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EU regulators back wholesale route to cut roaming charges

At odds with EC

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Europe's telecoms regulators have supported plans to cut roaming charges but believe this should be done by cutting the cost of wholesale charges rather than retail prices.

The European Commission (EC) has already announced plans to regulate the amount cellcos can charge punters while using their phone overseas. Four weeks ago the EC published proposals for wholesale and retail regulation that would link international retail roaming charges with the price punters pay in their home country.

But the European Regulators Group (ERG), which includes UK regulator Ofcom, believes that attempting to regulate retail prices could be counter productive for end users. Indeed, the ERG said that while it "supports the commission's objectives, it has significant reservations about the regulatory mechanisms proposed by the EC".

Instead, the ERG favours wholesale regulation and wants to impose a single European-wide price cap on wholesale roaming charges (the price imposed by one mobile network operator on another for the use of its network) set at around €0.30, as opposed to the current average level of about €0.75.

And in a bid to ensure that these cost savings are being passed on to consumers, cellco roaming charges would be monitored.

The introduction of retail price caps should only be introduced if wholesale regulation failed, the ERG said.

"Mobile roaming charges are simply too high and do not currently represent a fair deal between the customer and the operator," ERG chairman Kip Meek said. "We share with the commission a desire to see prices continue to fall. However, we continue to believe this can best be achieved through wholesale price regulation with retail price regulation held in reserve."

Vodafone announced earlier this week it would cut roaming charges ahead of any intervention by the EC. It reckons that average European roaming costs for Vodafone customers will be cut by at least 40 per cent by April 2007, when compared to last summer seeing prices fall from more than €0.90 to less than €0.55 per minute. ®

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