EU Attacks Rip-off Roaming Charges

Rip-off data roaming charges are being targeted by the European Commission in a new proposal announced today.

The Commission proposes that operators must allow users to separate their national and international contracts, but keep their number, by 1 July 2014 in order to access cheaper mobile services when travelling around Europe.

Until then, the proposal includes progressively lower retail price caps on voice and texting services and introducing a new retail price cap for mobile data services.

Outrageous prices

The amount operators charge each other for using other networks’ data services is currently capped at 50cents (45p) per MB.

However, the Commission found that roaming consumers pay an average of €2.23 (£2) per MB for data downloads on other mobile groups’ networks and in some cases as much as €12 (£10.75) per MB.

The proposal aims to introduce more competition and eliminate these ‘outrageous’ prices by giving mobile operators the right to use other operators’ networks in the EU at regulated wholesale prices.

It would also open up access for virtual mobile operators, who don’t have their own network.

Neelie Kroes, European Commission Vice President for the Digital Agenda, said: “This proposal tackles the root cause of the problem – the lack of competition on roaming markets – by giving customers more choice and by giving alternative operators easier access to the roaming market. It would also immediately bring down prices for data roaming, where operators currently enjoy outrageous profit margins.”

Progressive pricing

The Commission proposes capping data charges at 90cents (80p) per 50MB from the 1 July 2012 as the first step.

By 1 July 2014 a call abroad would cost no more than 24cents (21p) per minute to make a call and no more than 10cents (9p) per minute to receive a call.

A 10cents maximum is also proposed per text message and a maximum 50cents (45p) per MB for data services and internet browsing, charged per Kilobyte used.

Calls are currently capped at 35cents (31p) per minute.

A welcome approach

Ovum lead analyst Matthew Howett said that the evidence so far suggests operators gravitate toward price caps so the attempt at long-term restructuring would be welcome.

“We are currently reliant on how well our home network operator has negotiated with partners in the countries we visit. Splitting out this component from our tariffs allows the emergence of new and innovative players who are likely to compete on price,” he said.

“The cost of using your phone abroad is very close to the key decision makers and is politically an attractive initiative to get behind. We are unlikely to see any barriers to its progress through the legislative process.”

He also feels the operators, who have already tried and failed to challenge the current regulation, may decide instead to focus their efforts on attracting new roaming customers.