Original URL: http://www.theregister.co.uk/2008/09/04/reding_data_roaming_cap/

Holiday text messages to cost less than 9p

Text and data caps detailed

By Bill Ray

Posted in Mobile, 4th September 2008 11:29 GMT

Viviane Reding has begun circulating details of her proposed caps on data and SMS roaming. She wants to see prices capped at €.11 for a text message and €1 a MB for roamed data.

The draft text has been sent to the EU Commissioners for consideration ahead of a formal vote on the matter in October. It also includes a proposal to demand per-second billing on calls lasting more than 30 seconds.

The latter proposal is the most controversial, as some countries already require per-second billing and differing increments are used as a tariff differentiator by many companies. "The regulation of billing increments within the Eurotariff or any other roaming tariff would amount to micro-management," the GSMA told Reuters. "Billing increments are a point of differentiation that operators can use to appeal to customers with different preference."

Quite what kind of customer prefers to be billed by the minute isn't clear - but the GSMA has always protested against change, so its stance is unsurprising.

SMS messages currently cost around €.29 to send while roaming around Europe, and some 2.5 billion are sent annually, so cutting the rate to €.11 could see €450 million less revenue for the mobile operators - unless the cheaper costs drives up usage by at least 100 per cent.

The cap on data is a wholesale rate - the amount the network operators charge each other - so punters will end up paying more than that depending on their tariff. But overall it should drive prices - and profits - down.

There was a fear that operators would cut their wholesale prices before Ms Reding had a chance to champion the ordinary euro-citizen by capping them. That now looks unlikely, though, and leaves the operators fighting a rear-guard action against the caps while trying to work out how they're going to replace that lost revenue. ®