EU in new assault on ‘rip-off’ mobile phone charges
Monday, February 11, 2008 15:12
The European Union set mobile phone companies a July deadline on Monday to cut their roaming charges for text messages and Internet use or face regulation.
In frank language, the EU communications commissioner told company chiefs at the industry’s annual trade show that mobile phone companies would not be allowed to “rip off” EU citizens who travel in the 27-member bloc.
After regulating the roaming cost of phone calls, commissioner Viviane Reding has set her sights on the price of SMSs and data transfer, which includes Internet use as well as email and other downloads.
“The deadline is 1 July, and based on the offers on the market on that date we will decide … whether or not further regulation will be required,” she told the Mobile World Congress trade show in Barcelona.
Reding has consistently railed against the cost of roaming in the European Union, which is when subscribers travel to another EU country and use their mobile phones — for which they pay significantly higher tariffs than domestic use.
The European Commission says European consumers have seen the cost of making and receiving calls with their mobile phones abroad in Europe fall by up to 60 percent since an EU regulation forced price caps on mobile operators last year.
The latest proposal puts the EU executive body on another collision course with the industry. The Commission proposes regulations, but they must be ratified by EU member states and the EU parliament.
The head of the mobile phone industry body, the GSM Association, said afterwards that operators would “resist” any attempt to regulate.
“We have a very open and constructive dialogue with the European Commission,” said Rob Conway, chief executive of the association, which represents 700 mobile network operators.
“But we still don’t believe that retail regulation is appropriate and we will resist this regulation.”
The EU regulation on phoning entered into force on 30 June last year, capping prices for dialing out at a maximum 49 euro cents per minute excluding tax.
The price of receiving a call was capped at 24 euro cents per minute excluding tax and the maximum levels will fall later this year and again in 2009.
“Sending text messages or downloading other data via a mobile phone while in another EU country should not be substantially more expensive for a consumer than sending text messages or downloading data at home,” Reding said Monday.
She stressed that the EU “cannot accept that mobile operators make up to 20 times more profits on roaming customers than on their domestic customers.”
The retail price for sending a text message abroad should be only 2 or 3 cents more expensive than sending an SMS domestically, she said.
For data transfer, she said that wholesale rates — the rate at which operators charge each other — had fallen in some cases to 50 or even 25 cents per megabyte.
“They indicate the level at which the Commission could consider pitching regulation,” she said.
The average cost to the consumer of downloading 1 megabyte via a mobile phone while abroad is 5.24 euros and reaches 11 euros in Poland and Luxembourg, she said.
Reding said the European Union project aimed to increase the mobility of EU citizens.
“The EU cannot at the same time allow the mobile phone industry to rip off mobile customers who make use of these freedoms,” she said.
