If the proposals are adopted by the Parliament and by national governments, phone users in Europe should expect lower prices for all their mobile roaming services by summer 2009, according to the timetable foreseen by the Commission.
Cheaper text messages
The new measures, which were outlined yesterday as part of an update of the roaming regulation, would cap roamed text (SMS) prices at just €11 cents (VAT excluded) across Europe, down from the current average of €29 cents. But the cut could prove to be even more significant for some users as this average hides significant disparities between prices charged by operators. For example, in Belgium at present, a Base customer could pay up to €80 cents for a SMS sent from abroad, while customers of the Dutch company KPN can be charged up to €75 cents (in these cases VAT is already included).
Abolition of per-minute tariffs
The Commission's review of the roaming regulation also seeks to abolish per-minute tariffs in roamed phone calls. Currently, most operators impose this billing system, which, according to the European telecom regulators group (ERG), charges customers for 24% more than the time they actually spend on the phone. "It's like taking the train from Brussels to Paris and being charged to go to Rome," commented Consumer Commissioner Meglena Kuneva.
If the EU executive's proposal is approved, then roaming will be charged per second, as is already the case for most national calls (EurActiv 29/08/08).
More cuts in cross-border call charges
Another measure included in the package aims to decrease current caps on roamed phone calls. These fees are currently limited to €46 cents, but are scheduled to gradually decrease to €34 cents in 2012. Charges for receiving calls will also go down.
Softer stance on data roaming
On data roaming, which is the use of the Web via a mobile phone while abroad, the Commission adopted a softer stance following strong pressure from the industry and concerns raised by consumer groups. The service is in fact at a nascent stage and price caps were considered to be a potential obstacle to the take-up of mobile Internet.
Nevertheless, the Commission requested more transparency from operators. From 2010, consumers should be able to set in advance the maximum amount they want to spend on data roaming, after which their service would be interrupted. This will avoid the so-called 'bill shocks' experienced by some tourists, charged thousands of euros for downloading movies or songs while abroad. The problem is that cut-off schemes are not easy to apply from a technical point of view. Summer 2010 is regarded as an optimistic target.
In addition, the Commission proposed introducing caps at wholesale level on data roaming to tackle the highest tariffs and to increase competition among operators. Wholesale tariffs are those charged by an operator to another one in order to carry a service. They apply when a consumer uses, while abroad, the network of another operator.
Smooth running ahead
The Commission's proposals are very likely to be approved by both the Parliament and the Council, which have a final say on the regulatory package. Many MEPs have already shown support for the new initiative, which has gone down particularly well in view of the approaching elections. Member states should also come out in favour as the impetus for Reding's move actually came from countries like Belgium and the Netherlands, where consumers are charged much more for roaming than elsewhere.
Consumers have also welcomed the new initiative. The main operators immediately responded with strong criticism, while the smaller ones are backing the proposed measures but calling for more pro-competition measures.
Fewer investments
Following the large amount of regulatory intervention in the sector and the expected cut in profits that will ensue, the main telecoms operators fear that they may be forced to reduce investment in new technologies and infrastructure. This was already the case in 2007, according to figures released by Idate, a consulting firm (EurActiv 19/09/08). Operators may also modify their business models and start imposing fees for receiving calls at national level, as it is the case in the US.
