Why pay more abroad? EU demands mobile roaming cuts

Mobile World Congress 2008: Reding threatens regulation

Mobile World Congress 2008: Reding threatens regulation

The European Union (EU) has threatened to introduce regulation if mobile operators fail to bring down mobile data roaming costs voluntarily by July this year.

EU commissioner for information society and media, Viviane Reding, speaking today at the Mobile World Congress trade show in Barcelona, said: "What I want to achieve is very simple - that sending a text message or downloading other data via a mobile phone while in another EU country should not be substantially more expensive for a consumer than sending a text message or downloading data at home."

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Reding added: "We would like consumers to feel at ease wherever they are - if they are abroad for tourism or if they are abroad for business."

The commissioner said she is asking for "a credible but also doable price reduction by the whole industry on a voluntary basis before 1 July" - both at the wholesale and the retail level. Higher roaming charges abroad will have to be just or "they will have to disappear", she added.

The cost of sending a text message abroad should be brought down to the cost of sending a text at home plus the "very small marginal cost" for operators of using another operator's network abroad, according to Reding.

The EU also wants all mobile operators to offer "at least one interesting EU roaming package" that allows consumers to download data in 27 EU countries at the same price as they can at home "subject only to a single competitive additional charge".

Reding admitted the data roaming market is still "young and developing" and that regulators should not interfere too much and just give "general direction". But she warned the EU would consider stepping in with regulation if the mobile industry failed to act on the "transparency" of roaming rates before 1 July.

Reding said: "Consumers should be warned by appropriate mechanisms so they no longer risk receiving shock bills of several thousand euros."

On wholesale tariffs, she pointed out costs per megabyte can be as high as €7 and as low as 25 euro cents, adding "there really is room for manoeuvre". Therefore, she said if there is not a "credible" voluntary reduction of wholesale tariffs over the whole industry the EC may be forced to step in.

On 1 July - the day of truth for data-roaming rates in Europe - Reding said she will take stock of the existing prices and publish them on a website, adding that the commission will be ready to step in with regulation should it be necessary. "I am confident that the industry will be ready before we have to put a regulation on the table," she said.

She added: "The industry, if it wants, will be capable of doing this - and this will also boost data roaming in Europe which is being held back for the time being due to too high cost to the consumer. So really if we want to achieve... a real move from the PC internet to the mobile internet then this has to be done."