Vodafone reports high take-up of Passport

Pauline Trotter, Principal Analyst

Yesterday Vodafone reported that the number of customers signing up for its Passport service has reached the 10m mark - a figure that represents over one third of its roaming customers.

Vodafone's figures show that its Passport customers were paying 50% less per minute for voice roaming calls in mid-2006 than they were in mid-2005, and that they are also now paying less than €0.45 per minute on average for a roaming voice call. It claims that it is well on the way to meeting its May 2006 commitment to reduce the average cost of roaming (across all customers) by 40% by April 2007 compared with mid-2005. Vodafone also reports that it has made good progress on reducing wholesale roaming rates through reciprocal agreements with other operators, and that 50% of its wholesale traffic will be priced at €0.45 or less.

Passport was launched in May 2005 and is available in 13 Vodafone markets. The service enables Vodafone customers to take their home price plan with them for a small connection fee when they roam on overseas networks (for example, this fee is £0.75 for UK customers).

Any reduction in retail roaming rates has to be good news for mobile customers, and the rapid uptake of Passport by customers fed-up with high roaming charges is no surprise. It is also good that Vodafone has made some progress in negotiating "future" reductions on wholesale roaming rates with other operators, since it can only base its retail tariffs on the wholesale tariffs that it can obtain from other mobile operators.

However, Vodafone's 2007 €0.45 per minute target is unlikely to impress the European Commission, which is proposing a €0.36 per minute wholesale figure. And we suspect Vodafone's reductions will be seen as only a small step in the right direction by its corporate customers. They will continue to argue that much bigger cuts in retail rates need to be made and that the cost of data roaming needs to be brought into the equation. Roaming for enterprises isn't just about the convenience of making calls on holiday - for enterprises, the stakes are higher, since the high cost of roaming reduces their ability to conduct business internationally. (More information on the enterprise perspective can be found in the recent EnterpriseMobility@Ovum report International roaming: an enterprise perspective.)

Pauline Trotter is a principal analyst specialising in enterprise communications, and is responsible for Ovum's research among enterprise users, from SMEs to large multinationals. She contributes to both the EnterpriseMobility@Ovum and IP-Enterprise@Ovum advisory services, most recently in the areas of fixed-mobile convergence, remote access and IP telephony.