MILLIONS OF mobile phone users will benefit from lower “roaming” fees when travelling in Europe after the European Commission moved to eliminate what it described as “outrageous” profiteering by telecom operators.
The plan will trim the cost of logging on to the internet by phone when abroad and it will provide phone users with the option to alternate between domestic and roaming services for the first time.
According to EU digital agenda commissioner Neelie Kroes, the measures are potentially as significant as the liberalisation of the air travel market in the 1990s.
The plan, binding on phone companies, is designed to prevent “roaming rip-offs” when mobile phone users make or receive calls when abroad and send or receive text messages. It also aims to cut the cost of expensive “data” services when travelling, long a bone of contention with smartphone users.
“A mobile should be mobile,” Ms Kroes told reporters in Brussels, “but many people currently switch off their phones, smartphones and other mobile devices when travelling to another EU country because the current prices for roaming calls, texts and data access are so high.”
There are three new elements to her plan:
From mid-2014, consumers will be able to sign up for a cheaper mobile roaming services contract which would kick in automatically when they travel within the EU.
From the same date, mobile companies who do not own their own network will be given the right to lease network space from network-owners at regulated wholesale prices.
Before that, Ms Kroes will expand an existing system of price caps to include internet “data” services from next July. Phone companies will be prevented from charging any more than 90 cent per megabyte of data next year, with the maximum price falling to 50 cent per megabyte by 2014.
Although the commissioner said retail price caps for roaming calls and text services had contained the problem of high fees, phone companies were still pricing close to the maximum levels.
The caps on calls and text messages will also be progressively lowered in the next three years.
“The retail price caps have become price floors because, given the current lack of competition, operators have no incentive to offer prices significantly below the regulated caps,” Ms Kroes said. “We are proposing to introduce profound structural market changes because the time has come to tackle the root cause of the problem, the lack of competition, rather than trying to regulate prices forever.”
The European Consumers Organisation welcomed the initiative, but said the cap on data roaming services was a slow start. “It’s blindingly obvious that fair pricing is only possible when the lack of competition is solved,” said the group’s director general Monique Goyens.
The GSM Association, an industry group for phone companies, said it was counter-productive to combine stringent price caps with structural measures.
“We are disappointed that the commission is considering the retail data roaming market as a candidate for price cap regulation, in addition to proposing structural measures. If any price caps are introduced, they should be set at true ‘safeguard’ levels to avoid dampening innovation and competition in the market,” it said.
