MEPs back cheaper international mobile fees

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A key committee in the Parliament backed a proposal, on 12 April, to slash costs for mobile phone customers using their handsets in other EU countries and to make the cheaper rates apply automatically to all users.

  • Cheaper cross-border calls… 

The Parliament’s 54-member Industry, Research and Energy Committee (ITRE), on 12 April, backed a report, drafted by Austrian MEP Paul Rübig, calling for roaming charges to be capped at a maximum €0.40 for outgoing calls, and €0.15 for incoming calls (plus value-added tax). 

This goes further than what was proposed by the Council, i.e. a cap of €0.50 for outgoing calls and €0.25 for incoming calls – figures which were supported by another Parliament Committee (Internal Market and Consumer Protection Committee or IMCO) in March. 

  • …for everyone… 

The ITRE Committee voted that all European mobile phone users should automatically benefit from the new regulated charges when using their handsets abroad. Customers may also decide to move to cheaper packages offered by other mobile operators (‘opt out-system’). 

This vote reveals a split in Parliament, after the IMCO Committee, in March (EURACTIV 23/03/07), backed a proposal that would have made the cheaper roaming tariffs available only for those who explicitly told their operators that they wanted the new rates (‘opt-in’ mechanism). 

  • …as of next summer? 

The Commission is keen to implement the rules by July 2007. But Parliament and member states must first agree on all details of the rules, including the exact tariff caps and who they should apply to. Disagreements could lead to the legislative procedure being extended by anything from a few months to a year. 

The GSM Association (GSMA), which represents mobile operators, warned of "serious harm" to the industry should the low roaming caps be enacted. It said that caps at the levels proposed by the Parliament’s Industry Committee would give mobile operators no scope to compete with each other and force them to apply tariffs that are below costs. Instead, the association calls for caps of at least €0.65 for making calls and €0.35 for receiving calls, adding: “At a time when Europe is trying to stimulate investment and innovation, these inappropriate and inconsistent proposals are becoming increasingly removed from the economic realities of the mobile market.” 

EU Information Society Commissioner Viviane Reding welcomed the decision to introduce automatic price protection for all roaming users saying: “This is the solution also favoured by the Commission, as it is easy to handle and avoids red tape both for consumers and for operators. It also means that mobile operators will now have to convince consumers that they offer an even better package than prescribed by the new EU roaming rules. This is a strong incentive for more competition among mobile operators.” 

Austrian MEP Paul Rübig (EPP-ED), ‘rapporteur’ on roaming in the Industry Committee, hailed the introduction of price caps as “a major success for European consumers”, but added: "Nevertheless I am less happy with the decision of the committee to vote for an automatic opt-out tariff for all mobile phone contracts. This amounts to forcing all consumers into a new tariff model, which might lead to drastically increased costs for the industry. Personally I would have favoured a voluntary opt-in model, as I am convinced that European consumers are responsible and mature enough to make up their minds on their own." 

But, Reino Paasilinna, Socialist Group ‘shadow rapporteur' on the issue said: "The 'opt out' will automatically ensure all consumers' roaming charges are capped far below what most consumers are currently paying, but with a choice to shop around if consumers prefer a different package. It will also provide an incentive for operators to offer better deals." 

Greens/EFA shadow rapporteur David Hammerstein welcomed the Industry Committee’s rejection of the 'opt in' system: “This '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.” But he regretted that the Committee had supported the proposal for a 'sunset clause' under which the regulation would expire after three years, unless the Commission proposes its extension. 

BEUC, the European Consumers' Organisation said the vote was “a step in the right direction”, but pointed to some “still unsatisfactory results”, including the fact that the legislation would expire after three years and that the price caps are still too high and do not reflect the real costs. 

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. 

Thanks to these unjustifiably high fees, mobile operators have been reaping in an estimated €8.5 billion per year. 

At the start of the 2006 holiday season, the Telecoms Commissioner Viviane Reding presented draft regulation to introduce a cap on such charges, which currently range from €0.58 to €5 per minute. 

  • 9 May 2007: Vote in full Parliament 
  • 6 June 2007: EU telecoms ministers expected to vote on the proposal

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