EU slashes mobile roaming charges

12-07-2006

by Maxim Kelly

The European Commission fired a shot across the bows of mobile phone operators on Wednesday with proposals to cap mobile roaming charges.

The Commission's legislative proposals aim to cut the cost of using a mobile phone abroad by up to 70 percent. The Commission had initially planned to abolish roaming charges altogether, but these plans were watered down due to opposition from commissioners and mobile industry lobbyists.

Under the proposed legislation, wholesale costs -- the fees mobile operators pay one another for processing roaming calls -- will be capped. The EU will annually review an average of this value in order to set the cap. Then, the mark-up at retail will be limited to 30 percent. The caps will apply to calls both made and received while abroad.

Mobile phone companies will now have a six-month grace period to introduce limits on retail tariffs for calls made abroad before the Commission obligates them to do so.

Commission President Jose Manuel Barroso told reporters at a news conference that the mobile phone industry now had "a final chance to show they are serious about self-regulation".

EU Information Society Commissioner Viviane Reding, who drafted the proposed European legislation on roaming rates, said that mobile phone roaming charges were "one of the last borders within Europe's internal market."

"For years, mobile roaming charges have remained at unjustifiably high levels, in spite of repeated warnings to the industry," she said. "I am convinced reducing roaming charges will not only be beneficial for citizens travelling within the EU, but will also enhance the competitiveness of Europe's industry."

In Ireland, meanwhile, the Labour Party welcomed the Commission's plan to end the "cosy cartel" of mobile operators who were "fleecing" customers for using their phones abroad.

"It is a source of national shame that our own commissioner, Charlie McCreevy, opposed this plan tooth and nail. He and a small band of other commissioners have sought to have these proposals watered-down and want them introduced on a phased basis rather than straight away," said Labour's communications spokesman Tommy Broughan.

"Irish customers who travel regularly to other Member States, or who live in the border region, know all too well the financial implications of finding oneself on a foreign network. I welcome the fact that, finally, a small step has been taken that sees customer benefit as opposed to the operator," said Deputy Broughan.

In a statement, Communications Minister Noel Dempsey said he welcomed Commissioner Reding's plans to tackle the charges.

"We will study the detailed proposal and look forward to the negotiating a successful conclusion with our EU colleagues. Regarding the scope of the draft regulation, we believe it should address roaming charges for voice, data and text (SMS). The regulation should also ensure that pre-pay customers are treated no less favourably than post-paid customers."

The Minister said the roaming proposals were a good example of how the EU can make a difference to the lives of EU citizens, and added that there was no technical reason why the new cross-border and inter-island roaming agreements between Ireland and Britain could not be extended across the European Union.