European Union cracks down on roaming charges

For all those who had been complaining of inflated roaming charges, the crackdown by European Union regulators will certainly bring smiles to faces – relief for Indians not really forthcoming unless the Telecom Regulatory Authority of India follows suit.

EU Telecoms Commissioner Viviane Reding yesterday outlined plans to cap the price of sending text messages from abroad within Europe - making it more comparable to doing so at home, again within the continent. She outlined plans that will pave the way for the cost of sending a text while roaming in Europe to be reduced from the current €0.30 (23p) to between €0.11 and €0.15 (9 to 12p), a whopping 50 per cent decrease.

The proposed legislation, which is expected to be introduced in October and may come into force as early as summer 2009, follows a refusal by mobile operators to reduce the cost to customers of sending texts while abroad, the EU said. Charges of accessing the Internet while roaming would also be curtailed. Operators argue that customers are not being ripped off, and that prices have already been falling in what is an intensely competitive industry.

The 2.5 billion text messages sent every year by roaming customers in EU countries cost 10 times as much as domestic messages, Ms Reding said. "EU citizens should be free to text across borders without being ripped off," she added.

"Roaming charges have already drained the wallets of mobile customers too much. It is not a good sign for the competitiveness of Europe's mobile industry that it still hasn't got the message that credible price reductions are needed to avoid regulation."

The average cost of a roaming text message in the EU between October 2007 and March 2008 was €0.29 euro, but was sometimes as high as €0.80 (63p) for Belgian customers, according to the European Regulators' Group (ERG).

"Based on the assessment of the market made by national regulators, the ERG found that roaming prices for sending text messages are currently too high and has highlighted the need for regulation. We welcome the fact that the Commission has arrived at the same conclusions'', said Dániel Pataki, Chairman of the ERG and Head of the Hungarian National Communications Authority. "In the view of the ERG, a price cap between €0.11 and €0.15 per SMS would be appropriate'', he added.

That the EC places a lot of importance on the oneness of the continent's markets is quite evident in some of the other statements made by officials.

''Europe's Single Market should be allowed to play its part, making sure that no borders re-appear on travellers' phone bills,'' said José Manuel Barroso, President of the European Commission. ''On seeing the latest price trends gathered by national telecoms regulators, I am particularly concerned by the high prices paid by consumers for text messages when they are travelling abroad. ''

''There is also a danger that European businesses are put off by non-transparent roaming costs for mobile data services. The Commission will closely work together with the European Parliament and the Council to find swift responses to Europe's data roaming problems,'' he added.

This move by the regulators was not unexpected, and looking at the following data, not unjustified:

1. A typical French customer sending a roaming text message from holidays in Italy this summer could pay up to €0.30, while a Czech tourist in Italy would pay up to €0.42. In Spain, a Swedish holidaymaker could pay up to €0.40 per message when roaming, a German €0.41, a Pole €0.45 and a tourist from the UK as much as €0.63.

2. Only one operator in Austria reacted to the Commission's call for better prices offering 100 bundled text messages at €0.10 per roamed message as of 16 June.

3. Prices for data services while roaming still range from €0.25 per MB to over €16 per MB. This can create "bill-shocks" particularly for users who are not aware that such prices apply. In addition, high wholesale rates prevent smaller operators and operators from smaller EU countries from offering more competitive data packages to their customers.

Last month, the Commission unveiled plans to lower the cost of mobile phone calls by reducing the fees operators charge each other for using their networks. Europe's telecoms watchdog published guidelines for laws to harmonize call termination fees across the EU by 2011.

Currently, 27 national authorities regulate fees charged by an operator for handling calls from another. Brussels said consumers ended up losing out because of variations in cross-border fees.

Operators have until 2011 to abide by the new regulations, which the Commission estimated would make calls 70 per cent cheaper.