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New mobile "roaming" legislation: cut prices and boost competition

ITRE Press release - Information society21-12-2011 - 10:46

Reducing prices for using mobile phones abroad and boosting competition among cross-border telecommunications service suppliers are the key challenges facing proposed new legislation debated in an Industry Research and Energy Committee hearing with experts on Tuesday.

"The situation is disappointing. The high level of voice, SMS and data roaming prices payable by users is a matter of concern. Operators have respected price caps set in the current regulation which will expire in June 2012. However, today's prices are not those that would prevail in fully competitive markets", said Angelika Niebler (EPP, DE), the MEP who will steer the new legislation through Parliament.

Ms Niebler backs the two-track approach proposed by the European Commission in July 2011, i.e. to set new caps on retail prices (charged to clients) and wholesale prices (split between operators) as of 1 July 2012 on one hand, and to introduce structural measures to boost competition on the other..

One proposed "structural" solution would be to require operators to offer clients domestic and international roaming services separately, so that they are able to choose a different supplier of roaming services if they so wish,  with effect from July 2014.

The new retail and wholesale price caps proposed by Mrs Niebler go beyond those proposed by the European Commission.

Reducing roaming prices

"Roaming prices are clear evidence that the single market is insufficiently integrated. European consumers are reluctant to use their mobile devices when travelling abroad", said Monika Štajnarová, of the European Consumers' Organisation BEUC.

According to Tony Shortall, Director at Telage, a telecoms consultancy, the structural problem is at the wholesale level: wholesale costs are extremely high and must drop significantly.

Boosting competition

"The Parliament needs to choose between a structural solution with incentive price caps and price regulation", said Rober Mourik from Telefonica, adding that it appears to prefer the latter solution.

Emmanuel Forest, of Bouygues Telecom, argued that the "structural" solution, i.e. enabling clients to buy roaming services separately, would be complex and probably inefficient in terms of competition, because the costs of doing so would be higher for smaller operators.

He suggested that an alternative solution would be to oblige operators to offer customers a genuine European tariff, close to domestic prices.

However, Jacques Bonifay, of Transatel, warned that setting roaming price caps too low would reduce competition.

Transparency and consumer protection

Industry Committee rapporteur Angelika Niebler also backed an amendment proposed by Internal Market and Consumer Protection Committee rapporteur Eija-Riita Korhola (EPP, FI), that would require operators to notify customers when they approach a €50 "safety cap" on roaming charges.

Industry Committee vote:  28 February 2012

Plenary vote:: April 2012 (tbc)

In the Chair: Herbert Reul (EPP, DE)

REF. : 20111219IPR34600