EU's Reding wants "credible" roaming cuts

BARCELONA, Spain Mon Feb 11, 2008 7:35am EST

The home page of Nokia's social networking site called Mosh is seen on a mobile phone in Stockholm in this October 2, 2007 file photo. Mobile phone operators must act before July 1 to avoid the European Union imposing lower prices for texting or surfing the Web via mobile phones when abroad, the bloc's top telecoms regulator said on Monday. REUTERS/Bob Strong

The home page of Nokia's social networking site called Mosh is seen on a mobile phone in Stockholm in this October 2, 2007 file photo. Mobile phone operators must act before July 1 to avoid the European Union imposing lower prices for texting or surfing the Web via mobile phones when abroad, the bloc's top telecoms regulator said on Monday.

Credit: Reuters/Bob Strong

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BARCELONA, Spain (Reuters) - Mobile phone operators must act before July 1 to avoid the European Union imposing lower prices for texting or surfing the Web via mobile phones when abroad, the bloc's top telecoms regulator said on Monday.

Sending a text message or downloading data in another country should not be substantially more expensive than at home, Telecoms Commissioner Viviane Reding told reporters at the Mobile World Congress.

"Higher roaming charges abroad must be justified by additional costs of operators. If not, they will have to disappear," she said.

The GSM Association, an industry group, said consumers were already benefiting from competition and that it would resist any attempt to institute retail price regulation, as the EU did with voice roaming charges.

The 27-nation EU adopted a proposal from Reding last year to cut the cost of making and receiving voice calls outside a person's home country but the proposal did not include data and text messages.

Reding said sending a text message abroad should not be more expensive for consumers than at home plus the "very small marginal costs" for using a foreign network.

"Above this (price level), there is a clear conflict with the single market which I am not prepared to tolerate," Reding said.

ROOM FOR MANEUVRE

With regard to data roaming, used by travelers to check their email on their mobile phones or surf the web wirelessly with a laptop, Reding said the market was still young and operators were testing business models and price plans, and hence regulators should not interfere too much.

She called for a "credible" cut of wholesale rates, however, noting some operators charged 7 euros per megabyte of data while others had cut their wholesale rates to as low as 0.25 euros.

"There is clearly room for maneuver there, and this indicates the level at which the Commission could consider pitching regulation if the market does not follow these recent moves," she said.

Several mobile operators, including Vodafone, KPN, 3 Group and Telefonica have cut their roaming data fees.

Analysts say data roaming is highly profitable, but makes up only a small part of operators' revenue. Data usage on mobile networks overall is growing rapidly.

A study by the European Regulators Group published in January found that transferring one megabyte of data -- the size of a large spreadsheet -- while roaming on average cost 5.24 euros ($7.59) in the EU in the third quarter of last year.

By contrast, several operators offer domestic data plans that include a gigabyte of data, or roughly a thousand megabytes, for less than 50 euros.

Reding called on the industry to offer consumers an attractive EU data roaming package by this summer with prices at the same level as domestic use plus a single, competitive additional charge.

Carriers should also warn consumers of the data roaming rates to avoid "shock bills of several thousand euros", Reding said. Operators already send their customers a text message when they are abroad, informing them of voice roaming rates.

(Editing by Paul Bolding)

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