Leading mobile firms' roaming rates 'excessive'

European Commission finds that Vodafone and O2 abused their dominant market position between 1997 and 2003, writes Jamie Smyth, Technology Reporter

Mobile phone subscribers are being charged excessive roaming tariffs by Vodafone and O2 when they travel to Britain, the European Commission said yesterday.

Announcing the preliminary findings of an investigation into roaming - the fees that firms levy on subscribers when they use their phones abroad - the commission found that Vodafone and O2 had abused their dominant market position for up to six years between 1997 and late 2003.

The finding alleges that the British subsidiaries of Vodafone and O2 charged rival operators - including their sister firms in the Republic - excessive and unfair rates to carry calls for their customers.

These charges were passed on to consumers, leading to high international roaming prices, which made travelling very expensive, according to the Competition Commissioner, Mr Mario Monti, after a statement of objections was sent to the companies.

O2 and Vodafone have two months to reply to the charges and are expected to contest the findings of the investigation.

An O2 UK spokesman said the firm denied the allegations of anti-competitive behaviour and would contest the preliminary findings.

A final commission ruling on the issue is not expected for at least six months.

The finding by the Commission follows a four-year inquiry into international roaming and paves the way for fining both mobile companies.

Under the Treaty of Rome, the Commission could levy fines of up to 10 per cent of turnover.

The finding may also have major implications for Irish mobile subscribers who live near the border or travel to Britain regularly on business.

About half of all international roaming calls made or received by Irish consumers abroad are in Britain and Northern Ireland, the areas singled out by the Commission.

During the period under investigation by the Commission,Vodafone Ireland and O2 Ireland did not receive any preferential roaming rates from the British firms and for much of the period were independent companies.

When asked if the Irish firms would now seek a refund for their customers, an O2 Ireland spokeswoman said it would have to look in detail at the finding.

A Vodafone Ireland spokeswoman said its inter-operator tariffs - the fees that firms charge each other to carry calls - were among the lowest in Europe.

It is possible that the Commission will extend its investigation of roaming to include Irish mobile phone operators. When the commission investigation into roaming began four years ago, it is understood that it looked at all EU states before focusing on the UK.

A commission spokesman said that a similar investigation is already under way in Germany.

The Commission for Communications Regulation (ComReg) recently deferred its review of the roaming market in Ireland until the European Commission completed its investigation.