[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Wednesday, 12 July 2006, 13:09 GMT 14:09 UK
EU may cut overseas mobile costs
Mobile phone user
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

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.


SEE ALSO
EU plans crackdown on mobile fees
05 Jul 06 |  Business
Anger at EU cap on mobile charges
14 Jun 06 |  Business
Mobile phone roaming fees slashed
01 Jun 06 |  Business
EU cracks down on mobile charges
28 Mar 06 |  Business
Mobile roaming charges to be cut
09 Feb 06 |  Business
EU targets mobile roaming costs
08 Feb 06 |  Business

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific