UPDATE 2-EU govts back deal to cap mobile roaming fees

(Adds news conference, industry reaction)

By Huw Jones

BRUSSELS Nov 27 (Reuters) - European Union governments moved on Thursday to spare consumers from "bill shock" as they agreed to cap the prices of roamed mobile phone texts and data downloading from July 2009, EU president France said.

"We want to avoid so-called bill shock, when someone gets back from a holiday and gets a nasty surprise," said Luc Chatel, French minister for industry and consumer affairs.

Ministers have been alarmed at reports of travellers saddled with bills topping thousands of euros for downloading a photo or television clip while on the road.

The new EU rules will include a mechanism that can allow the data connection to be cut off when bills climb to more than 50 euros.

The European Parliament has joint say with EU states on the measure and is not expected to block a consumer-friendly initiative ahead of its elections next June.

"It shows that Europe is first and foremost supposed to be there for its citizens," said Viviane Reding, the EU telecoms commissioner who proposed the legislation.

Ministers agreed to widen the scope of existing price caps on mobile phone calls made outside a home state in the 27-nation bloc to include roamed text messages and surfing the Web using a handset.

They agreed a retail price cap of 11 euro cents (14 U.S. cents) per roamed text, compared with the current EU average of 29 cents, and there will be a wholesale price cap of 1 euro per megabyte on roamed data.

Ministers also supported Reding's proposal for billing of roamed voice calls per second from the 31st second to crack down on operators that charge by the minute only.

All forms of roaming make up 5 to 10 percent of an operators revenues but is falling as tariffs drop.

A few countries were unhappy with parts of the deal, with Spain saying a cap on data roaming was excessively interventionist".

"It operators don't get their revenues from roaming then they will get it from somewhere else," the Czech Republic said, although nearly all 27 EU states backed Reding's proposal.

"One colleague says this reflects a failure of regulation. It was a failure of responsible pricing by industry which therefore required regulation," Britain said.

The GSM Association, which represents mobile operators like Vodafone (VOD.L), Orange (FTE.PA) and T-Mobile (DTEGn.DE) said it was disappointed and that price regulation was unnecessary in a competitive market.

"In the current economic climate governments should be working to encourage investments. The biggest concern is extending the use of retail price regulation which is a very extreme step and could deter investment in new services," an association spokesman said.

The bloc's telecoms ministers backed extending by three years to 2013 existing price caps on roamed voice calls.

Operators have warned that putting too much pressure on their revenue streams could force them to introduce subscription for owning a handset or bump up national fees.

Reding said since the introduction of caps on roamed voice calls in 2007, tariffs have come down by 50 to 60 percent, traffic is up 30 to 35 percent and national tariffs have dropped by 11 percent.

"The real cost of transmitting an SMS on roaming is less than one cent. I believe there is ample room between one cent and 11 cents which is the ceiling which will be fixed," Reding told reporters.

Much lower prices for data roaming were feasible.

"Operators will be able to provide 25 to 50 cents per megabyte and we set 1 euro per megabyte. Operators have plenty of margin," Reding said. (Reporting by Huw Jones; Editing by Dale Hudson and Andrew Macdonald)