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Last Updated: Wednesday, 23 May 2007, 10:05 GMT 11:05 UK
Q&A: Mobile phone charges
Mobile phone user
Phone users are being ripped off, lawmakers believe
The European Parliament has backed proposals to drastically cut what mobile phone users have to pay to call home while travelling in Europe.

Lawmakers say people are being ripped off by unjustifiably high roaming charges.

But the mobile phone industry says the proposals will stifle competition and hurt consumers.

What are "roaming" charges?

When customers use their phone abroad - either to call home, to speak to someone in another country or to receive calls from abroad - they pay what is called a roaming charge.

The call cost is often much higher than that of a domestic call - up to 400% more in some cases - while charges vary dramatically from one country to the next.

Phone operators make more than 5bn a year globally from roaming charges, accounting for more than 10% of total sales.

What does the EU say about these charges?

In short, that they are far too high.

For example, a British mobile phone user travelling in France, Italy, Spain and Portugal now typically pays 2.58 (3.80 euros) to make a four-minute call home.

Call charges are even higher in other countries, a four-minute call from Malta and Slovenia costing 3.33 (4.90 euros).

Someone receiving a similar call from the UK while they are in France and Italy typically has to pay almost 2 (3 euros).

But it is not just Britons who are losing out, Brussels says.

More than 150 million people in the 27 countries of the EU own mobile phones.

A Cypriot phoning home from Belgium can pay 12 euros (8) for a four-minute call, for example.

What is the EU planning to do about this?

The European Commission wants to cap the amount that phone users pay while in other EU countries at a level well below the average current price.

Under its plan, people would initially pay no more than 33p (49 euro cents) per minute to make a call to another EU country and 16p (24 euro cents) to receive a call from one.

EU flag and national flags outside European Parliament
MEPs are expected to back the proposed price cuts

In subsequent years, charge costs would fall to 31p (46 euro cents) and 15p (22 euro cents) and 43 cents and 19 cents respectively.

The price caps would be reviewed after three years, at which point Brussels hopes that the market will have become more competitive, pushing prices down further.

The plan only cover countries in the EU and will not affect how much people pay for calls to and from North America, Asia and Africa.

What would this mean for prices?

Call charges are set to fall by up to 75%.

The cost of a four-minute call to the UK from France or Italy will fall by more than 1.35 (2 euros) to about 1 (1.53 euros).

The cost of receiving a UK call in France or Italy will also fall by more than 1.35 (2 euros) to about 75p.

Under the plan, phone operators will have to tell people what they will be charged for making calls before doing so.

I am about to go on holiday. How much will I save?

Wait a minute. There is one small snag.

The price reductions are unlikely to come into force for two months at the earliest, too late for many people.

From the moment the plans are finally adopted - expected in early July - phone companies will have a month to tell their customers about the new prices.

Introducing the new pricing structure could then take a further month.

Customers on standard roaming tariffs will be automatically switched to the lower prices but those currently taking advantage of special deals may not.

They will need to tell their provider whether they want to stick with their existing deal or transfer to the new prices.

I only send text messages. What does this mean for me?

Nothing. The cost of text messages is not covered by the proposed agreement.

But lawmakers have pledged to tackle this issue next, claiming customers are being "massively" overcharged.

What do the phone companies think?

The industry is opposed to the proposals, saying the European Commission has failed to prove that the market is not functioning properly in terms of competition.

"Our members operate in a highly competitive market," said Tom Philips from industry body the GSM Association, who said the new law was driven by "political expendiency".

It would force firms to rethink their investment and pricing strategies, he added.

"Maybe you will see in some cases domestic tariffs increase."


SEE ALSO
EU vote set to cut roaming costs
23 May 07 |  Business
EU close to roaming charge deal
15 May 07 |  Europe

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