Europe - roaming

EU telco watchdog says keep roaming price cap

European Union price caps on mobile phone calls made between member states should be kept beyond their 2010 expiry date and should include text messages, a top telecoms regulator said on Tuesday.

The EU last year introduced the caps on so-called roaming voice calls, a policy which was welcomed by consumer groups as helping bring down the cost of calls across European borders, but the regulation lasts only three years.

"There is a need to extend regulation on voice roaming beyond 2010," Daniel Pataki, chairman of the European Regulators Group (ERG), told Reuters in an interview.

The ERG reached its position after a meeting in Vilnius last week and it represents a boost for EU Telecoms Commissioner Viviane Reding, who has said there is a need to regulate texts and to extend the regulation.

Data gathered by the regulators covering October 2007 to March 2008 showed operators largely pegged prices just under the cap, set at 49 euro cents a minute for the first year before sales tax, for making calls abroad and 24 cents for receiving.

"The cap has worked, all the prices are below the cap," Pataki said.

The cap will fall to 46 cents and 22 cents in the second year and to 43 cents and 19 cents in the third year.

Roaming calls totalled about 8.5 billion euros (6.68 billion pounds) in 2005.

It will be up to Reding to decide whether to propose the roamed voice calls regulation should be extended beyond 2010.

Reding has also given operators until July 1 to cut the prices charged to people for sending and receiving texts outside their home state, and for surfing the Web on a laptop or mobile, known as data roaming.

FINELY BALANCED

Pataki said regulators agreed that price caps on texting abroad were needed and should be added to the regulation. The price for sending and receiving a text message while abroad was "several times the cost of provision", he said.

Nevertheless, the case for including data roaming in the EU regulation was more finely balanced and the ERG agreed decision makers should take a closer look at what would be the advantages and disadvantages of such action, Pataki said.

Operators say data roaming is a fledgling market and prices were coming down already, but Pataki said there was still an issue with "billing shock" or the eyewatering bills some customers receive after surfing the Web abroad.

Watchdogs want operators to provide more transparency to users by indicating how much they are using.

Reding is also set to adopt guidelines for the bloc's 27 states on how so-called call termination rates should be calculated by operators. This refers to how much fixed line and mobile operators charge each other for linking up callers.

Pataki said the ERG discussed last week a draft of Reding's guidelines, known as a recommendation in EU jargon.

Mobile rates tend to be far higher than fixed line termination rates and Reding wants the former to be more in line with the latter -- which analysts say would affect the revenues of the likes of Vodafone, France Telecom's Orange, Telefonica's O2 and Deutsche Telekom's T-Mobile.

"What is important is that we believe we are convinced mobile termination rates should go down," Pataki said.

In the past mobile termination rates have come down by about 40 percent on average in Europe and "this could be repeated in the coming three years," Pataki said.

Reding is expected to give operators time to cut termination fees to between 1 to 2 euro cents per minute, a senior Commission official has said.

Mobile rates can vary from 2 to 20 euro cents per minute in the EU with fixed line termination rates about 0.6 cents.