EU mulls new mobile roaming price cuts

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The European Commission is studying new measures to bring down the price of cross-border calls, including the possibility of introducing ceilings on data roaming, EURACTIV has learned.

The move comes as EU judges are preparing to issue a crucial ruling on the legality of existing price caps on cross-border mobile phone calls, agreed in 2009 (EURACTIV 25/03/09).

On Tuesday (8 June), the European Court of Justice will assess the legality of the so-called roaming regulation, which telecoms companies claim is disproportionate.

The legal challenge was brought forward by telecoms giants Vodafone, Telefonica, T-Mobile and Orange.

They argue the rules violate the subsidiarity principle, whereby the EU should only intervene when member states are patently incapable of doing so.

The Court is widely expected to follow the recommendation of its advocate-general, who backed the regulation in an opinion issued in October last year.

However, some degree of uncertainty remains over the final decision.

Setback or renewed ambitions?

A ruling against the regulation would be a major setback for the European Commission since roaming caps have been widely popularised in the media and are often described as one of the EU's success stories.

But the Commission does not seem concerned with the upcoming Court ruling. Instead, it is planning further actions to bring down cross-border prices. The aim is to establish a genuine European internal market where calls between EU countries would cost the same as making national phone calls.

"The difference between roaming and national tariffs should approach zero by 2015," according to the European Commission's 'Digital Agenda', which sets out the EU executive's goals on telecoms policy for the next five years.

According to EU figures, the average price per minute for roaming was €0.38 cents in 2009, while the average price per minute for all calls made in the EU – including roaming – was €0.13 cents.

To reach this ambitious target, many options are possible. Neelie Kroes, the EU's commissioner for the Digital Agenda, is a free-market champion and would prefer to see prices go down thanks to competition rather than by imposing new obligations on market players.

Kroes would like to see voluntary commitments from telecoms operators but triggering a virtuous circle is far from easy and the new commissioner seems short of ideas at this point on how to start the process.

Data roaming

If no solution emerges soon, Kroes might be forced to follow her predecessor’s hard line and start imposing caps of her own.

Viviane Reding, Kroes's predecessor in the digital portfolio, pursued the cap policy with no hesitation, provoking furious reactions from telecoms firms.

According to Commission sources, the most likely step forward if the hard-line regulatory approach is pursued would be to introduce ceilings on data roaming, where the differences between domestic and cross-border tariffs are the widest.

In 2009, when Reding last reviewed the roaming regulation, the European Commission set a €50 limit for data roaming expenses per month (excluding VAT) in order to prevent so-called "bill shocks". According to EU rules, once a customer has reached 80% of this amount, the mobile operator must send a warning message giving details of a procedure to continue data roaming. Should the user fail to respond, the operator must automatically cut the service once the cap is reached.

But no ceilings are in place yet to limit the price of data roaming as is already the case for regular mobile phone calls.

By the end of June, the Commission will publish a report detailing the achievements and shortcomings of the roaming regulation. "This will help decide where we are going," said Kroes' spokesperson.

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.

However, in February 2008, EU Information Society Commissioner Viviane Reding told mobile operators to reduce roaming fees further and voluntarily cut tariffs for both texts and data sent abroad (EURACTIV 12/02/08).

A new regulation, agreed the following year, introduced further steps to gradually lower caps for voice roaming, together with guarantees against 'bill shocks' for data roaming. The new regulation entered into force in mid-2009 (EURACTIV 25/03/09).

  • End June 2010: Commission to publish report on achievements and shortcomings of roaming regulation.

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