EC Forces Mobile Carriers To Lower Roaming Charges

Mobile operators in the European Union will be forced to lower their roaming charges next month, as the European Commission seeks a long-term solution to the lack of competition in the market.

From 1 July, consumers opting for the EU-regulated ‘Eurotariff’ will pay no more than 35 cents (32 pence) per minute to make calls whilst abroad in the EU, down from the current price of 39 cents. Receiving calls will cost a maximum of 11 cents (10 pence) per minute, down from 15 cents.

Meanwhile, the cap for data roaming will fall to 50 cents (45 pence) per Megabyte, down from the current price of 80 cents (71 pence) per MB. Monthly bills for data downloading will also be limited to €50 (£45), unless the customer explicitly agrees otherwise.

Lack of market competition

This is the latest in a series of regulated price cuts under the current EU Roaming Regulation, which expires on 30 June 2012. Although the price cuts have succeeded in temporarily reducing roaming prices, the current rules do not solve the underlying problem of lack of competition in roaming services, and prices tend to cluster around the EU regulated maximum price caps.

“These new price caps will temporarily reduce retail prices for making and receiving voice calls when in another EU country during the coming year. But we have to tackle roaming problems at the root with a long lasting structural approach,” said Neelie Kroes (pictured), European Commission vice president for the Digital Agenda.

The Commission is expected to publish its proposals for a long-term solution to the competition problem next week. These will aim to meet the target set in the Digital Agenda for Europe, that the difference between roaming and national telecoms tariffs should approach zero by 2015.

Such a target will be met if competition in mobile markets gives consumers a rapid and easy choice of roaming service at, or close to, a relevant competitive domestic price level, said the EC in a statement.

The proposed measures will build on previous measures by the EC to introduce price caps for roaming charges and increase transparency. Back in June 2010, the Commission noted in an interim report that although legislation has led to lower roaming prices, the market is not yet strong enough to provide the best choice to consumers.

“Even at the practical day-to-day level the lack of the telecoms single market is a nightmare for many SMEs,” said Kroes at the time. “Why should they have to travel around Europe juggling SIM cards and paying a fortune to communicate? A modern entrepreneur wants to have continuous access to all his or her business information travelling around the world with a smartphone and laptop.”

GSMA launches roaming prices index

In related news, the GSM Association – the organisation that represents mobile operators around the globe – today released its Data Roaming Price Basket Index (pdf), which tracks market movements in data roaming prices as offers are constantly revised and new ones are launched.

The new tool takes the best deals by operator and by market and translates these into per MB prices for a range of different user profiles. The Index will be published every two months to provide EU legislators with a current snapshot of movements and pricing in the retail data roaming market, the organisation said.

“Demand for mobile data services abroad is soaring as consumers look to enjoy the convenience of mobile broadband when they travel,” said said Tom Phillips, chief regulatory officer, GSMA. “These price movements are good news for consumers and evidence that operators in this fast-growing, innovative market are increasingly responsive to consumer demand for value.”