Page last updated at 11:38 GMT, Tuesday, 15 July 2008 12:38 UK

EU challenges roaming 'rip-off'

Mobile phone user
Texting from abroad could become cheaper

Regulators have announced a crackdown on the cost of sending text messages on mobile phones within the EU.

EU Telecoms Commissioner Viviane Reding outlined plans to cap the price of texting from abroad - making it more comparable to doing so at home.

Proposals for laws that force firms to cut bills are likely to be put forward in October, with the EU saying that self-regulation had failed.

The mobile phone operators argue that customers are not being ripped off.

The industry body, the GSM Association, said that they are in a competitive business and that prices are falling.

EU citizens should be free to text across borders without being ripped off
Viviane Reding
EU Telecoms Commissioner

'Wallet draining'

The 2.5 billion text messages sent every year by roaming customers in EU countries cost 10 times as much as domestic messages, Ms Reding said.

"EU citizens should be free to text across borders without being ripped off," she added.

"Roaming charges have already drained the wallets of mobile customers too much. It is not a good sign for the competitiveness of Europe's mobile industry that it still hasn't got the message that credible price reductions are needed to avoid regulation."

The average cost of a roaming text message in the EU between October 2007 and March 2008 was 29 euro cents (23p), but was sometimes as high as 80 cents (63p), according to the European Regulators' Group (ERG).

UK customers pay on average 50 cents (40p) per text message from abroad compared with the equivalent of 15 cents (12p) at home.

And sending a text to the UK from Spain can cost up to 63 cents (50p), the ERG said.

Last year, the European Commission set limits on roaming charges for mobile phone calls across the region.

But it says that "calls on the industry for self-regulation and voluntary reductions of roaming prices for text messages have not been answered".

'Bill shocks'

Ms Reding also wants to put an end to "bill shocks" - when users are hit with unexpectedly high costs for using a mobile connection to surf the internet.

"We will have to discuss in which way to address data roaming, which continues to be heavily overpriced," she said.

GSM Association spokesman Tom Phillips told the BBC that the costs of texting from abroad had fallen by 10% in the past year, and that it was free to receive texts overseas.

There's nothing wrong with mobile firm companies competing on a whole package of services
Tom Phillips, GSM Association

He admitted charges for using mobile phones abroad were still significantly higher than for domestic use.

And he argued that while these charges did not reflect the real price of providing the particular service, there was no need for mobile firms to tie their fees to how much it was costing them to operate the facility.

"When you buy a mobile phone service you get a whole series of things. Often you get a handset that is free or nearly free, so clearly that doesn't reflect the real cost either," he said.

"There's nothing wrong with mobile firm companies competing on a whole package of services - some of which they subsidise, some of which they make relatively more profit on.

"The danger is when regulators get in there and start picking the little bits of that package apart and regulating on cost. That's not in consumers' best interest."

Cross-border fees

Last month, the Commission unveiled plans to lower the cost of mobile phone calls by reducing the fees operators charge each other for using their networks.

Europe's telecoms watchdog published guidelines for laws to harmonise call termination fees across the EU by 2011.

Currently, 27 national authorities regulate fees charged by an operator for handling calls from another.

Brussels said consumers ended up losing out because of variations in cross-border fees.

Operators have until 2011 to abide by the new regulations, which the Commission estimated would make calls 70% cheaper.

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