EC to clamp down on mobile roaming charges

According to 'Super Mario' Monti, the EC competition commissioner, mobile phone users are exploited when they use their handsets abroad

The European Commission is planning to take action against some mobile phone network operators over the prices consumers are being charged to use their mobile phones when abroad.

EU Competition Commissioner Mario Monti said on Tuesday that he is concerned the international roaming charges levied by mobile operators are a rip off. He promised that steps would be taken against such companies this year.

"The Commission's sector inquiry into international roaming prices has shown that mobile operators may be engaged in excessive pricing. We have narrowed down our investigations to a number of Member States where the situation is the most serious and intend to take concrete action this year, so that consumers will not be exploited when using their mobile telephones abroad," Monti said in a speech to mark European Competition Day.

Operators in several European countries, including the UK, were raided by EU competition investigators last year. It is unclear which countries the EU is most concerned about at this stage.

International roaming fees will become increasingly important for the technology sector once 3G phones come onto the market. There are some concerns that it may be prohibitively expensive to surf the Internet or carry out a video call with a smartphone while abroad, because the data transfer costs could be hiked up for customers roaming on another network.

This problem may be alleviated in situations where a mobile operator runs 3G networks in several countries. For example, mmO2 (previously known as BT Cellnet), successfully bid for 3G licences in the UK, the Netherlands, and Germany.

Monti also said he was concerned about the amount it costs to call a mobile phone from a fixed line, or another mobile on a different network, and promised that this would be addressed too.

"Mobile termination rates are also an area of concern: as these wholesale rates are not visible to consumers -- neither the caller nor the person called is aware of the rates being charged for termination -- there is scope for mobile operators to charge excessive prices without being 'caught'. Also here investigations are progressing as a priority and I hope to be able to announce concrete steps before the summer," he said.

This issue is already in the hands of the UK's Competition Commission. Oftel recommended last year that termination charges -- the amount that mobile operators charge each other and fixed-line operators whenever one of their subscribers receive a call from another network -- should be capped.

"We looked at the prices that mobile operators were charging to receive calls from other mobile networks and fixed-line phones, and found they were charging way over cost," an Oftel spokesman explained.

Oftel recommended that termination prices drop by 12 percent over four years, after taking the retail price index into account. A ruling may not be announced until the end of this year.

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