Parliament adopts new phone call price curbs

Using a mobile phone to send text messages or surf the Web by laptop will become up to 60 percent cheaper while travelling in the European Union under price curbs adopted by the European Parliament yesterday (22 April).

The caps take effect in July and are being adopted rapidly as EU parliamentarians, facing elections in June, want to show how the bloc can make a positive difference to the daily lives of its nearly 500 million inhabitants.

EU regulators and the executive European Commission want to end “bill shocks”, whereby business travellers or holidaymakers return home to huge charges for checking emails or surfing the Web while away.

Operators will be allowed to charge customers a maximum of €11 cents per roamed text message (SMS), excluding sales tax, compared with current prices of about €28 cents.

Downloading data while roaming will cost a maximum of €1 per megabyte at the wholesale level, falling to €80 cents per megabyte from July 2010 and €50 cents per megabyte from July 2011. The current average wholesale price is about €1.68 per megabyte, with peaks in Ireland (€6.82), Greece (€5.30) and Estonia (€5.10).

Moreover, roaming customers would be able to opt free of charge for a maximum financial limit from March 2010. Providers will have to warn their customers when 80% of the agreed limit has been reached. Once the limit is reached, another notification should be sent, indicating the procedure to be followed if the customer wishes to continue data roaming. If the user does not respond, the provider should cease all data roaming services.

Previous legislation had left out text messaging and data downloading, like checking emails on a laptop or mobile phone while outside a home state.

Roamed voice calls

The new legislation will extend by three years to 2012 price caps that were introduced in 2007 on roamed voice calls – or when mobile phone users make or receive calls outside their home state in the EU.

The text stipulates that home operators may charge their customers for outgoing roaming phone calls:

  • From July 2009: a maximum of €43 cents per minute (excluding VAT);
  • from July 2010: a maximum of €39 cents per minute (excluding VAT), and;
  • from July 2011: a maximum of €35 cents per minute (excluding VAT).

For incoming roaming phone calls, home operators may charge their customers:

  • From July 2009: a maximum of €19 cents per minute (excluding VAT);
  • from July 2010: a maximum of €15 cents per minute (excluding VAT), and;
  • from July 2011: a maximum of €11 cents per minute (excluding VAT).

Per-second billing after 30 seconds

Nevertheless, the text allows operators to impose an initial charging period of 30 seconds, after which the per-second system will be applied. This means that if an operator wants to use this advantage, a roamed phone call lasting 15, three or 27 seconds will always be charged as though it had lasted 30 seconds.

According to the Commission, consumers are at present paying around 20% more than the time they actually consume when making or receiving calls.

The European Parliament and EU states reached an informal deal last month, which the Parliament adopted into law yesterday (EURACTIV 25/03/2009).

Parliament voted 646 in favour and 22 against. EU states are expected to give their formal endorsement to the legislation in the coming weeks.

(EURACTIV with Reuters.)

"I welcome the strong support the European Parliament has today given the Commission's proposal for creating a single telecoms markets for all Europeans, whether they are crossing a border as tourists or as business travellers," said José Manuel Barroso, president of the European Commission

"After this vote, Europe is now clearly the most attractive continent in the world for mobile phone users. I expect this to translate very swiftly into even stronger growth for mobile data services in the EU," Barroso said.

EU Commissioner for Information Society and Media Viviane Reding 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."

"I very much hope that the mobile industry will understand this message. The ball is now in their court if they want to show that there can be healthy competition in the roaming market. The best proof of this would be if attractive voice and data roaming packages appear on the market very soon," Reding added.

The GSM Association, which represents major mobile operators, has said the latest measures are unnecessary and that data prices are already falling.

Monique Goyens, director-general of BEUC, the European consumer organisation, welcomed the Parliament's move. 

"The European Parliament has ensured that consumers enjoying a holiday abroad this summer will not be shocked by extortionate phone bills when they return home, and this is to be warmly welcomed. Using your mobile phone abroad should not cost much more then using it in our own country: it is the same technology and in many instances even the same company," she stated. 

"Concerning data roaming, we will closely monitor if the reduction of the wholesale price leads to competition and better prices for consumer. In any case, we will be back for the review of the regulation in 2011," Goyens said.

Romanian MEP Adina Valean (ALDE) stressed that "failures in this market created a real need for regulation, but I am also looking forward to increased competition as well as the review we have called for seeking alternative options for regulating roaming services in the future".

"All mobile users will now have clearer information about the costs of roaming whilst those users who simply send text messages when abroad will no longer pay over the odds,” said UK MEP Giles Chichester (EPP-ED)

"We have sought to place price transparency above price capping, which will enable users who download data abroad to bring the prices down organically in a market that is yet to fully develop," he added.

UK MEP Syed Kamall (EPP-ED) said: "Consumers have a right to know the bill they are running up. Too often we see stories of people downloading videos on their phones whilst on holiday, only to find it has cost thousands of pounds. These plans will put an end to 'bill shock' by ensuring users are aware of the charges and prompting them when a limit is reached." 

"In a relatively new market like mobile data downloads it is important that we do not regulate heavily. These proposals will empower consumers without interfering with the development of this new market," Kamall added.

"We have seen to it that cheaper mobile phone calls and texts will come into force in time for this summer's holiday”, said Finnish MEP Reino Paasilinna (PSE). "The prices will start dropping from 1st July, providing real savings for holidaymakers." 

"Socialists have defended the rights of consumers, while allowing the telecoms companies to continue to make a reasonable profit from both their wholesale and retail charges. We would like to go further but our compromise will help consumers by a long way. In the long run, we must also tackle overcharging for data roaming. Many EU citizens would expect to access the Internet on holiday, and they should not pay a ridiculously high charge for this," he added. 

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 under the 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 further lower voice roaming fees and to voluntarily cut tariffs for both texts and data sent abroad (EURACTIV 12/02/08).

Faced with industry resistance, she proposed in September to cap phone calls prices to €34 cents per minute and text messages to €11 cents (VAT excluded). Reding also stepped up warnings to mobile Internet users against the risk of so-called 'bill shocks' (EURACTIV 24/09/08).

The EU's telecoms market amounts to 500 million potential users of fixed and mobile telephony, Internet broadband and mobile data services. 

  • In coming weeks: EU states expected to give their formal endorsement to the roaming regulation.
  • 1 July 2009: New rules to enter into force.
  • Mid-2011: Commission to review the regulation.
  • 30 June 2012: Regulation expires. 

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