MEPs hold firm on lower roaming charges

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Members of the European Parliament pledge to stick to the lower range of their proposed price caps for roaming charges. A recent report by national regulators found that providers’ costs for these services are likely to remain below the higher caps originally suggested by the Commission and backed by many member states.

Last month the European Parliament’s industry committee voted in favour of compulsory reductions of cross-border mobile tariffs which were far stricter than what the European Commission proposed (see table) and what most national governments would prefer.

MEPs and Danish officials, who currently hold the EU’s rotating presidency and as such represent national governments, held discussions yesterday (15 March) to reconcile the differences.

Socialist MEP Robert Goebbels (Luxembourg), who was in attendance, said the Danish ambassador “gave some indications about the wholesale prices he is targeting personally but the Parliament delegation said immediately that these prices are much too high.”

The office of German MEP Angelika Niebler, who drafted the proposal, said “It’s obvious that member states have a different idea of the price caps than Parliament.”

Danish diplomats are seeking a mandate for a common position amongst EU member states for negotiations with MEPs. A compromise is expected to be found at another meeting scheduled for 27 March.

‘No material risk’ costs will exceed caps

Last month, the association of the EU’s 27 national telecoms regulators (BEREC) issued a report which foun?d that costs for providing data and phone roaming services were likely to be far below the price caps proposed by the Commission.

“There is no material risk that costs in earlier years will come close to exceeding the caps that have been proposed, either by the Commission or in the [industry] Committee discussions,” it said.

The report’s “cautious estimates” said that by 2014 costs would be €0.05 a minute for voice calls, €0.01 for text messages, and €0.05 per megabyte of data. These are identical to the parliamentary draft’s proposed caps by that year.

Compromise ‘somewhere in the middle’

Both MEPs and EU diplomats expressed confidence that a compromise would be found before the end of June, when the existing regulation on roaming caps expires. It is unclear which side will give way more.

Belgian diplomat Patrick Lamot said the compromise "will be somewhere in the middle. It’s psychological. It’s not possible at the beginning of a negotiation to say ‘our position will not change’.”

“From the Belgian perspective, we support to the fullest extent the idea of reducing prices,” he said.

A middling compromise would disappoint some activists however. Bengt Beier of the Europeans for Fair Roaming Campaign said a midway position between the two proposals would mean “prices that are three or four times higher than what is economically viable.”

“It’s a real let-down that the Council decided to defend the interests of some big telecom companies and not the users,” he said.

EU watchdog questions telecoms

Telecom providers have been increasingly attracting attention in recent weeks on competition issues.

Earlier this week, an attempt by the Italian Parliament to further liberalise telecom services spurred tough reaction.

The Financial Times reported Wednesday that the EU’s Directorate-General for Competition demanded information on meetings held by the so-called E5 group of Europe’s leading telephone provides, made up of Deutsche Telekom, Telecom Italia, France Telecom, Telefónica and Vodaphone.

Requests for such information are sometimes a prelude to formal antitrust probes by the European Commission.

Goebbels argued the companies effectively form an oligopoly.

“These companies control well over 80% of the roaming market in the EU and they put enormous pressure on policymakers to avoid measures which would bring competition and lower prices,” he said.

A September 2010 Eurobarometer poll found that “an overwhelming 72% of mobile users continue to limit their mobile voice calls while abroad because they are concerned about the costs.”

Vittorio Colao, chief executive of Vodafone, warned against lower EU price caps in his keynote address to the Mobile World Congress in Barcelona in February.

“We should stop having this continuous intervention on prices and let the industry reinvest the money,” he said.

In a speech at the same event, European Commissioner for Digital Agenda Neelie Kroes argued that roaming prices remained too high and were limiting consumers’ use of telephone and internet abroad.

“I know that 40% of mobile customers are nervous about using data services abroad. Because, with EU roaming prices still so high, they know they could be in for a nasty surprise when they open their bill,” she said.

Monique Goyens, director-general of the European Consumer Organisation (BEUC), said in a statement: “The Council must listen to what the Parliament is saying on roaming, particularly given the fact they have spoken so strongly on this issue. The caps recently proposed in the ITRE committee's report would bring us closer to a consumer-friendly market in what is a highly uncompetitive one.” 

In June 2007, the European Commission introduced a regulation placing caps on prices of cross-border mobile calls in Europe, the so-called 'roaming regulation'.

The EU executive's intervention was limited to roaming because domestic calls remain a competence of national regulators. The first roaming regulation also excluded text messaging and data. A second regulation entered into force in 2009, introducing further steps to gradually lower caps for voice roaming, together with guarantees against "bill shocks" for data roaming.

Last July the Commission proposed a third roaming regulation and announced plans to structurally reform the European market for roaming phone calls slashing wholesale prices and opening access to the market to new service providers.

The measures were supposed to eliminate differences for cross-border phone calls, saying that price caps will be no longer necessary as from 2016.

  • 27 March 2012:? Third "trialogue" meeting between MEPs and the Council on roaming. Possible compromise on caps to roaming charges.
  • ?May 2012:? Expected plenary vote in Parliament on roaming regulation.

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