Regulators won't act over retail roaming charges

Roaming Rip-Offs: European regulators say that market pressure on mobile companies is enough to keep prices in check, a view that isn't shared by the European Commission

European telecoms regulators are continuing to argue that no intervention is necessary to curb retail mobile roaming prices, a policy that appears to put them at odds with the European Commission.

The European Regulatory Group announced on Thursday that it will continue to argue against intervention over the extortionate price of data roaming while travelling overseas. However, it does think that intervention on wholesale pricing is necessary.

European Commissioner Viviane Reding recently announced plans to impose regulation on the amount that mobile network operators can charge customers for using phone abroad. This was closely followed by an announcement from the ERG that it "agreed that regulation was necessary".

The ERG, which includes Ofcom in its membership, has continued to welcome Reding's intervention in the market but with the proviso that any regulation should be focused on wholesale charges — the charges operators charge each other for carrying international calls — and not on regulation of the retail market for mobile services.

In April, the EC published detailed proposals for mobile regulation that included proposals for wholesale and retail regulation. The industry and the regulators are contesting the need to regulate the retail sector. Ofcom, for example, continues to argue that the market for mobile roaming while abroad — which can be as high as £12 for downloading one megabyte of data (the equivalent of viewing 10 Web pages on a laptop equipped with a datacard) — does not need any regulation as Ofcom does not believe in "regulation in a market in its early stages".

ERG chairman Kip Meek, who is also a senior partner at Ofcom, agrees that charges for roaming in Europe need to come down.

"Mobile roaming charges are simply too high and do not currently represent a fair deal between the customer and the operator," Meek said in a statement.

As a result, the ERG's intention is to impose a single European-wide price cap on wholesale roaming charges which will be set at about €0.30, as opposed to the current average level of about €0.75. The group will also set-up and maintain an up-to-date index of retail international roaming charges.

According to the ERG, this would "clearly show whether or not the reduction on wholesale costs has resulted in savings for consumers".

The announcement by the ERG follows a series of announcements from various mobile operators claiming to lower the cost of roaming. On Friday, O2 became the latest company to say it was introducing lower roaming costs on the back of similar announcements from Orange, T-Mobile and Vodafone.

Thurday's announcement by the ERG that it was moved to continue its insistence on lower costs for wholesale prices — a position supported by the mobile companies — did little to stem the impression that the regulator and the suppliers are acting in concert to try and head-off any intervention by Commissioner Reding in the retail market.

The announcement by the ERG also said that "the Spanish member of ERG (CMT) has stated that it is unable to subscribe to this response". Spain is the home of Telefonica, which recently bought O2.