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March 29, 2012updated 22 Aug 2016 12:53pm

Mobile roaming rate rip off at an end, says EU

The EU has released its wholesale guidelines for voice and data roaming in the EU, which should see an end to customers being ripped off by greedy telcos.

By Allan Swann

Good news for British holidaygoers looking to visit Europe, the EU and EC have reached a preliminary deal to end extortionate mobile roaming rates, starting July 2012.

Neelie Kroes, European Commission Vice President for the Digital Agenda claims the new solution will be long lasting.

"Consumers are fed up with being ripped off by high roaming charges. The new roaming deal gives us a long-term structural solution, with lower prices, more choice and a new smart approach for data and Internet browsing. The benefits will be felt in time for the summer break – and by summer 2014, people can shop around for the best deal," she said.

The European Parliament is expected to approve this agreement in May 2012 and the Council in June, paving the way for the new rules to enter into force on 1st July 2012.

These new rules will see virtual mobile network operators will immediately have the right to access other operators’ networks at regulated wholesale prices in order to provide roaming services to their customers.

This will boost competition between operators, and, Kroes claims, increase the incentives to offer more attractive roaming prices and services.

Furthermore from July 2014, customers will also have the option to shop around for the best deal – including the option to set up a separate mobile contract for roaming from their domestic provider – whilst keeping the same phone number.

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Kroes claims that once enacted, this will mean that each time the customer crosses a border, their phone will switch to the network of their chosen roaming provider without any further action on their part.

A spokesman for Three Mobile said the company welcomes the EU’s announcement.

"This move by EU policy makers is great news for consumers and will help end the gulf that exists between what people pay at home and what they pay when they are abroad in Europe.

"Consumers should be able to use their smartphones abroad without the fear of a huge bill when they return, and this was one of the reasons why last month Three, along with uSwitch, Which?, The Federation of Small Business, The Communications Management Agency, The Federation of Communication Services and INTUG, all signed an open letter calling on the UK Government to put pressure on the EU Commission to give consumers a break," he said.

The EU legislation is unique worldwide, and fulfils a long discussed European Union promise to tackle the high cost of roaming (see table below).

Under the new 2012 rules consumers will pay no more than:
– 29 cents per minute to make a call,
– 8 cents per minute to receive a call,
– 9 cents to send a text message
70 cents per Megabyte of data

These caps will progressively go down so that by July 2014, roaming consumers will pay no more than 19 cents per minute to make a call, a maximum 5 cents per minute to receive a call, maximum 6 cents to send a text message and maximum 20 cents per Megabyte data

Currently there is no retail cap on data, despite the wholesale cap being 50c per megabyte. This has lead to outrageous charges for consumers, known colloquially as ‘bill shock’ – where travellers find £100 pound phone bills waiting for them when they get home, simply from using Google Maps or checking email on their iPhones or other smartphones.

From 2014, when consumer’s travel outside the EU, they will also get a warning if their data bills go past £50.

"You can get it switched off — before you rack up an unexpected and unwelcome bill," said Kroes.

As readers will note from the table below, the fall in data prices over the next 2 years will be a huge boon to consumers – but still leaves telcos with large margins.

Current and new retail price caps (excluding VAT)
  Current July 2012 July 2013 July 2014
Data (per MB) None 70c 45c 20c
Voice calls (per minute) 35c 29c 24c 19c
Voice calls received (per minute) 11c 8c 7c 5c
Text messages 11c 9c 8c 6c

Current and new wholesale price caps (prices operators charge each other)
  Current July 2012 July 2013 July 2014
Data (per MB) 50c 25c 15c 5c
Voice calls (per minute) 18c 14c 10c 5c
Text messages 4c 3c 2c 2c

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