Europe - SMS roaming prices

Commission to impose cuts in SMS roaming prices

Price decreases for cross-border text messaging (SMS) announced by mobile phone operators are considered disappointing by the EU's Information Society Commissioner Viviane Reding, who announced she is ready to impose price cuts after the 1 July deadline "unless a miracle happens".

"I saw the figures released by the GSM Association: SMS roaming prices are now at €28 cents, down from €29 cents per roamed SMS measured by national regulators in January. I am not impressed by this," Reding told reporters yesterday (12 June), speaking in Luxembourg at the end of the EU Telecoms Council.

She thus confirmed that a new regulation covering SMS roaming prices should be expected, as has already been the case for voice roaming, where the Commission imposed caps on charges for international calls from June 2007 onwards.

Last February Reding sent an ultimatum to EU mobile phone operators setting 1 July as the deadline for lowering SMS and data roaming prices. She clearly stated that she would not accept extra charges for text messages sent abroad in excess of €2 or €3 cents above domestic prices.

Since the average price for roamed texts currently stands at €28 cents and national charges stand between €5 and €10 cents, it is not surprising that she is disappointed. This imbalance is creating fractures in the EU internal market that are increasingly seen as unacceptable. For example, sending a text from Lille to Marseille (both within France but about 1,000km apart) costs significantly less than doing so from Lille to Bruges (which sit opposite each other across the Franco-Belgian border, about 50km apart).

Reding's line was strengthened by the backing she received from several countries during yesterday's Council meeting. In a debate dedicated to the proposed new telecoms authority and radio spectrum, three delegations underlined the "unacceptable" imbalances in roaming charges. Belgium, the Netherlands and Denmark particularly called for fresh intervention in the sector.

Mobile phone operators reacted to the commissioner's latest announcement by underlining that in the 12 months from April 2007 to April 2008, average SMS roaming prices in the EU fell by 18%. "It is a sharp downward trend. There a few services where prices are falling at this rate," said David Pringle, a spokesperson for the GSM Association, speaking to EurActiv.

He added that "the Commission should bear in mind that customers do not pay to receive SMSs abroad, even if this service implies extra costs for operators," speaking on behalf of the main EU mobile telephone operators.

While it is thus certain that the Commission will regulate on SMS roaming prices, it remains unclear whether the same measures will be taken for the data roaming market. Using handsets to access emails or the internet is still a relatively rare activity in Europe, especially on a cross-border basis, even if it is becoming increasingly common and represents the future of Web usage as many analysts point out.

Seeing as mobile internet is still a nascent market, price regulation may be premature and could hamper the development of the sector, according to operators and analysts. Reding is vague on this point. "We received a mandate from the Parliament to regulate both on SMS and data roaming. We will decide what to do on data after checking figures on the actual decrease of prices," she told EurActiv on the margins of the conference.