Europe - roaming costs

EU to rule on roaming price caps for mobile data

European regulators are nearing a decision on whether to impose price caps on text messaging and mobile Internet use while traveling.

Any caps would be similar to one the EU imposed last summer on crossborder voice calls and would cover usage while roaming outside a subscriber's home country.

The European Commission said Friday that a decision was expected Tuesday.

EU Telecoms Commissioner Viviane Reding has accused phone companies of charging too much for data roaming. She has urged them to bring down prices voluntarily by July 1 or face an EU-imposed cap on fees.

Costs people pay for making mobile phone calls outside their home countries have dropped by as much as 60 percent since the European Union executive capped fees last September.

But those caps do not cover mobile Internet or some 200 billion text messages that are sent a year in western Europe. Reding said that prices of those services have dropped only marginally and they need to slide further to encourage more people to use mobile Internet.

Crossing a border within the EU's 27 nations can hike the costs of text messaging, according to European regulators.

The cost of a text message at home ranges from 8 to 15 U.S. cents, but the average cost of sending one from abroad is 43 cents, just a penny less than when Reding first threatened to regulate the prices last year. Prices can go as high as 80 cents.

Mobile operators draw between 10 percent and 18 percent of their revenues from international roaming charges, according to research firm Evalueserve.

Mobile phone operators have accused Reding of undue meddling with the market and insist prices are already dropping.

Telefonica's O2 says it has reduced data roaming prices by more than 40 percent since April. Vodafone Group PLC says it is giving customers more data use for less money with a 45 percent drop in the price paid per megabyte. France Telecom's Orange promises it will soon offer cuts of up to 90 percent on standard data roaming prices.

Mobile Internet use has been growing in recent months, phone companies say, but the pull factor isn't pricing — it's the recent rollout of popular social networking sites like Facebook and attractive gadgets like Apple Inc.'s iPhone, which got a major update Friday.

European mobile phone operators claim price regulations would disrupt a system that supports some the less profitable services they offer and subsidizes phone handsets that many subscribers receive for only a nominal charge.

"It is potentially damaging to regulate this sector," said David Pringle, spokesman for operators' GSM Association. "You prevent new structures from being set up."