1. C1 Richard Feasey European Parliament 8 January 2009 1 Roaming II Richard Feasey 8 January 2009

2. C1 Richard Feasey European Parliament 8 January 2009 2 Context Vodafone’s total European revenues fell by 1%, voice revenue by 4% and voice roaming revenue by 12% in 6 months to September 2008 Mobile voice prices fell by 12% in the 6 months to September 2008. Passport roaming prices fell by 20% in the previous 6 months. Debt markets are closed and all new investment in Europe’s digital infrastructure must be internally funded. Other Commission proposals would remove one quarter of mobile industry cashflows over next 5 year period Roaming I lowered prices but also shrunk the market Five years ago Freemove and Starmap planned pan-European alliances to compete with Vodafone. Today we argue about wholesale price caps 70% of Vodafone’s data roaming customers already use flat rate tariffs. Data roaming prices are already falling by over 40% a year

3. C1 Richard Feasey European Parliament 8 January 2009 3 Specific points Agree with both Rapporteurs that Roaming II provides opportunity to eliminate bill shock –allow industry to define detail and build upon existing actions –pre-defined credit limit as default –opt in to continue beyond the limit –focus on doing this well and fast (and drop other ineffective obligations) –customers already opted into better tariffs should remain unaffected SMS retail price caps mean Roaming II impacts domestic pricing in competitive national markets –no case at all for setting retail caps below competitive domestic levels –no evidence of consumer harm or dissatisfaction –Europe Economics say 18 cents (<20% domestic)

4. C1 Richard Feasey European Parliament 8 January 2009 4 Specific points Proposed voice price caps accelerate rate of price decline for terminating calls from -8% p.a. in 2007/8 to -23% in 2011/12-2012/13, without any explanation as to how operators are going to reduce unit costs by this magnitude –Europe Economics again right to argue that MT caps should track underlying efficiency improvements, raising 2012/13 target from 10 to 16 cents No simple exit from regulation once applied. Aim to minimise distortion at the outset rather than attempting to reverse later