Out-Law / Your Daily Need-To-Know
The European Commission yesterday expressed exasperation at the failure of mobile phone companies to voluntarily reduce the cost of international roaming charges. It plans to put forward a Regulation to tackle the problem.
International roaming allows mobile phone users to make and receive calls and text messages while travelling abroad. Each nationally-based mobile operator has established agreements with overseas networks that allow its customers to use their mobile phones in many countries around the world, providing their handset is compatible with those networks.
But consumers and regulators have long complained that the charges imposed for international roaming are excessively high. The Commission agrees.
“It is high time that the EU’s internal market delivered substantially lower communication charges for consumers and business people travelling abroad”, said Information Society and Media Commissioner Viviane Reding. “A mobile phone customer should not be charged a higher tariff just because he is travelling abroad.”
In October 2005 the Commission called on operators to reduce their charges, and set up a website showing the cost of various cross-border mobile phone calls. Six months later, it has updated the website, revealing that the price for a standard four-minute call has generally remained at the same high level and in some cases has increased.
The site shows that in the UK, one operator has increased the price for roaming from €3.45 to €4.92 when consumers call home across the EU, while Lithuanian customers pay between €4.41 and €12.08 for a four minute call from France.
According to the Commission, special roaming packages offered by some operators have not been widely taken up by consumers since most of these tariffs are offered on an opt-in basis or may have an additional monthly charge attached to them.
It reveals that only in a few exceptional cases has some progress been made. An operator in Belgium has introduced a flat rate for roaming which has brought down the price from €7.20 to €4.40 for a call home while roaming in Cyprus. In Ireland, the Commission’s first announcement of regulatory measures on roaming was followed by the elimination by several operators of roaming charges for travellers to the UK.
The Commission is therefore working on a proposal for an EU Regulation to bring down international roaming charges on the basis of internal market principles. The main elements of the proposal are:
- The new Regulation should address inter-operator tariffs (wholesale prices). It should ensure that operators do not charge operators from other countries substantially more than the actual cost.
- To ensure that operator savings at the wholesale level are actually passed on to the consumer, the Commission sees also a need for regulation at the retail level.
- It could in particular eliminate all roaming charges for receiving a call when travelling abroad in the EU.
- In addition, for calls made while travelling abroad in the EU, the new Regulation could introduce the “home pricing” principle. A mobile customer travelling abroad in the EU would always be charged only the prices that he is used to paying in his country of residence: he would either pay a local tariff when making a local call, regardless of where he is travelling in the EU (e.g. for calling a cab while travelling in Madrid); or a normal international tariff for calls made to EU destinations, regardless of where he is travelling in the EU (e.g. for calling the family back home while on holidays).
The Commission has already consulted on what form the Regulation should take, and plans to launch the second phase of its consultation on 3rd April. This will be open to all interested parties until 28th April 2006. The Commission then aims to formally propose a Regulation to the European Parliament and Council by the end of June.
Mobile phone trade associations are unhappy with the proposals. According to the GSM Association (the GSMA), they are unprecedented, unnecessary and heavy-handed.
“Enabling consumers to use their mobile phones on a pan-European basis is a value-added service and mobile operators should be able to charge a market-rate for this service,” said Rob Conway, CEO of the GSMA and member of the board. “Moreover, it is inappropriate to regulate tariffs at a pan-European level as the commercial and regulatory factors in each national market are different.”
The GSMA also believes that the European Commission’s proposed consultation period of 18 working days is inadequate and falls well short of the Commission’s own internal requirement of eight weeks.
According to Michael Bartholomew, Director of the European Telecommunications Network Operators Association (ETNO), “Such a heavy intervention, at both the wholesale and retail levels, would be unprecedented in the mobile market and appears disproportionate. It risks hampering competitiveness of the industry.”
