France Telecom threatens EC over roaming clampdown

Roaming Rip-offs: EC dismisses suggestion that European telecoms manufacturers might suffer unless it backs down

France Telecom has warned that it might stop buying equipment from European manufacturers unless the EC's proposals on mobile roaming regulation are toned down.

Didier Lombard, chief executive of France Telecom, said that the EC's proposals were reminiscent of Communist governments in Eastern Europe. In an interview with the Financial Times, Lombard said that telcos could start placing more orders for telecoms equipment with Asian companies, whose prices are typically cheaper.

"We will adapt to the situation, which means the telecoms sector as a whole will suffer," Lombard told the FT. "All the European manufacturers will be impacted." Such a move could potenially cost European jobs.

The EC is pushing for dramatic cuts in the roaming rates which travellers must pay when they use mobile voice or data services abroad. Commissioner Viviane Reding is calling for cuts of up to 70 percent. Last week, a meeting of national ministers approved large cuts in wholesale rates -- which operators charge each other.

The industry, with the apparent support of the French and UK governments, is fighting Reding's proposal to limit retail pricing at no more than 30 percent about the wholesale rate.

Martin Selmayr, spokesman for Commissioner Reding, responded to Lombard's claims on Tuesday by suggesting there was no obvious link between mobile roaming regulation and France Telecom's choice of manufacturers.

Selmayr also hinted that that may be competition problems within the French mobile market which need addressing.

"We understand that the French competition authorities have been looking to the French mobile phone market and have some interesting findings on that," he said.