EC drafts further mobile price cuts

 

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By Reuters

Posted on 25 Sep 2008 at 09:19

The European Commission has announced further cuts to roaming mobile phone charges among EU member states.

Under the draft proposals the cost of sending a text message in another country will drop from an average of 28 euro cents to 11 euro cents, beginning on 1 July should the measure be approved by the European Parliament.

The draft will also see the introduction of a price cap of 1 euro per megabyte for roamed data such as checking emails or downloading a song using a mobile phone or laptop. Downloading emails and other data abroad costs about 3-4 euros today. Customers will also be able to specify in advance how high their data roaming bill can go before the service is cut off.

The draft also proposes that price caps on roamed voice calls, due to expire in 2010, be extended. The cost of making a roamed call was capped at 43 euro cents a minute on 30 Aug and is due to fall further in a year's time. The proposal foresees the cost of making a roamed call falling to 34 euro cents and to 10 euro cents for receiving a call by 1 July 2012.

Operators say roaming tariffs are already falling but the EC claims cheaper services will spur people to make more calls and use the web more often, generating more income for telecom companies over time.

"Using your mobile phone abroad in the EU should not cost unjustifiably more than at home, whether for making calls, sending texts or surfing the web," says EU Telecoms Commissioner Viviane Reding.

The GSM Association, which represents operators like Telefonica, Orange and Vodafone, claims voice mobile phone usage has risen by 11% and revenues have fallen by 26% since roaming caps were introduced in 2007.

"The overall concern of the industry is that it's a continuation of politically motivated regulation and it's micro regulation," saysTom Phillips, the lobby group's head of public policy.

The GSM Association claims the data roaming market iss too young to regulate and that introducing caps could do more harm than good. It estimated that all forms of roaming make up 10% to 15% of a mobile operator's revenues.