Est. 4min 24-09-2008 (updated: 28-05-2012 ) Euractiv is part of the Trust Project >>> Languages: Français | DeutschPrint Email Facebook X LinkedIn WhatsApp Telegram The European Commission proceeded with its plans to regulate tariffs in the mobile telecoms yesterday (23 September), deciding to impose price caps on text messages sent while abroad, as well as a range of regulatory measures to cut the price of mobile services for consumers. 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. Read more with Euractiv EU seeks to dodge IT row with trade pact overhaul The EU will present plans to re-negotiate a multilateral agreement on trade in information technology (IT) products amid accusations that it is imposing excessive tariffs on imported high-tech goods such as flatscreen TVs and multifunctional printers. Positions Viviane Reding, the EU telecoms commissioner, said: "Using your mobile phone abroad in the EU should not cost unjustifiably more than at home, whether for making calls, sending texts or surfing the Web. Europe's 37 million tourists and 110 million business travellers are waiting for the promise of the borderless single market to finally have a positive impact on their phone bills." Unusually, Commission President José Manuel Barroso decided to comment on the new initiative: "It is now time to demonstrate that there is a truly single telecoms market in which consumers can use their mobile phone in all 27 EU countries without being punished when crossing a border," he said in a statement. "If we get this done quickly we will see tremendous growth in SMS and data services, and send a message that lower roaming charges can be a win-win situation for all," he added. Monique Goyens, BEUC's director-general, said: "Prices closer to real costs, clear and transparent information before the surprise, no more bill shock. A little bit of clarification, and a few additional measures add the perfect finishing touches to this positive and rapid proposal." She welcomed the requested increased transparency on data roaming, but she added: "As it does not seem technically feasible to install information and voluntary cut-off schemes more quickly, maximum price limits for consumers should also be imposed to protect us in the meantime to ensure we stop being overcharged and confronted with bill shocks." MEP Angelika Niebler (EPP-ED), chair of the Industry Committee in the Parliament, which is directly responsible for telecom issues, welcomed the Commission's proposals: "Text messaging from a foreign country is still disproportionately expensive. We now need a political decision to set upper limits. The details of the proposal still need to be discussed, but Parliament supports the Commission's proposals on behalf of all mobile phone users," she said. Daniel Pataki, the chairman of the European Regulators Group, commented: "The ERG welcomes the European Commission's decision to prolong regulating voice roaming and introducing new regulation for SMS roaming. This is in line with recommendations made by national regulators. The industry has failed to take satisfactory action to reduce excessive SMS prices. On data roaming, the ERG is committed to study carefully the proposed cap, bearing in mind recent trends in wholesale prices. Nevertheless, we are also concerned that lower wholesale prices should be readily available." GSMA, the association of the world's main mobile telecoms operators, complained: "In the European Union, the average price of domestic mobile phone services is falling by 13% per annum. In such a competitive market, price regulation is not necessary and is potentially damaging. It is barely a year since the EU took the highly unusual step of introducing retail price caps for voice roaming and there needs to be a comprehensive analysis of their impact before further regulatory measures are considered. A short-term political agenda should not take precedence over the long-term economic impact of regulation," said David Pringle, a GSMA spokesperson. Innocenzo Genna, the chairman of ECTA, the association representing smaller European telecom operators, said: "ECTA strongly supports the Commission's proposal to regulate wholesale voice, SMS and data roaming charges. However, rather than setting retail prices, we believe much more could be achieved to lower prices across Europe for data and SMS roaming through stimulating competition and enabling market entry and expansion of smaller competitors across national boundaries." BackgroundIn June 2007, the Commission introduced a regulation placing caps on prices of cross-border mobile calls in Europe, the so-called roaming regulation (EURACTIV 29/06/07). The EU executive's intervention was limited to roaming because domestic calls remain under the competence of national regulators. The roaming regulation also excluded text messaging and data. However, last February EU Information Society Commissioner Viviane Reding told mobile operators to cut tariffs for both texts and data sent abroad. She gave the industry a deadline of 1 July to significantly reduce fees (EURACTIV 12/02/08) or face regulation. But as early as June it was clear that the price decreases introduced by mobile operators were not sufficient for the commissioner, who declared that only "a miracle" would prevent operators from facing further regulation (EURACTIV 13/06/08). Further ReadingEuropean Union European Commission:Memo on review of roaming regulation(23 September 2008) European Commission:Proposals to review roaming regulation(23 September 2008) [FR] [FR] [DE] EU:Roaming Regulation(27 June 2007) [FR] [FR] [DE] NGOs and Think-Tanks BEUC:Roaming: No more nasty surprises(23 September 2009)
