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EU acts to slash sky-high mobile roaming charges

Posted by inet - 2006-07-15

The European Commission unveiled plans to slash skyhigh costs for making mobile phone calls abroad defying fierce opposition from the telecoms industry.
The clampdown agreed by the commission at a weekly meeting aims to halve socalled "roaming rates" which companies impose on consumers using their mobile phones when outside their home country.

"For years mobile roaming charges have remained at unjustifiably high levels in spite of repeated warnings to the industry" said Information Society and Media Commissioner Viviane Reding.

"This is why Europe needs to act now."

Under the plans the commission which is giving operators six months to take action themselves before facing enforced measures will fix the wholesale rate that an operator can charge a foreign rival that uses its network.

It would also cap the retail rates that companies can impose as well as the cost of calls received abroad. Reding lamented that prices for roaming calls can be up to six times the equivalent for someone using a local mobile phone.

Consumers groups immediately hailed the EU plans. "Can a leopard change its spots? Perhaps but it certainly helps to have a gun ready" said the European Consumers' Organisation BEUC.

"The proposed regulation is a good first step in addressing consumer concerns in mobile communications markets. But we will remain vigilant" said BEUC chief Jim Murray.

But industry officials were less impressed.

"The Commission's plan to introduce a rigid cap on retail prices on each and every minute of a roaming call will stifle competition" said the GSM Association (GSMA) the global trade association for mobile operators.

The roaming crackdown is a flagship policy for Reding and her quest to push mobile phone calls down has already forced changes among telecoms operators.

EU commission chief Jose Manuel Barroso stressed that the move was good news for ordinary Europeans a positive message at a time when the EU is mired in unprecedented gloom following the rejection of its constitution last year.

"Consumers have waited too long to see the tangible benefits of the market in this area" he said. "We have no alternative but to intervene to protect their interests."

Reding wants the new regulations to be in place next year although some commissioners say they should be phased in over several years.

In any case operators still have some time to adjust because the plans require approval by the European Parliament and EU governments to go into effect.

With million Europeans using roaming services the market is estimated to be worth about . billion euros a year.

Although Reding has decided to go ahead with the measures in the teeth of resistance from operators and even some national responses she has watered down the new regulations.

In particular she has dropped plans for a socalled countryoforigin principle under which a Frenchman for example on a trip in Berlin would pay a local rate if he called a taxi with his mobile phone.

Critics warned that the rule could have encouraged consumers to import SIM cards which inserted into a mobile phone manage which networks the caller can use and at what price from countries with the lowest rates.

Reding denied that the final version of her plans amounted to caving in to the telecoms industry.

"The market has had its chance. It did not deliver. We believe that European citizens should no longer put up with these unjustifiably high prices" she told reporters.

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