EC calls for 60 percent cut in roaming charges

The European Commissioner responsible for telecoms today promised her long awaited shake-up in the structure of mobile roaming charges that if implemented could see costs reduced by as much as 60 percent overall.

Viviane Reding, the EU commissioner for the information society and media, said in "it is high time that the EU's internal market delivered substantially lower communication charges for consumers and business people travelling abroad. I therefore propose that an EU regulation be used to eliminate all unjustified roaming charges".

In a statement on the Commission's Web site, which was set up to monitor the high cost of mobile roaming, Reding made it clear that the Commission intended to act on the principle that, "a mobile phone customer should not be charged a higher tariff just because he is travelling abroad."

Backing up Reding's remarks, the European Regulators Group (ERG), which includes Ofcom as a member, said that the high cost of mobile roaming had "for some time been a source of concern to European authorities" but that it had proven "difficult to deal with the specific competition problems related to international roaming under the existing EU Framework".

The ERG proposes that a single Europe-wide cap on wholesale roaming charges should be applied and suggests that one mechanism for setting the cap under consideration would "lead to reductions in average wholesale roaming charges of around 60 percent".

Such a proposal would send shockwaves through the industry with some vendors already setting their stall out to oppose any intervention on the issue from Europe.

Vodafone is one vendor that has said it would oppose any intervention from Europe as necessary. A spokesman for the company told BBC news that prices for roaming while abroad are "dropping all the time".

But Reding's site points out that some suppliers are continuing to put prices up. According to a statement on the site, "one U.K. operator has increased the price for roaming from €3.45 (US$4.16) to €4.92 (US$5.93) when consumers call home across the EU".

While Reding does not name any company specifically, ZDNet UK believes this was a reference to O2, which has put up its prices on some of its calls by more than a Euro. A call to Italy increases from €3.45 (US$4.16) to €4.93 (US$5.94) for example. O2 was acquired last year by Spain's Telefonica and some prices from Telefónica's subsidiary have likewise increased.

There are four main strands to Reding's proposals:

• The EU regulation would ensure that operators do not charge operators from other countries substantially more than the actual cost.
• Operator savings at the wholesale level will be passed on to the consumer, so the Commission sees also a need for regulation at the retail level.
• The new EU regulation should eliminate all roaming charges for receiving a call when travelling abroad in the EU.
• Calls made while travelling abroad in the EU should be on the "home pricing" principle. So "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."