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EU leaders back roaming charge cuts

Cellcos adopt brace position

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The European Commission (EC) is to get tough with mobile operators over the high cost of roaming charges. Tomorrow, Viviane Reding, Information Society and Media Commissioner, is expected to publish her plans to cut roaming charges and give consumers a better deal.

Last week, European Union (EU) leaders gave their backing for calls to cut the cost of using mobiles while abroad, noting "the importance for competitiveness of reducing roaming charges".

Reding has already shown her hand. Last month she proclaimed: "In spite of many warnings and policy initiatives, roaming prices remain unjustifiably high at the retail level even though competitive pressure may have brought down charges at the wholesale level".

Commenting on the wide difference on charges she said: "The lowest roaming price we found was 20 cents for a four minute peak-time call made on a Finnish mobile contract while roaming in Sweden. The highest roaming price we found was €13.08 charged to a Maltese consumer roaming for four minutes in Latvia. Here, we got a clear indication that the market does not work."

Despite calls for the industry to cut charges, Reding maintains that "prices appear to have remained essentially unchanged", and that customers "continue to pay unreasonably high prices for using their mobile phone abroad".

Regulation is not expected until 2007; and while Eurocrats don't intend to prescribe a specific "ideal" price for international roaming, they believe international roaming charges should be no higher than national roaming charges.

However, the plans to cut roaming charges have already come under fire from mobile operator trade group GSM Association (GSMA), which claims that any regulation is "unnecessary [and] could do long-term damage" to the industry.

It maintains that competition is working and that the cost of roaming across Europe fell by eight per cent last year.

"Further roaming regulation is unnecessary and could have unforeseen consequences," GSMA boss Rob Conway said, adding that competition is the best way to meet the needs of customers across the whole range of mobile services.

He went on: "From the limited information publicly available, the European Commission's proposals appear to be based on an outdated and incomplete view of the roaming market and the wider mobile industry. Before taking the drastic step of bypassing the existing regulatory framework, the commission needs to undertake a careful analysis of the fast-changing European mobile market and the potential impact of any further legislation." ®

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