EU in bid to slash mobile call prices abroad[fr][de] 

"We have promised to tackle the issue of excessive costs for the use of mobile phones abroad. Today, we are delivering on that promise," said Commission President José Manuel Barroso as he presented the proposal on 12 July. "Operators have moved too little and too late," he said.

According to the Commission, high international mobile roaming charges currently affect at least 147 million EU citizens, primarily individual consumers and SMEs. It says the average charge is still five times higher than the actual cost incurred by operators for providing the wholesale service.

A new draft regulation proposes to cap the charges that operators impose on each other when customers are using their network while travelling. The Commission proposes to cap the wholesale price on these services and allow no more than 30% to be passed on to the final 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)
• 16.5 cent per minute for receiving a call abroad

The 30% mark-up charge matches "the margin operators can normally make with domestic phone calls," said Telecoms and Information Society Commissioner Vivian Reding.

However, Barroso gave operators "a final chance - a chance to show that they are serious about self regulation". If they voluntarily lower prices, parts of the regulation would simply not come into effect, Barroso said.

"In the proposal adopted today part of the regulation at the retail level will be automatically phased in after a transitional period of 6 months. Of course, I sincerely hope that its effects will not be required as I expect operators to voluntarily lower prices to acceptable levels," he said.

Mobile phone operators said the Commission attempts at regulating roaming were "unnecessary as competition is already delivering substantial reductions in the prices of roaming services". An agreement between a group of leading European operators "will lead to a fall in the average cost of a roaming call within the EU of about 40%," the GSM Association said in a statement.

The GSM Association said it is "strongly opposed" to capping the retail charges customers pay to receive a call on their mobile phone when roaming abroad. Is says "such a price cap would limit operators' ability to tailor roaming tariffs and services to the needs of specific customer groups".

And it believes capping wholesale also has "serious flaws" as it will "penalise mobile operators with relatively high costs and could lead to some operators making a loss" on roaming services. "Some mobile operators incur higher costs than others for a variety of reasons, for example, because they serve a sparsely populated or mountainous region," it said.

BEUC, the European consumer organisation, said it doubted mobile operators would change their ways without further regulation. "Mobile operators have in the past consistently billed their customers extortionate roaming tariffs divorced from real costs. Thanks to the Commission's proposal, consumers travelling abroad will see tangible benefits on their bill," BEUC said.

But it said it will remain vigilant. "Overall, the proposed regulation is a good first step in addressing consumer concerns in mobile communications markets. But we will remain vigilant. We hope that operators will not try to find other markets where they can 'prey' on consumers. Constant monitoring of developments in other markets is therefore needed," said BEUC Director Jim Murray.

Michael Bartholomew, Director for ETNO, the Association of the incumbent telecom operators, said: "Such an intrusive and heavy regulation is unprecedented. Although the Commission has revised some elements of the initial approach, the proposed far-reaching regulatory intervention still entails serious economic risks for the successful and highly competitive mobile industry and for the consumers. This approach would undermine the capacity of the sector not only to innovate but also to continue providing basic services to the consumer at an affordable price."