Plan aims to cut mobile charges

Consumers could benefit from significant reductions in the cost of using their mobiles abroad if a new European Commission plan is adopted. However, the EU executive has backed away from its original proposal to abolish roaming fees for people who receive calls travelling overseas.

The Commission agreed to propose a regulation yesterday, which would regulate the prices that operators charge each other to carry roaming calls. It also agreed to regulate the retail prices charged to consumers who receive calls when they are abroad. However, it will delay for six months the regulation of retail prices of roaming calls made overseas.

Presenting the regulation, Commission president José Manuel Barroso acknowledged it was a political compromise. However, he said the regulation would reduce the cost of using mobile phones abroad by up to 70 per cent.

"Our analysis shows that very high international mobile roaming charges currently affect at least 147 million European Union citizens," he said. "We have no alternative but to intervene to protect the interest of consumers.

This intervention tackles excessive prices . . . not justified by the market condition." The Commission proposal is a delicately balanced compromise, which was produced following a lengthy debate by the college of 25 commissioners.

The mobile phone industry had vociferously opposed the original Commission proposal, which promised to abolish all roaming charges on calls received when abroad. The proposal had also promised to tie
roaming fees to local mobile call rates charged in the EU's 25 member state's national markets.

Roaming represents €8.5 billion of business for the mobile industry each year. The final Commission proposal seeks to cap wholesale roaming charges, the fees that operators charge each other for
handling calls. It promises to introduce retail price controls immediately for calls received when abroad but wait six months before regulating retail prices on calls made while abroad.

The proposal to abolish roaming fees on calls received when abroad was dropped and a
proposal to tie roaming fees to national rates removed. The Commission's proposed regulation must now be scrutinised by the European parliament and member states before it is adopted. Strong lobbying by the mobile industry is expected in the next few months to both institutions, which have the power to
amend the draft regulation.

Representatives of the mobile industry criticised the new proposal. The GSM Association, which represents mobile firms, said operators had already cut roaming tariffs sharply this year.

"While the Commission has amended several elements in its original proposals in response to concerns raised by the industry and regulators, the GSMA believes its new proposals would still do significant damage to the European roaming market and are not in the interests of consumers," it said.