EU will slash mobile phone roaming tariffs by 70pc
Published 13/04/2007 | 00:11
HOLIDAYMAKERS will enjoy lower mobile roaming charges this summer following an EU decision to put a cap on how much companies can charge.
HOLIDAYMAKERS will enjoy lower mobile roaming charges this summer following an EU decision to put a cap on how much companies can charge for using phones abroad.
The European Parliament's key industry committee voted overwhelmingly in favour of maximum tariffs of 40c a minute for making a mobile call abroad, and 15c a minute for receiving one.
This contrasts with the present situation where mobile customers can be ripped off by as much as ?4 per minute for using their phone overseas.
Roaming charges currently vary massively between different countries and phone companies but it is estimated consumers would save up to 70pc from the new deal - and finally know in advance how much a call is costing.
It will end the current situation where mobile users face unexpectedly massive bills when they return home - a factor which has put many people off using their phones abroad, said Fine Gael MEP Simon Coveney.
"Today's vote is a crucial step forward in ending consumer rip-off when using mobile phones while travelling in other EU countries," he said.
Price transparency would also be improved by automatically sending consumers a free text message with price information whenever they crossed an EU border. However, there is no cap on the cost of sending text or picture messages.
The proposal will now go before the full parliament on May 9, and it is hoped that the Commission, member states and MEPs will quickly strike a deal to allow the new rules to come into effect by summer.
Mobile phone companies have always justified their charges because of the cost of routing calls through rival networks.
But the European Commission calculates the firms profit from the trade to the tune of ?8.5bn a year, and is trying to take on a role as consumer champion to reduce the fees.
Mobile phones are part of the life of virtually every EU citizen, with commission figures showing there are 103 active mobile phone numbers in Europe per 100 inhabitants.
Paul Rubig, the MEP who is steering the bill through Parliament, said the roaming charges of some operators were outrageous.
"We have one state where you pay 5c per minute," he said. "If you go outside the state and phone home, you pay ?3. Nobody can explain why that is justified."
Because the final details have still to be agreed, the final tariffs could be slightly higher at 50c and 25c for making and receiving calls, but any new system agreed will be subject to review after three years.
Mobile phone companies have argued that competition has already caused roaming charges to fall in recent years and that compulsory tariffs could force them to operate some calls at a loss.
The GSM Association, the trade body, insisted that roaming charges had fallen by 25pc since 2005 but politicians believe there is still a huge mark-up on real costs.
Anthony Ball, director of Onecompare.com, which contrasts prices, said roaming rates have been "a huge rip-off. There's no justification".
But the price cap demanded by the European Parliament was so low that the companies were likely to impose larger tariffs for other mobile services, he predicted.
"We may see increases in charges for home-based calling or messaging or new technologies, internet and video mobile TV, introduced with quite high costs," he said.
The Commission is hoping to have the regulation in place for the summer holidays.
Charities shock as O2 wants a 400pc price hike on locall number
MOBILE operator O2 Ireland is seeking to quadruple the revenue it generates from calls to charities and a number of public service bodies through the 1850 locall number.
The company is proposing a 400pc hike price hike from ?4.17 to ?16.74 per minute on peak calls.
In a proposal to telecoms watchdog ComReg, O2 Ireland has also proposed to hike the prices on off-peak and weekend calls to the same number. 1850 numbers are usually fixed at a local call rate and are used by charities, information services, government bodies and businesses.
The revenue generated on a 1850 call is shared by the originator, network provider and the charity or business.
Telecoms lobby group ALTO has called on the regulator to reject the O2 proposal.
The proposal has increased concern in the market that other mobile operators may follow suit in a bid to increase their 1850 call origination charges.
Both O2 Ireland and Vodafone Ireland recently cut staffing levels here as operators look to cut costs and generate more revenues in mature mobile markets like Ireland.
They have also shifted their focus to emerging markets where more value is seen.
A spokesperson for O2 Ireland stressed yesterday that these are wholesale rates only, rather than retail rates.
"In May of last year the company reduced the 1850 wholesale rates. The application that we are now making is to bring rates up to levels that they were previously at in line with industry."
In the letter, ALTO calls the proposal "an abuse of a revenue share product that already gives a return to the operator in question."
However, while ComReg may not agree with the proposal, it is understood that the regulator may not have the power to reject it because of an earlier ruling made in relation to the mobile operators against ComReg.
Back in 2005 the telecoms appeals panel annulled a decision by ComReg that Vodafone Ireland, the country's biggest operator, and O2 Ireland, had a dominant position in the access and call origination segments of the mobile market.
It is also understood that it was this threat of regulation that forced the mobile operators to reduce the 1850 origination charge from ?16.74 to the current ?4.17 level in the first place.
O2 is also seeking other increases for calls to the 1850 number. It wants to hike the off-peak minimum charge to 1850 numbers from ?2.54 to ?9.32 and the weekend minimum charge from ?2.54 to ?9.13.
According to the letter from ALTO, "the rate increase is an infringement of the national numbering conventions and the virtue of use of the 18X0 range of services".
The body has also threatened to bring the move to the attention of the EU Commission separately.