European Roaming Charges Must Drop Further, EU Says

Mobile phone operators in the European Union are keeping charges for roaming as high as regulations will allow them, showing that there is a need for more competition, the European Commission said in a report published Tuesday.

When mobile phone subscribers travel outside their home country, network operators apply roaming charges for calls made or received on foreign networks, and for messages and data traffic sent. Since 2007, the Commission has set caps for the price of calls made by mobile subscribers from one E.U. member state roaming on a network in another member state.

The Commission's interim report on roaming charges comes just days before the introduction of a new round of price regulation. From Thursday, the retail price of calls made while roaming will be capped at €0.39 (US$0.48) per minute before tax, compared to €0.43 previously, with the cost of receiving a call capped at €0.15 per minute, down from €0.19. The maximum price of sending a text message by SMS (Short Message Service) will remain €0.11.

By 2015, the Commission intends that calls made while roaming should cost no more than calls made at home.

Consumers are better off since the roaming regulations were introduced, with call prices now 70 percent lower than in 2005, according to the Commission. But it is concerned that operators are not competing on price, as most of them charge close to the maximum allowed by the regulations, it said.

For data roaming, the Commission regulates wholesale, not retail, prices. The maximum permitted wholesale roaming charge for data will also be cut on Thursday, from €1 to €0.80 per megabyte uploaded or downloaded, but operators are already charging one another far less, closer to €0.55 per megabyte, the Commission said. Next year it cut the maximum wholesale price to €0.50 per megabyte.

Retail data charges are much higher -- although they too are falling, from an average of €3.62 per megabyte before regulation to €2.66 per megabyte at the end of last year.

Even with the reduction in charges, customers used to unlimited data plans at home can face unexpectedly high bills after a trip abroad. The Commission cited two examples: that of a British student charged €9,000 for data roaming after a month studying abroad, and that of a German who downloaded a TV program while in France last year and was asked to pay €46,000.

To prevent such surprises, the Commission now requires operators to warn customers when cumulative roaming charges reach €40, and cut them off when the charges reach €50, unless the customer has asked for a different limit.

What network operators lose on price, they make up on volume: the Commission estimates that by the end of 2009, the volume of data roaming traffic was 40 percent higher than a year earlier.

Peter Sayer covers open source software, European intellectual property legislation and general technology breaking news for IDG News Service. Send comments and news tips to Peter at peter_sayer@idg.com.

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