UK: EU Roaming Regulation Eurotariffs To Be Slashed

Led by the German presidency, delegates from the European Parliament, Commission and Council, on 23 May, agreed a compromise text for an EU Roaming Regulation on charges for using mobile phones abroad. The Regulation still needs formal approval by the Telecoms Council when it meets on 7 June. MEPs are urging the Council to ensure a fast-track entry of the new Regulation into the Official Journal and so enter into force 24 hours later.

The Regulation was broadly supported by representatives of the 27 EU Member States.  But, many MEPs have criticised the caps on roaming (known as "Eurotariffs") as not going far enough - a point on which the Governments of Finland, Denmark and Poland agree.  The European Consumers' Organisation (BEUC) has also called for lower caps, stating the price caps are "still too high and should be readjusted to reflect the real costs".

Governments of the UK, France and Spain, however, oppose the caps arguing that they are too low, or, distort the free market. The GSM Association, which represents nearly 700 mobile phone operators, also lobbied strongly for less restrictive regulation. They argue that European operators have already made significant cuts in roaming fees and that heavy EU regulation could hurt investment and growth in the industry.

• Tariff – According to the compromise, EU roaming tariffs will be lowered in three steps, starting at €0.49 per minute before VAT for outgoing calls within Europe and €0.24 for calls received within Europe. Finally, two years later in 2009, calls will be capped at €0.43 and €0.19.

• Opt-in/Opt-out – Once the Regulation comes into force, operators will have a month to make the new Eurotariff available to their customers. Customers may choose to opt-in or opt-out of the scheme. Those customers choosing to do nothing will be automatically enrolled two months later. Customers that have already chosen a special roaming tariff (such as flat rate or business rate) will not be automatically switched to a European regulated tariff.

• Switching – Customers may manually choose their roaming network without being automatically routed to their home provider's partner network.

• Price transparency – When crossing a border, all customers will get a free SMS that contains personalised price information on voice calls. Operators will also be obliged to offer an additional free phone number for more details on roaming data prices and peak/off-peak charges.

• Tariff – The maximum inter-operator wholesale tariff is set at €0.30 sliding to €0.26 by 2009. Price caps are imposed in both retail and wholesale markets because, without regulation, retail prices may not adequately reflect a reduction in wholesale prices, the Commission believes.

• Switching – The switch to or from the Eurotariff must be free and without conditions or restrictions.

• Price transparency – The new capped rates must be offered to all customers and must be actively and clearly promoted by all operators. This pricing applies irrespective of whether the home provider has its own network, is a Mobile Virtual Network Operator or whether the customer is pre-pay or contract.

• Flat rate charge – One possibility introduced by the compromise text is a "fair use, all-inclusive monthly flat rate to which no charge limits apply". This flat rate, the compromise suggests, could include both voice and data roaming services. Operators are under no obligation to offer a flat rate tariff.

• Many operators are already offering flat rate fees. However, the Commission has the opinion that these are not widely taken up due to lack of consumer awareness, their complexity and the need for consumer opt-in.

The compromise text clearly states that the Regulation should not apply to SMS, text or value added data services such web surfing – Some MEPs and Member States want limits on the prices charged to customers for data services roaming. The Commission has said that because data roaming only makes up about 1% of operators' revenues it is too soon to start limiting the charges in this strategic market. The Commission has agreed to monitor the situation and make recommendations if required.

It may be that soon, making a short call could become cheaper than sending an SMS.

According to analysts international roaming is a £6bn industry, forming as much as 10% of mobile operators' revenues. Since early 2000 the European Commission and national regulators have been trying to find out whether operators have been overcharging customers for international calls.

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