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8 October 2008
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Commission and Berlin team up to bring mobile charges down[fr][de

Published: Friday 24 November 2006    | Updated: Monday 15 January 2007   

Germany supports the Commission in its quest to bring down the prices of cross-border mobile phone calls, but the Merkel government wants more far-reaching reductions sooner. 

Background:

International roaming occurs in the following instances: 

  • When a mobile-phone user calls home from abroad, using the network of a foreign operator, his own operator pays a fee to the foreign operator. This wholesale fee is calculated by the phone-user's provider and charged to the user, who pays the normal national phone charge plus this 'roaming charge'.
  • When a mobile-phone user abroad receives a call from home, the receiving party also has to pay a roaming fee. The caller (who may not know that the person he is calling is abroad) only pays the national phone charge.
  • When a mobile-phone user abroad calls a local number there, the call is passed on to the country where his phone is registered and then back again, entailing a roaming charge plus the higher cost of an international call.
  • When two travellers abroad speak to each other on GSMs, both pay roaming charges. In addition, the calling party pays the charge for an international phone call. 

In the past, high wholesale prices for roaming and profit margins have led to prices for international mobile phone calls that Informaion Society Commissioner Viviane Reding considers "not acceptable". In October 2005, the Commission found that some telecom operators charge up to 20 times the cost of a domestic phone call for cross-border calls. In November 2006, at a time when operators claimedexternal that roaming costs had been brought down by 22%, the Commission found that: 

  • On average, roaming prices are still 4 times higher than national mobile calls;
  • in some cases, roaming prices can exceed €12 for a four-minute roamed call abroad, and; 
  • 70% of EU citizens believe that the EU should regulate to bring mobile prices down. 

A recent EurobarometerPdf external found that, in order to avoid high costs, 15% of mobile-phone users in the EU either leave their mobile phone at home or switch it off when travelling abroad. An additional 21% use only text message services (such as SMS) when in another EU country. 63% of respondents said that they use their mobile phone less often abroad than at home. Around 150 million Europeans use their cell phone in a different EU country each year; three quarters of those are on business trips, the rest tourists. 

The Commission proposed, for those reasons, on 12 July 2006, a draft new regulationPdf external on international roaming, which proposes to cap the wholesale price on mobile- roaming services and allow no more than 30% to be passed on to the customer. The resulting retail price caps would currently be: 

  • 33 euro cent for local calls (to an operator within the host country);
  • 49 cent per minute for international calls (to an operator in a country other than the host country), and;
  • 16.5 cent per minute for receiving a call abroad. 

Other related news:

The Commission has now received backing from the upcoming German Presidency. On 22 November 2006, German Economy Minister Michael Glos and Europe Secretary of State Joachim Wuermeling put forward a paper for discussion by member states' permanent representatives. In this document, the two Bavarian Conservative politicians go two steps further than the Commission. 

  • Using a fast-track procedure, Germany wants the caps to come into force during the 2007 summer-holiday season. According to the Commission proposal, the regulation would be in place six months after its publication in the Official Journal, which would mean at the earliest towards the end of 2007. 
  • Germany wants to give mobile operators a chance to offer different roaming rates, below the general caps. These could include flatrates and special rates based on the amount of data transferred in package-based services.
  • According to the German proposal, operators would not be allowed to tie customers to any tariff model for long periods. Consumers would be allowed to switch between tariffs on short notice. 

Positions:

Italy, Spain and the United Kingdom are resisting the Commission's call for a cap on roaming costs. Italy and Spain are popular holiday destinations whose mobile operators make millions annually on tourist's roaming charges. Spain is also home to Telefónicaexternal , one of the world's largest mobile-phone operators, with subsidiaries in five EU member states, including the UK and Germany. Britain houses the headquarters of Telefónica's O2external brand and is home to Vodafone, the world's largest mobile-telecommunications network company with subsidiaries, affiliates and partners in all member states except Slovakia and Lithuania. 

The GSM Associationexternal , which represents mobile phone operators throughout Europe, disputesexternal , based on its own researchexternal , the Commission's figures on roaming, claiming that in fact roaming prices in Europe have decreasded by 22% between Fall 2005 and Fall 2006. 

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