EU may cut overseas mobile costs

Brussels says there is too big a discrepancy in call charges

The European Commission has outlined plans that could cut the cost of using mobile phones abroad by up to 70%.

The plans put tight limits on how much operators can charge customers who make or receive international or national calls while in other EU states.

Telecoms operators often charge much more for calls made abroad than they do for those made at home.

Roaming charges are estimated to earn the operators about £6bn (8.6bn euros) annually, or 10-15% of profits.

The commission estimates its changes would wipe £3.5bn off of these earnings.

The changes to roaming charges would benefit business users in particular, who make up 80% of the 147 million EU citizens whose phone calls involve roaming fees.

Industry opposition

Consumers' organisations have long argued that roaming charges are too high, and that people who use their phones abroad are often shocked when they get their bills.

EU ROAMING CHARGE PLANS Maximum cost of calling home from abroad: 34p (0.49 euros) per minute Maximum cost of local call made abroad: 23p per minute Maximum cost of receiving a call while abroad: 11p per minute Charges only apply to calls made to or from EU countries Send us your views

The industry, however, is heavily opposed to the plan.

Mobile phone operators' trade body, the GSM Association, said that its members were already introducing price cuts and lower tariffs that would bring down the average cost of a roaming call within the EU by about 40%.

Association chief executive Rob Conway said the commission's proposals "still amount to a straitjacket that will stifle innovation, dampen competition and ultimately harm consumers".

The association has warned that mobile firms may in future have to restrict users' access to roaming services, or increase charges for domestic calls, to make up the lost revenue.

Charges targeted

European Union information society and media commissioner Viviane Reding hopes to get her proposals in force by the summer of 2007, but they still need approval by the European Parliament and EU governments.

MOBILE COSTS ABROAD Sample tariffs for a four-minute peak-time call in March 2006. Prices vary according to which UK network and host network are used. Calling the UK from Spain: 3.45-5.81 euros (£2.38-£4.01) Receiving a call in Spain from the UK: 1.66-4.40 euros (£1.15-£3.04) Calling the UK from Slovenia: 3.45-8.22 euros (£2.38-£5.68) Receiving a call in Slovenia from the UK: 1.66-7.63 euros (£1.15-£5.27) Calling France from Italy: 4 euros (£2.76) Receiving a call in Italy from France: 1.36-1.88 euros (94p-£1.30) Source: European Commission

The proposals have three main components.

First of all, the commission will place a cap on so-called wholesale charges - the fees which phone networks pay one another for processing roaming calls.

Secondly, the actual prices paid by consumers will be regulated as well. They will be limited to the wholesale charge, plus a profit margin of up to 30%.

Finally, the cost of receiving a call will be capped to reflect the average handling cost - also with a profit margin of up to 30% added.

In practice it means a UK consumer calling home from another EU country such as Spain or France will pay a maximum of 34 pence per minute, or 23p if making a local call within that country.

They would pay a maximum of 11p to receive a call while abroad in the EU.

Most consumers currently pay many times that amount, although a number of large operators have recently reduced their charges.