EU reaches compromise on mobile roaming charges

 

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By Simon Aughton

Posted on 4 May 2007 at 07:51

Telecoms operators may get a summer reprieve, worth hundreds of millions of euros in revenue this year, under a compromise proposal on mobile phone roaming charges put forward by EU lawmakers on Thursday.

The final compromise, backed by all factions in the European Parliament, would give the telecoms industry three months' grace before EU-wide caps on charges for cross-border mobile calls are automatically put in place, lawmakers said.

The European Union legislature has been working out details of regulation with the executive European Commission and member states, but they failed to reach agreement in two days of talks and a vote scheduled for next week has been delayed.

EU institutions disagree on maximum levels for cross-border mobile charges and on whether they should apply automatically to all, as parliament and the Commission wanted, or only to customers who request it, as member states such as the UK say.

'Our major concession is that we are ready to give operators time before the [capped] euro tariff applies automatically. That is the only concession we can give,' said Joseph Muscat, one of two lawmakers steering the regulation through parliament.

'All the political groups presented the package,' said the second lawmaker, Paul Ruebig, pointing to a consensus after parliament was split for months over the rules.

'It's clear that we won't have a vote [next week]. Time is running out,' he told Reuters, adding that a vote is more likely in the week starting 21 May.

The compromise would oblige operators to inform their customers of the regulated tariff and ask whether they would like to switch. After three months, those consumers who have not responded would be automatically switched to the new rate.

The proposal brings the rules - a rare example of widely popular EU regulation - closer to being put in place.

But the Commission's aim to have the caps in place in time for holidaymakers to benefit from cheaper calls this summer is likely to be missed. However this period is also when mobile operators' income from roaming charges peaks. Hence Parliament's suggestion of a grace period that comes close to EU President Germany's proposal for a few months' leeway for operators to adapt to the new pricing regime.

But it may not be enough for states such as the UK, one of the loudest proponents of a full 'opt-in' proposal which would require customers to chose the regulated rate themselves.

'An inflexible proposal which denies mobile phone users choice and could lead to much higher charges on our subsidised handsets is not on,' Industry Minister Margaret Hodge said.

Her ministry is still looking at the latest proposal, but says the roaming plans in general would cost the UK telecoms industry €500 million (£341 million) a year and fears the costs would raise the price of handsets by £25 each.

Nevertheless, a summer reprieve would be crucial for telecom operators such as Vodafone, Deutsche Telecom and Telefonica whose top lines get a boost from the charges customers pay to make and receive calls abroad.

The industry has vociferously opposed any caps, saying they would hamper investment in infrastructure and that prices are coming down in any case. They, and some politicians, also find it hard to stomach price regulation in a free market economy.

The parliament also suggested a new level of caps of 45 euro cents to make calls abroad and 20 euro cents to receive them. This compares with Germany's proposal of 60 and 30 euro cents respectively.