Monday, September 22, 2008

European Commission Acts to Cut Roaming Costs

The European Commission has proposed to reduce the price of roaming text messages by 60% as of 1 July 2009. This would put the cost per SMS at no more than €0.11, compared to the current EU average of €0.29. The Commission also wants to cheaper data services at home should be better protection against roaming "bill shocks" that can run to thousands of euro. The proposals will now be submitted to the European Parliament and Council, who must agree before they become law. The EU already reduced charges for making and receiving calls abroad (voice roaming) by 60% in summer 2007.

In 2007, over 2.5 billion SMS were sent, representing a market of EUR 800 million.

From summer 2010, consumers should be able to specify in advance how high their data roaming bill can go before the service is cut off -- a measure designed to put an end to "bill shocks". These have led to customers receiving huge bills, in one case €40,000 for downloading a TV show over a roaming mobile line. In addition, a EUR 1 per megabyte safeguard limit for wholesale fees should create a level playing field and stimulate competition.

Finally, the Commission wants price caps for roaming phone calls, introduced in 2007 (now at EUR 0.46 for calls made abroad and EUR 0.22 for calls received abroad), reduced to EUR 0.34 for calls made abroad and to EUR 0.10 for calls received abroad by 1 July 2012 (excluding VAT). Consumers would also benefit from per-second billing after 30 seconds for roaming calls made and per-second billing throughout calls received. Today, they pay 24% more than the minutes they use to make calls, and 19% more for received calls.