EU's Reding edges closer to capping text prices

BRUSSELS, June 19 (Reuters) - EU proposals to prolong price limits on mobile calls made abroad and apply caps also to texts and data appear inevitable as operators have failed to cut tariffs enough, a European Commission official said on Thursday.

EU Telecoms Commissioner Viviane Reding will say around July 20 whether price caps that the European Union introduced on roamed voice calls last year should be extended beyond 2010.

She will also say whether she plans to extend caps to texts and surfing the Web when using a phone or laptop abroad.

European Union states, members of the European Parliament and national telecoms regulators want the voice call caps extended to 2013 because prices have fallen only to just below the cap, indicating a lack of competition, the official said.

They also want caps for texts and even data in some cases as price cuts have been inadequate, the official said on condition of anonymity.

"If things stay as they are today, then the European Commission will have to propose prolonging the voice roaming regulation and propose quite drastic caps on texts and data," the official said.

Privately, operators see caps on texts as inevitable but hope to avoid intervention in data.

The official said regulation could be adopted speedily due to its consumer-friendly nature ahead of next year's European Parliament elections and to show EU citizens after Ireland rejected the Lisbon Treaty that Brussels was on their side.

TOUGH CAPS TO COME?

This year the voice cap falls to 46 euro cents per minute for making a call and 22 cents for receiving one, with a further drop to 43 cents and 19 cents, respectively, in 2009.

An extension of this downward path is likely to target 32 euro cents per minute for calls made, and 12 euro cents for calls received by 2013, the official said.

The GSM Association, which represents mobile operators such as Vodafone (VOD.L) and Orange (FTE.PA), said standard tariffs have clustered around the Eurotariff cap but there existed many cheaper, alternative packages.

Reding called on operators earlier this year to cap roamed text prices at 12 euro cents to the consumer, and to charge no more than 35 euro cents per megabyte in the wholesale market for data by July 1 to avoid intervention.

"The benchmarks Reding has given to industry are very generous and the Commission will probably have to propose something lower," the Commission official said.

The GSM Association said it wanted to know what Reding's text tariff was based on, adding there was currently no charge for receiving texts or a premium for sending a text to a roamer.

"The data roaming market is still in its infancy and growing fast. There does not seem to be a case for intervention," a GSM Association spokesman said.

But the Danish government presented Reding with a study last week saying consumer prices for roamed texts were nine times higher than costs, with data fees up to six times above costs.

"Even though some positive trends have been observed in the market lately, the efforts made on behalf of operators are far from sufficient to secure fair prices for consumers," Helge Sander, Denmark's technology minister, told Reding.

"Therefore, I would like to encourage you to put regulation on the table since the market has clearly turned out to be inadequate in dealing with the matter," Sander said.

The study said a roamed text should cost no more than 4.2 cents and a megabyte of data no more than 1.18 euros, both inclusive of sales tax -- far lower than Reding's targets.

"The Danish study shows the direction in which we will probably have to go," the Commission official said.

An amended regulation would also likely mandate that customers be billed on a per-second basis in response to some operators shifting to per-minute billing after the EU caps were introduced, the official added. (Editing by Dale Hudson)