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[March 16, 2014]
MEPs to vote to scrap mobile phone roaming charges: Law abolishes fees in member states from 2015 Operators warn domestic bills may rise instead
(Guardian (UK) Via Acquire Media NewsEdge) Roaming charges for using a mobile phone in the European Union will be abolished from December 2015 in proposals expected to be voted through the European parliament tomorrow, but operators have warned that bills could rise domestically to pay for the change.
Posting holiday snaps to Instagram or keeping up with emails while abroad should no longer result in unexpectedly high bills under legislation to be approved tomorrow by members of the European parliament's industry committee before being rubber stamped by the full parliament on 3 April.
Operators will no longer be able to charge travellers to the European Union's 28 member states extra for calls, texts and internet use, a practice that the telecoms commissioner, Neelie Kroes, has described as a "cash cow" for the industry.
These charges are already set to fall from euros 450 (pounds 376) per gigabit to roam on the internet to euros 200 in July as a result of recent European legislation. But abolishing roaming charges completely will make a big difference for consumers - meaning they will pay the same rate as at home, currently about pounds 10 per gigabit in Britain. One gigabit is just enough to download a single standard-definition feature film from iTunes.
But a coalition of networks representing 45 million consumers has warned the legislation is so badly designed that the cost of domestic calls could rise to pay for it. "There is a risk that domestic tariffs for European consumers will increase," the coalition said. "Roaming might not be subject to surcharges anymore, but the overall level of tariffs would increase, and non-roaming customers might effectively foot the bill for roaming customers." The coalition, which represents 15 operators and virtual networks including Three, Virgin Media, France's Free and Italy's FastWeb and CoopItalia, says in order to avoid a big increase in domestic call costs, the wholesale prices that operators charge rivals for customers to roam on their networks needs to come down.
Smaller operators fear they could be charged more than their customers are paying, while Europe's largest networks could do deals to limit their costs.
From July 2014, the wholesale cost of roaming will be capped at 5 cents per megabit of data or per voice call made, and at 2 cents per text. This sounds low, but British customers currently pay less. Data costs around pounds 10 per gigabit for consumers, while the European wholesale cap is not set to fall below euros 50 (pounds 42) per gigabit.
"Effective wholesale regulation is key," said Three Group's regulatory affairs director, John Blakemore. "Without it if customers from northern Europe go to southern Europe and use their smartphones they are going to incur very large wholesale charges, but the amount operators can recoup is going to be cut. That is unsustainable and at some point that could have an impact on the domestic prices operators have to charge their customers." An alliance of the largest operators warned last year that abolishing roaming could cost the industry euros 7bn in cash flow before 2020. The European Telecommunications Network Operators' Association has claimed that removing one of the most profitable sources of revenues could force networks to slash their investment, hampering the rollout of 4G services.
Receiving a shockingly high bill will remain a risk for those travelling outside Europe, because there are no price controls.
Posting holiday snaps to Instagram or checking emails while abroad should no longer result in unexpected costs (c) 2014 Guardian Newspapers Limited.
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