Europe - regulating roaming charges

EU to seek caps on text-message fees

The European Union's telecommunications minister plans to propose a new set of price controls that would sharply cut the roaming fees charged by mobile operators to send short text messages while also reducing the cost of surfing the Internet on a cellphone.

Details of the proposal, obtained by the International Herald Tribune on Wednesday, show that the minister, Viviane Reding, will seek to cap retail roaming fees for short text messages, or SMS, within the European Union at 11 euro cents, or 16 U.S. cents, a message.

That would be a 62 percent reduction from the current average of 29 cents, according to the European Commission, the executive arm of the EU.

Reding also intends to recommend a cap on the wholesale cost of using mobile phones to access the Internet - the fees operators charge each other - that would halve the average cost to €1 a megabyte from €2.

SMS roaming prices range from 6 cents in Estonia to 80 cents in Belgium, according to the European Regulators Group, a panel of the European Union's 27 national telecommunications regulators.

"SMS prices are really too high so bringing them down is best thing that can happen for consumers," said Monique Goyens, the director general of the European Consumers' Organization, a Brussels group representing 41 consumer organizations in Europe.

In 2007, Europeans spent €800 million in SMS roaming charges and €560 million on data roaming services, according to the commission. They also spent €5.2 billion in voice roaming charges that year. Over all, €300 billion was spent on telecommunications in Europe, the European Information Technology Observatory said.

Reding devised the EU's limits on charges for voice roaming, which took effect a year ago and have, according to her, saved European consumers an average of 60 percent for the service.

Her new proposal cleared an internal commission economic assessment panel last week and has been circulating for comment among the commission's 27 ministries. The full commission could vote on the proposal as early as Sept. 15.

Approval of the commission is considered likely, given the support of France, which holds the rotating EU presidency through 2008.

In July, Luc Chatel, the French junior minister for consumer affairs, said his country supported efforts to lower SMS charges, which in France have not dropped below 12 cents on average since 2004, even as the volume of messages has doubled in the country, according to a study by Arcep, the French telecommunications regulator.

The European Parliament and ministers' council could vote on Reding's plan this year or next year, with the caps taking effect in July at the earliest, when the new legislative session begins.

Support is likely in the Parliament, which voted overwhelmingly last year for caps on voice roaming. Erna Hennicot-Schoepges, a member of the Industry, Research and Energy Committee, which will consider Reding's proposal, said broad support for data price controls was likely.

"My sense is that there is strong support for this in Parliament," said Hennicot-Schoepges, a member of the European People's Party from Dudelange, Luxembourg. "As a conservative I am generally opposed to price controls, but I think in this circumstance it is the only way to get the mobile operators to cooperate."

Hennicot-Schoepges said she was personally frustrated by the fees she must pay to travel the relatively short distances between Belgium, the Netherlands, France and Luxembourg.

"Every time I cross a border, the operators change and I am charged again," she said. "I think the charges are basically arbitrary and bear no relation to the actual service."

The European mobile industry, which fought unsuccessfully last year against the limits on voice roaming charges, will fight the caps on data roaming, said David Pringle, a spokesman for the GSM Association, which is based in London and represents wireless operators.

"In our view, these markets are healthy, competitive and functioning well," Pringle said. "There is no need for Brussels to set prices."

The operators say they base their roaming charges on the actual cost of connecting voice and data calls between different networks. The charges have so far been set largely by operators without government oversight.

But prices have fallen recently as large operators like Vodafone, 3 and KPN have begun offering reciprocal wholesale data roaming fees to other operators of 50 cents or less per megabyte.

Attempts to regulate the fees with a single, uniform price cap ignore important differences in data services, Pringle said. Those who use push e-mail, a service that forwards messages to mobile phones, for example, stay in constant contact with their network, placing a greater drain on an operator than the 30-minute Internet session of a traveling laptop user.