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Operators call foul on EU roaming charge initiative

Roaming Rip-Offs: Mobile providers have reacted badly to the EU's decision to move forward with legislation to cap roaming charges
Written by Colin Barker, Contributor

Tuesday's decision by the EU to bring out legislation forcing mobile companies to slash roaming charges has drawn fire from the industry which is vowing to fight the proposals tooth and nail.

The EU put forward its propoal, through the European Regulators Group (ERG), that a single Europe-wide cap on wholesale roaming charges should be applied and suggested that this would "lead to reductions in average wholesale roaming charges of around 60 percent".

The proposals will go into a short consultation period (3 April to 28 April) before the legislation is published this summer with the aim of introducing the final regulations in summer 2007. Mobile companies in Europe are taking issue with the commissioner responsible for the move, Viviane Reding, on the size of the cuts, the scope of the legislation and the process of introducing the legislation, which, they claim, is flawed.

As the largest mobile operator in Europe, Vodafone has the most to lose from the EU's move. Phil Kirby, the director of regulatory affairs at Vodafone, accused Reding and her department of being "less well informed than we think they should be".

The EU's Web site site for monitoring the cost of roaming in European countries, quoted the wrong prices for Vodafone and others. "It takes no account of the Vodafone Passport scheme [introduced in July 2005] which is entirely free to use and is available for all our customers. That cuts the price by 30 percent for account customers and 45 percent for those on pre-pay," he said.

Kirby further criticised the EU's methodology. "They don't have enough facts to draw the conclusions they are drawing," he said. "They had some consultation last Tuesday. We know the input they have had from most of the organisations who contributed and nobody who commented actually proposed what the Commissioner had now proposed."

The consultation period was a sham, Kirby believes, and the commissioner had already decided on the outcome before the event.

The idea that the commission is set on the path of cutting the costs for roaming abroad, before it has even started its consultation period, is a view shared by analyst group Ovum.

"We expect the industry to react strongly and challenge this decision, which could take away pretty much all their roaming revenues," said senior analyst, Stefano Nicoletti, "but it now seems that everything has been decided — it might be too late!"

Other mobile companies share Vodafone's worries about the prospect of legislation being enacted next year. O2 was singled out by Reding after she claimed the UK company had increased its prices by around €1 a call, since the last time the EU published a list.

"The prices on the EU Web site don't take account of our International Traveller Service," an O2 spokesperson told ZDNet UK. "This O2 savings scheme is now used by most people and it cuts roaming charges by between 30 and 70 percent. Around 70 percent of our roaming calls are made by customers using International Traveller Service."

Other operators were less keen to comment on the findings. In a statement, Orange said that it "remains focused on providing our customers with transparent pricing, convenience and quality whether they are at home or abroad". The company added that it is "currently studying the EC's proposal for further regulation of the telecoms industry and will provide a detailed response in the coming days".

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