Mobile operators deceitful on charges, says EU consumer group

Mobile phone operators could easily afford to lower roaming charges to less than what the Commission is asking for, but are engaged in large-scale collusion to keep prices up, according to BEUC, Europe’s consumer watchdog.

Mobile phone operators are “twisting the truth” when they claim to have cut the price of making phone calls abroad, according to a study on roaming charges published on 20 February 2007 by the European Consumer Organisation (BEUC) and French consumer group UFC-Que Choisir. 

Cell-phone companies have been fighting a Commission legislative proposal to impose a cap on roaming charges, arguing that prices already fell by 25% in 2006 thanks to the numerous promotions and innovative tariff plans. 

Tom Phillips, Chief Government and Regulatory Affairs Officer at GSM Europe, which represents large EU telecom companies, said: “These price declines are in line with the objective of the European Commission to cut the price of roaming calls, proving that regulation, especially of the retail market, is unnecessary.” 

But, the BEUC study accuses large mobile phone companies, including Vodafone, T-Mobile and Orange, of misleading consumers with their offers, which, in fact, do “nothing to lower prices” for the average user. “Operators promote various ‘bundled’ offers or ‘plans’ but these are very complex, difficult to use, and have no appreciable effect on charges overall. Their main function is as a smokescreen,” said BEUC Director Jim Murray

President of UFC-Que Choisir Alain Bazot added: “Mobile phone operators are twisting the truth. From the beginning they have organised collusion on a massive scale throughout Europe.” 

According to Commission figures, the average retail charge of a call made abroad is currently around €1.15 per minute. The Commission is proposing a maximum charge of 49 cents per minute, claiming that the actual costs to mobile operators to connect a roaming call are only 10 to 12 cents a minute (EURACTIV 13/07/06). 

But, according to Murray, “the actual costs to operators can hardly be more than five or six cents and can be much less.” “Nobody should have to pay more than 33 cents per minute,” the study concludes, adding that such price cuts will stimulate the use of telecom services and are indeed “the best way to guarantee a healthy European telecom sector.” 

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