EU to regulate mobile text roaming fees

By Mickey Alam Khan

July 17, 2008

EUw!

Frustration with lack of self-regulation over high text roaming fees has led the European Commission to begin work on creating a new single market for mobile text services within the European Union.

The Commission will also work to end "bill shocks" that can hit roaming customers using a mobile connection to go online. These new measures will be placed before the European Parliament and the Council in early fall.

"EU citizens should be free to text across borders without being ripped off," said EU telecoms commissioner Viviane Reding in a statement from Brussels, Belgium.

"Roaming charges have already drained the wallets of mobile customers too much, especially the 77 percent of young people who send texts while using their mobile abroad," she said.

"It is not a good sign for the competitiveness of Europe's mobile industry that it still hasn't got the message that credible price reductions are needed to avoid regulation.

"I will therefore recommend to my fellow commissioners that we propose a regulation of SMS roaming in October. We will also have to discuss in which way to address data roaming, which continues to be heavily overpriced."

The Commission on July 15 launched a new microsite to display the prices currently charged to mobile consumers sending text messages or going online within the 27 EU member states.

Rates vary, as the European Regulators Group found out upon requesting information from wireless carriers in the EU.

For example, a typical French mobile consumer sending a roaming text message while visiting Italy this summer could pay up to 48 cents, versus a Czech tourist in Italy who would pay up to 67 cents.

Similarly, a Swedish tourist in Spain could pay up to 63 cents per text message when roaming, a German 65 cents, a Pole 71 cents and a Briton $1.

The Commission pointed out that the average retail price of text messages in the EU has not changed since February, when Ms. Reding urged carriers to lower prices voluntarily.

A roaming text message, on average, still costs about 46 cents and can go up to $1.27 for Belgian roamers, the Commission said. This is more than 10 times higher than the price for domestic text messages which can be as low as 5 cents, based on Danish regulator, National IT and Telecom Agency.

Interestingly, only one carrier in Austria heeded the Commission's call for better prices, offering 100 bundled text messages at 16 cents per roamed message as of June 16.

The Commission said prices for data services while roaming currently range from 40 cents per megabyte to more than $25 per megabyte. Such variation can cause "bill shocks" to users who are not aware that such prices apply, the Commission said.

Also, high wholesale rates prevent smaller carriers and those from smaller EU countries from offering more competitive data packages to their customers, according to the Commission.

These findings, coupled with feedback from a public consultation that ended July 2, will now be incorporated into the Commission's current review of the scope of the EU Roaming Regulation that has been requested by the European Parliament.

The Commission will also prepare a detailed impact assessment incorporating the findings of the European Regulators Group (ERG).

Based on the assessment of the market made by national regulators, the ERG found that roaming prices for sending text messages are currently too high and has highlighted the need for regulation, said Daniel Pataki, chairman of the ERG and head of the Hungarian National Communications Authority, in a statement.

"We welcome the fact that the Commission has arrived at the same conclusions," Mr. Pataki said. "In the view of the ERG, a price cap between 11 Euro cents [17 U.S. cents] and 15 Euro cents [24 U.S. cents] per SMS would be appropriate.

"On data roaming, we will have to continue to assess the need for additional regulation," he said. "We call on the industry to be vigilant on data roaming prices so that price regulation can be ruled out in the future.

"The ERG is also concerned that lower wholesale charges for data roaming should be available to smaller and newer operators."