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The BBC's Jenny Scott
"Consumer groups say big bills mean the enquiry is long overdue"
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David Cleeveley of Analysys telecoms consultancy
says proving price fixing is going to be difficult
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Thursday, 12 July, 2001, 14:50 GMT 15:50 UK
EU raids may bring cheaper roaming
EU/mobile phone graphic
EU raids might prompt UK and German mobile phone operators to cut prices for international roaming sooner than they had intended, analysts have said.

The European Commission is investigating the high costs of making calls while abroad and on Wednesday raided the offices of nine UK and German operators, including Orange and Vodafone in the UK and T-Mobil and E-Plus in Germany.

With European Commission officials now studying documents seized during the raids, analysts said the operators were likely to try to pre-empt any EU move to limit roaming charges.

"Operators will move ahead of the EU. We could see some announcement from operators within the next six months," said one UK-based fund manager.

With international roaming representing 5-15% of total revenue, operators would have scope to trim prices without doing much damage to overall earnings, the fund manager said.

Shares recover

As the operators pondered their next move, shares hit hard by news of the raids began to recover.

"The EU raids are not particularly helpful in terms of sentiment but the share price reaction yesterday was overdone," the fund manager said.

On Thursday afternoon, BT shares were up 5% at 469p, Vodafone was 3% higher at 150.5p and Orange up 2p to 563.5p.

A spokesman for Deutsche Telekom-owned One2One said: "We are co-operating fully with the investigation. We understand this is a European-wide activity."

A BT spokesman took a similar line, saying: "We can confirm we have been visited as part of a sector-wide inquiry and will of course co-operate fully."

Virgin Mobile itself admitted that roaming charges were often unclear, and said it had introduced a new set of tariffs at the end of June in order to simplify the cost structure.

Mobile's abroad

International roaming calls - where a mobile phone is used outside the country in which it was bought - tend to cost a lot more than standard rates.

EC competition officials suspect operators may have colluded in setting the prices charged.

My regular bills are 50-100. Then I go to America or Germany for a couple of weeks and my bill is around 300.

Mike Watson
IT consultant
Charges for so-called roaming calls, those involving the sharing of operators' networks, "are not transparent and do not seem related to the costs", EC competition spokesman Michael Tscherny said.

"We want to verify if the companies have colluded in illegal price fixing."

The raids follow a two-year exploratory inquiry, and a warning in April from EC competition commissioner Mario Monti that "competitive dynamics are not at work" in the market.

"My regular bills, before I go away, are between 50 and 100. And then I go to America or Germany for a couple of weeks, and I come back, and I haven't made many calls, and my bill is around 300," said Mike Watson, an IT Consultant.

Initial probe

Five UK companies and four German operators were targeted in Wednesday's raids.

Mario Monti, EU competition commissioner
Mario Monti: competition problems
But the initial inquiry had highlighted "significant problems" over a far wider area, he added.

The exploratory probe revealed pricing problems in 10 of 15 EU states, and prompted Mr Monti to call on operators to implement "demonstrable benefits up front".

The significance of targeting UK and German firms is that they are "really global companies", rather than just local operators, Perdita Patterson, editor of What Mobile magazine, told BBC News 24.

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