Over the years, mobile operators have justified high roaming charges not only because of the complexity of routing a call over different networks, but also the complex billing process involved for making a call to a roaming mobile handset.
It is high time that the EU’s internal market delivered substantially lower communication charges for consumers and business people traveling abroad, said Reding. I therefore propose that an EU regulation be used to eliminate all unjustified roaming charges. A mobile phone customer should not be charged a higher tariff just because he is traveling abroad.
This view was also backed by the UK telecoms regulator, which is currently the president of the European Regulators Group, the body that brings together the EU’s 25 national telecom regulators and advises the commission. We strongly support Commissioner Reding’s commitment to address this enduring problem, said Kip Meek, chief policy partner at Ofcom. The ERG is very committed to working together with Commissioner Reding to come up with a practical, proportionate and speedy mechanism for getting retail roaming prices down by a substantial margin.
The EU points to the fact that for a four-minute call, roaming prices still vary from as little as 0.20 euros ($0.24) for a Finnish consumer calling home from Sweden, to 13.05 euros ($15.78) for a four-minute call by a Maltese consumer in Latvia.
In some cases, it said roaming prices have increased over the past six months. For example, one unnamed UK operator has increased the price for roaming from 3.45 euros ($4.17) to 4.92 euros ($5.95) when consumers call home across the EU. For a four-minute call from France, Lithuanian customers are charged between 4.41 euros ($5.33) and 12.08 euros ($14.61).
Although some operators have come up with special roaming packages, the EU said these have not been widely taken up by consumers since most of these tariffs are offered on an opt-in basis or may have an additional monthly charge attached to them. It said that in only a few cases has some progress been made. It highlighted an operator in Belgium, which introduced a flat rate for roaming that has brought down the price from 7.20 euros ($8.70) to 4.40 euros ($5.32) for a call home from Cyprus. In Ireland, several operators have eliminated roaming charges for travelers to the UK.
Vodafone Group Plc, the world’s largest mobile operator, was one of the operators that ended roaming charges for its Irish customers visiting the UK. In May 2005, it introduced the Vodafone Passport package that for a fee of typically 75 pence ($1.31) per call, allows UK customers to use their UK call packages in certain overseas markets.
Reding is looking to bring down international roaming charges by addressing inter-operator tariffs (wholesale prices). The EU regulation would ensure that operators do not charge operators from other countries substantially more than the actual cost. The new regulation would ensure that operator savings at the wholesale level are actually passed on to the consumer, and the commission sees also a need for regulation at the retail level.
In addition, for calls made while traveling abroad in the EU, the new EU regulation could introduce the home pricing principle. A mobile customer traveling abroad in the EU would always be charged only the prices that he is used to paying in his country of residence (similar to Passport).
The EU is sure to get a hostile reception from European operators because roaming charges are a lucrative source of revenue and earnings. On Monday Vodafone said it had written to the EU warning it not to rush in new regulation to force down mobile calls made aboard, saying any ill-judged move could have unforeseen effects on the industry. It said market forces should be left to decide how much roaming charges fall.
