EU agrees plan for cheaper calls abroad
Brussels' attempts to slash the cost of using a mobile phone abroad before the start of the summer holidays came a step closer to success after EU countries and MEPs successfully hammered out a compromise deal following months of strenuous negotiations.
Holidaymakers could see their mobile-phone bills decrease this summer if EU member states and the full Parliament give their approval to a compromise reached on 15 May between a delegation of MEPs and the Council Presidency.
After several rounds of tough negotiations, a compromise was agreed that would see annually staged cuts, over three years, in charges on calls placed and received abroad.
Initially, the cost of making a call would be set at €0.49, while it would cost just €0.24 to receive a call. The prices would then fall to €0.43 for outgoing calls and €0.19 for incoming calls in 2009.
The wholesale rate that network operators charge each other to connect a call would be limited to €0.30 a minute in the first year and go down to €0.26 in 2009.
If adopted, the preliminary deal would come into effect in July and all customers would see the new tariffs apply automatically three months later – or earlier, if they request them during this transition period.
According to Commission figures, average charges paid by roughly 147 million EU citizens making and receiving phone calls abroad (so-called roaming) are still five times higher than the actual cost incurred by operators for providing the service.
These fees, which currently range from €0.58 to €5 per minute, allow mobile operators to reap in an estimated €8.5 billion per year.
At the start of the 2006 holiday season, Information Society Commissioner Viviane Reding presented a draft regulation to cap such charges. But, the EU executive, its 27 member states and members of the European Parliament have been finding it hard to agree on a final package.
A vote in Parliament had been scheduled for 9 May 2007 but had to be postponed, due to a compromise. The main issues dividing MEPs and national telecommunications ministers were:
- Maximum cost for making an international call: The Parliament and telecommunications ministers have been haggling about the size of the price cuts for months. In the latest attempt to reach a compromise, MEPs had called for charges to be cut to €0.45 per minute for outgoing calls and €0.20 for incoming calls, while ministers demanded higher fees (€0.60 and €0.30 respectively) and more industry-friendly terms.
- Implementation: Disagreement had also been rife over whether customers should benefit automatically from the new EU tariff when using their handsets abroad ('opt-out' system) or whether they would have to make an explicit request to their operators to benefit from the new rates ('opt-in' mechanism). Governments had been pushing for the latter solution.
The GSM Association (GSMA), which represents more than 700 mobile operators around the world, has warned that consumers should not celebrate yet as phone companies could be forced to increase domestic charges in order to make up the shortfall.
"We're disappointed. The price caps are very low. They leave no room for competition below those levels. They will become the standard tariff," said David Pringle, spokesman for the GSMA.
He said that the proposal "smacks of a planned economy-style approach to the market", and added that informing all customers of their tariff choices would be a "huge exercise in logistics".
EPP-ED MEP Paul Rübig, Parliament's rapporteur on the roaming regulation, said: "We have promised to deliver before this summer and to bring down roaming prices considerably. It is time for all member states to live up to this promise."
"We can't guarantee an agreement, but we're almost there," added Industry Committee Chairwoman Angelika Niebler (EPP-ED).
Giles Chichester, industry spokesman for the British Conservatives in Parliament, said that the compromise was not perfect, as he had hoped that charges for receiving calls while abroad would be eliminated and that warning icons informing people of the charges before they make or receive a call would also be made mandatory.
However, he concluded: "This proposal will protect innocent consumers going on holiday in parts of Europe from receiving a nasty surprise in the form of their mobile-phone bill on their return."
"I would have thought we could have gone the extra mile, and I think there is room for improvement," said Socialist MEP Joseph Muscat.
Greens/EFA shadow Rapporteur David Hammerstein said: "While today's proposal falls short of the cuts the Greens felt were necessary, it goes some way towards bringing the great roaming swindle into check and making it easier for Europeans to call across borders."
He expressed satisfaction that the new Eurotariff would apply to all consumers by default, saying: "The proposed 'opt in' would have given service providers the opportunity to pull a 'fast one' on their customers - enabling them to take advantage of customers who are not informed about the changed tariffs and continue to apply their excessive roaming fees."
"The sooner tariff reductions enter into force, the better for EU consumers," he concluded.
- 16 May 2007: Permanent representatives of the 27 member states in COREPER are expected to give its approval to the compromise package.
- 21 May 2007: Expected vote in Parliament's industry committee.
- 23 May 2007: Expected vote in Parliament.
- 7 June 2007: European telecommunications ministers expected to vote in Council.
- If adopted, the preliminary deal would come into effect in July.