don’t expect them to sell below their marginal costs.