EU to propose roaming text cap

 

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Posted on 16 Jul 2008 at 12:37

Mobile phone operators will be ordered to slash the cost of text messages for customers travelling across European countries. The EU will cut prices by around two-thirds, to stop customers getting "ripped off".

According to Viviane Reding, the EU's telecoms commissioner, 2.5 billion SMS messages are sent by roaming customers in the EU, costing 10 times more than domestic text messages. The messages yield a whopping 97 per cent profit margin.

"EU citizens should be free to text across borders without being ripped off," she said.

Reding capped the cost of voice calls last year, a move that proved to be one of the EU's most popular. However, she conceded that Europe's mobile industry "still hasn't got the message that credible price reductions are needed to avoid regulation."

"I will therefore recommend to my fellow commissioners that we propose a regulation of SMS roaming in October," she added.

Roamed text messages currently cost an average of around 23p, excluding sales tax. According to the European Regulators Group (ERG), who voiced their backing for the initiative, prices need to be brought down to between 9p and 12p.

"We believe that roaming remains a problematic issue in the EU communications sector. It's clear that price levels need to come down," said Daniel Pataki, ERG chairman and head of the Hungarian National Communications Authority.

Reding added that the cost of surfing the web using either a mobile phone or a laptop whilst travelling is also currently too high.
"We will also have to discuss in which way to address data roaming, which continues to be heavily overpriced," she said.

The GSM Association - a group which represents big mobile operators including Vodafone, Orange and T-Mobile - voiced its opposition to the idea. The group said the price of roamed texts has already fallen 18 per cent in the last year, and that Reding is threatening to choke the industry's growth.

"These services should be priced based on local market conditions, not on some vision of a single Europe, originating in Brussels," said Tom Phillips, GSMA's chief of government affairs.

However, not all operators were quite so unwavering in their criticism of the EU's proposal.

"It took the EC to intervene on behalf of the consumer on voice roaming, and we're glad it intends to do the same on texts," said Christian Salbaing, managing director of 3 Group Europe. "We share the Commission's concerns that data prices remain too high and are a likely cause of 'bill shock'."

Author: Dawinderpal Sahota