Submitted by Mike Grenville on Thu, 05 Feb 2004 23:17

According to a Swiss consumer organisation a lack of competition enables mobile operators to overcharge consumers by 300 million Swiss Francs (approx. 200 million Euros) a year for SMS

According to the study on SMS prices undertaken for TV programme "Kassensturz" broadcast on SF DRS, the actual cost to operators of sending an SMS is less than 1 centime. With a standard price between 15 and 25 centimes, Comparis calculated that Swiss texters spend nearly 600 millions swiss francs a year. When one takes into account the technical costs, that still gives a margin of 1,500% to 2,500% it concluded.

Lack of competition has led to inflated prices. For example Orange SMS prices (15-25 centimes) have not changed since February 2001. Swisscom and Sunrise have kept the same high prices since 2000.

Comparis argues that a margin 5% should be quite enough to cover the cost of technical infrastructure. 95% is thus spent on marketing or comes in as profit. By comparison fixed line margins are between 20% and 30%.

Comparis sugests that if operators could be persuaded to give up "some of their unbelievable margins and offered more reasonable prices, 10 centimes for example, that could save Swiss text messages about 300 million francs a year."

The organisation points to Denmark as example where the cost of an SMS is between 5 and 11 centimes.

However Swiss operators have rejected the complaint saying that their prices are below the average across Europe.

www.comparis.ch