Vodafone has asked European regulators to stop forcing operators to cut their prices for roaming services and mobile termination, prompting an angry response from the European Commission.
At Mobile World Congress on Monday, Vodafone chief Vittorio Colao called for a "moratorium on regulation", arguing that regulation causes operators to cut investment and stunts job creation.
"Does Europe need employment or does Europe need rate cuts? We should stop having this continuous intervention on prices and let the industry reinvest the money," Colao said, according to a report in the Guardian.
"Regulators should stop cutting mobile termination rates, pushing down roaming prices, building funny auctions which are designed to extract more money from existing operators, and resisting industry consolidation," Colao added. "This is not a request for a moratorium on competition but a much stronger request for a moratorium on regulation."
The European Commission's digital agenda commissioner, Neelie Kroes, who is overseeing plans to drastically lower the cost of using mobile data while roaming internationally, responded by characterising Colao's words as a threat.
"Message to Vittorio and Vodafone: I call your bluff, and indeed do not respond well to threats," Kroes said in a statement. "I take the side of the Vodafone customer. And I remind everyone that we want to get the mobile sector more spectrum and a bigger market."
"A fair competition in roaming is a good exchange for those opportunities. Remember, if consumers lose their fear of using their smartphones and tablets when travelling across Europe, operators will benefit as well," Kroes noted.
The roaming issue is set to come to head within the next month, when communications ministers from across Europe vote on the Commission's proposals.
A letter sent on Friday from the European regulatory body BEREC to a European Parliament committee — and leaked this week — showed that the regulators want the maximum rate for roaming data set even lower than the Commission is proposing.
The Commission, which is aiming for roaming not to cost the customer more than the operator pays to provide it, wants a maximum rate of six euro cents per megabyte. BEREC said the real costs were below five cents per megabyte.
Bengt Beier, the coordinator of the Europeans for Fair Roaming group, said the leaked letter backed up his organisation's own call for the EC-proposed cap to be roughly halved.
"There is no reason why consumers should pay up to €200 [£170] per gigabyte for using their internet when abroad. The same service costs only a fraction of that at home," Beier said in a statement.
Meanwhile, EC-mandated cuts in mobile termination rates — what operators charge each other to connect cross-network calls — have already brought down the cost of calling mobiles from landlines in the UK. Vodafone and Orange responded by raising their pay-as-you-go prices to keep their profits up.
As for the UK's auction of spectrum for 4G services, the regulator Ofcom is hoping that recent revisions it has made to its proposed auction scheme will clear the legal deadlock that has delayed a UK 4G rollout for years.