July 15, 2024

E.U. Plans Sharp Reduction in Data Roaming Charges

According to an advance copy of the plan, the commission will propose that mobile data roaming fees, which according to the commission average €2.23, or $3.22, a megabyte in the 27-nation bloc, be capped at 90 euro cents starting July 1, 2012. The cap would fall to 70 cents a year later, and to 50 cents by July 1, 2014.

The charges to make a voice call while traveling, at present 35 cents a minute, would fall to 24 cents by July 1, 2014. Roaming charges to receive a call, and to send a short text message, would fall to 10 cents from 11 cents by the same date.

The commission’s proposal, which was prepared by Neelie Kroes, the commissioner for telecommunications, will require approval by the European Parliament and the Council of Ministers in a process likely to conclude next spring.

Paul Rübig, a member of the European Parliament from Wels, Austria, said Mrs. Kroes’ plan would probably receive broad backing. “I think this proposal will receive massive support in both the European Parliament and in the Council of Ministers,” said Mr. Rübig, who was the legislative sponsor of the original roaming bill.

“The roaming regulations,” he added “have become a symbol of how the European Union can function in the interests of its citizens.”

Operators, however, criticized the plan by Mrs. Kroes, a Dutch economist, saying that the reduced retail price caps on voice calling and new retail price controls on data would discourage needed investment in new, faster mobile networks.

“The retail data roaming market is growing quickly and prices are falling fast,” said the GSM Association, the group based in London that represents most of the world’s mobile operators. “We are convinced that competition can flourish in this market — if all regulators are prepared to favor it.”

Consumer advocates, for their part, were supportive but said that the caps were not set low enough to spur competition.

Monique Goyens, the director general of the European Consumers’ Organization, a group based in Brussels, said that 72 percent of Europeans, according to a study by her group, limit their mobile phone calls while traveling within the European Union to avoid roaming charges. Voice roaming calls, Ms. Goyens said, cost typically three times what consumers pay domestically; data roaming charges can be up to 50 times what consumers pay in their home markets.

“The current cap of 90 cents per MB is a slow start,” Ms. Goyens said, referring to the proposed retail data roaming cap per megabyte. “Consumers should not be ripped off for surfing the net abroad. It’s blindingly obvious that fair pricing is only possible when the lack of competition is solved.”

Nick White, a spokesman in London for an association that represents corporate users of European telecommunications including MasterCard Europe, Philips, Pfizer, Toyota, Johnson Johnson and BNP Paribas Fortis, said that Europe’s system of roaming charges should be abolished by 2015.

“The latest retail price cap proposals demonstrate acceptance by politicians and regulators that roaming charges are an unjustified imposition on consumers and a stealth tax on cross-border trade which relies increasingly on mobile data communications,” said Mr. White, the executive vice president of the International Telecommunications Users Group. “However, they still do not go far enough in eliminating this particular symptom of market failure.”

Mrs. Kroes’ proposal on roaming is a carefully crafted compromise reached after weeks of consultation with consumer and industry groups. In the weeks leading up to Wednesday’s planned announcement, Mrs. Kroes fought for the retail cap on data roaming, while giving operators an additional 2 cents per SMS on text message roaming, which had originally been set to fall to 8 cents by mid 2014. SMS is still the largest single source of data revenue for most operators.

Article source: http://www.nytimes.com/2011/07/06/technology/06roaming.html?partner=rss&emc=rss

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