Three: EU data price caps need to be lower

The mobile operator and others are urging minister Ed Vaizey to press for lower wholesale caps for data roaming, saying that proposed EU legislation would still lead to 'prohibitively expensive' charges

Mobile operator Three has called on the government to push for tougher EU rules on data-roaming charges, saying existing proposals will not help people avoid high costs.

In an open letter (PDF) sent on Monday, Three urged culture minister Ed Vaizey to argue for a lower wholesale cap for data roaming than set out in the European Commission's Roaming III proposals. Communications ministers from around the EU will vote on the plan in the next few weeks.

Wholesale prices are what operators pay each other for handling data, and the proposals under discussion will ultimately determine what retail prices consumers pay for using data while travelling.

Three EU data roaming Vaizey

Mobile operator Three and others have written to minister Ed Vaizey to urge him to push for lower wholesale data roaming caps in the EU. Photo credit: David Meyer

"Although the European Commission's 'Roaming III' proposals that are due to be voted on will reduce the cost of data year-on-year, by 2014 they will still see a [retail] rate tantamount to £400 for 1GB of mobile data, compared to UK domestic prices of under £10," Three and the other organisations said in the letter.

Signing the letter alongside Three were consumer group Which?, price comparison site uSwitch, Federation for Small Businesses, the Federation of Communication Services, the Communications Management Association and the International Telecommunications Users Group.

The Commission proposals are intended to give greater transparency of pricing and help eliminate the risk of 'bill shock' for consumers. However, Three says the plan does not go far enough.

"If the maximum amount one operator can charge another at the wholesale level is limited, competition between operators will lead to lower retail prices for consumers," the letter said. "Yet the Commission is proposing a wholesale cap more than 10 times higher than domestic retail prices. This means that if the proposals become reality, using the internet on your mobile phone in Europe could end up costing more than the trip itself."

Three and the others argue that by having such "prohibitively expensive" roaming costs, small businesses and consumers are being hurt the most. In some cases, it prevents some companies from doing business abroad entirely.

"Data usage on mobile devices is exploding, and the Commission's proposals in their current form do not address the demand for data in 2012, never mind 2022. These pricing levels do not encourage competition and hence could put the brakes on growth and competition in the EU," they said in the letter.

MEP amendments

A better idea would be to adopt amendments set out by members of the European Parliament (MEPs), they said. Under current proposals, the wholesale cap would be 30 euro cents per megabyte by July 2012, dropping gradually to 10 cents by 2014. MEPs are looking for an initial price cap of 10 cents, which would be reduced to around 5 cents within three years.

In response, the Department for Culture, Media and Sport (DCMS) said it supports lower wholesale data prices. It stressed that the upcoming Council of Ministers vote will take into account advice from Berec, the group of regulatory agencies from EU member states.

"The UK with other member states is the process of deciding in Council the most appropriate price levels," a spokesman for the DCMS told ZDNet UK. "This process will be influenced by a report from Berec on wholesale roaming costs, which is expected by end of month."

ZDNet UK contacted Orange, T-Mobile, Vodafone and O2 for comment on the issue. None of the operators had replied at the time of writing.

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