How the EP cut the cost of 'roaming' on your mobile phone
In May 2007, following intense negotiations with Ministers in the Council of the EU, MEPs in the European Parliament adopted the EU's new mobile roaming regulation. The new law came into force on 30 June 2007, cutting the amount over 140 million consumers could be charged for making and receiving mobile telephone calls while abroad in the EU. MEPs are currently considering similar price caps for text messages and other data roaming services, such as multimedia messages or mobile internet.
Worried by the "risks of anti-competitive agreements and abuse of dominant positions", the European Parliament urged operators to reduce roaming charges as long ago as December 2005. In an own-initiative report, MEPs called on the European Commission "to develop new initiatives in order to reduce the high costs of cross-border mobile telephone traffic".
Before the 2007 roaming regulation entered into force, a roaming call cost the consumer an average of €1.15 per minute - five times the actual the 'wholesale' cost to the operator. The intention was not to fix roaming prices at rates set by the EU, but to set a ceiling beneath which mobile operators could compete by offering lower prices, while continuing to earn a reasonable return.
The roaming regulation enables consumers to benefit from a so-called 'Eurotariff' price cap. Operators may now charge their customers a maximum of €0.46 per minute for outgoing roaming calls and a maximum of €0.22 per minute for calls received while roaming (prices excluding VAT). These caps will be lowered further to €0.43 and €0.19 respectively from the summer of 2009. The average "wholesale" charge an operator abroad can make to a roaming customer's home operator for providing roaming calls is currently capped at €0.28 per minute and will decrease to €0.26 in 2009.
The European Parliament's Industry Committee had voted originally for caps of €0.40 for calls made and €0.15 for calls received, while the Council of the EU entered the recent negotiations proposing caps of €0.60 and €0.30, respectively.
At the insistence of MEPs, the new regulation ensured that the Eurotariff applied by default - unless the customer chose otherwise. The regulation required operators to provide their customers with basic personalised pricing information on roaming charges (including VAT) as soon as they crossed a border. It was felt that if users had to "opt-in" to benefit from the Eurotariff, many would have failed to do so, as operators had little incentive to advertise it. The cap on the average wholesale price automatically took effect 2 months after the entry into force of the new regulation.
Speaking in May 2007, Austrian MEP Paul Rübig (EPP-ED), who was responsible for drafting the European Parliament's position on the new regulation, said that, thanks to the Eurotariff, travellers will "be able to make calls on holiday or business trips, safe in the knowledge that the end of the month will not see a bill higher than the cost of the room or flight, but one within reasonable bounds".
Irish MEP at the time, Simon Coveney (Fine Gael/EPP-ED) said "I believe this is a concrete example of how the EU can intervene to protect consumers from being ripped-off, and to make a positive impact in terms of their mobile phone bills, while allowing a reasonable margin to be earned by the industry."
Hans-Gert Pöttering MEP, President of the European Parliament pointed out that "the compromise agreement reached after difficult negotiations with the Council demonstrated that the EP's representatives can make a real difference in jointly shaping EU legislation with the Council. Parliament has succeeded in finding a broad compromise involving all political groups and four parliamentary committees. The final deal will improve price transparency and will lead to a reduction in prices for millions of roaming customers all over Europe."
During the debate, numerous MEPs took the floor to make the case for an accelerated adoption of the dossier. Roaming, an € 8.5 billion industry, affects 147 million consumers, said Lithuanian MEP Šarūnas Birutis (ALDE). "When we are able to talk more cheaply we will talk more. So telephone service providers will not really lose income, and at the same time consumers will benefit and Europe's business competitiveness will feel a positive influence." Eighty percent of roaming customers, said Maltese MEP Joseph Muscat (PES) citing a Commission paper, stand to benefit from new rates under the Eurotariff.
For Italian MEP Umberto Guidoni (GUE/NGL), the roaming regulation showed that "the European institutions can provide practical answers to issues that no state can resolve on its own". "We have stood up for consumers", agreed Spanish MEP David Hammerstein (Greens/EFA).
So, what happens next?
The European Commission's 2008 review of the current roaming regulation, which will expire in 2010, concluded that competition between operators was not yet strong enough, as prices for roaming calls do not yet vary sufficiently below the maximum levels. The European Parliament's Industry Committee has therefore been working on a Commission proposal for a new law setting price caps on roaming calls for the period 2010 to 2013.
While working on the new roaming regulation, MEPs also looked at operators' billing practices, which sometimes include charging per minute rather than per second. This adds hidden costs to roaming calls.
Cutting the cost of sending text messages and mobile internet browsing
Further EU action is expected to deal with the charges paid by consumers for text messages, as well as wholesale charges for further data roaming services such as multimedia messages (MMS) or internet browsing from mobile phones and laptop devices.
At present, fees charged for texts sent while roaming can be ten times higher than those charged for text messages sent at home. The current prices for data roaming services range from €5 to €10 per megabyte, according to a European Commission study published in June 2008.
The European Parliament's Industry Committee voted on the new roaming proposal in March 2009, and MEPs will vote on the new proposals during the Parliament's Plenary Session in Strasbourg in April 2009.
