EU wins roaming battle against telecoms giants

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Telecoms giants suffered defeat yesterday (8 June) after the European Court of Justice (ECJ) ruled that the European Commission was right to set price caps on mobile roaming charges. 

The court decided that the EU's roaming regulation was legally sound, fair for protecting consumers and did not infringe the sovereignty of member states, because roaming is a cross-border phenomenon that needed a common response.

"[The] Court ruling is significant because it confirms the Commission's view that legislation of this type was necessary and that the EU was entitled to impose limits on the prices charged by mobile operators for roaming calls in the interest of the EU's Single Market," the Commission said, welcoming the ruling.

Vodafone, Telefónica, Orange, and T-Mobile originally filed a lawsuit at the UK High Court in September 2007, claiming that the EU's roaming regulation was not only too harsh but also did not have a legal basis.

The European Telecommunications and Network Operators (ETNO) Association declined to comment on the decision.

The ECJ's ruling also sets the scene for an EU clampdown on the costs of mobile phone usage, including calls, downloads and texts.

In late May, EU Digital Agenda Commissioner Neelie Kroes heaped criticism on Europe's fragmented telecoms market, accusing firms of failing to meet EU rules aimed at lowering call rates.

"The limited progress towards a true single market is disappointing," Kroes said in a statement aimed at the industry.

In addition to yesterday's ruling, 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 07/06/10).

The Commission also aims to eliminate price differences between national calls and roaming calls by 2015.

Retail mobile prices in some member states differ by up to 20 cents per minute (while calls in Latvia cost four cents, they are 24 cents in Malta), according to statistics from the EU's annual Single European Electronic Communications Market report.

According to Commission figures, mobile roaming charges have now fallen to 38 cents per minute across the bloc, while the average for all mobile phone calls is 13 cents per minute.

"This is a victory for the consumer and a very good decision by the European Court of Justice," said Greens/European Free Alliance MEP Ian Hudghton, president of the Scottish National Party, welcoming today's decision.

"It was clear a number of years ago that some mobile phone operators were intent on charging outrageously high prices for mobile phone use overseas. When they failed to introduce fairer pricing voluntarily, legislation had to follow," Hudghton added.

UK Conservative MEP Giles Chichester also issued a statement praising yesterday's ruling: "This is welcome news, particularly as we approach the summer period when most of us take holidays abroad. The legislation that we passed is designed to ensure an end to 'roaming bill shocks' - where users are charged exorbitant rates for using their mobile phones abroad when either receiving or making calls."

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).

Roaming is when a mobile phone subscriber makes or receives calls on a network outside their home country. Roaming charges are usually higher than for calls made in the home country. 

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