EU Commissioner wants lower data roaming prices

EU Commissioner Viviane Reding has demanded that European mobile network operators lower their prices for international data services. Reding believes that "Sending a text message or downloading data in another country should not be significantly more expensive than doing so at home". Speaking at the Mobile World Congress in Barcelona, she set a deadline of 1st July for mobile service providers. After that she will check the prices, publish them on a website and inform the European Parliament and the Council of the European Union. She has no appetite for further price regulation, but the industry will have to lower prices considerably by the deadline to avoid this.

Reding had already announced last year, after regulating rates for international voice calls, that her next target would be data roaming fees. The EU Commissioner will accept mark-ups on roaming fees only to the extent that they are slight and justified by actual higher costs for the use of external networks. The commissioner emphasised that it is unacceptable for mobile network operators to make twenty times the profit on roaming customers than they get from their domestic customers. Reduction of wholesale prices between a few large service providers is also inadequate. Instead, low wholesale prices have to be available across the board and include the whole industry. Reding expects the reduced prices will lead to a data roaming market boom. This has been prevented so far because prices are so high.

The politician demanded three concrete measures: First, network operators should have transparent roaming fees and warn their customers of higher international rates. This may prevent "shock bills" of several thousand euros. Second, service providers should offer their customers an EU roaming package as early as this summer that enables them to transfer data in all 27 EU countries for the domestic rate – plus a small one-time fee. Third, a significant and competition-neutral reduction in wholesale prices is needed. Currently she has heard of prices as high as €7/MB. "There is certainly room for movement there," Reding said. Other players in the market are asking only 50 or 25 cents before tax per megabyte. That is an indication of the level that a possible EU regulation could set.

A spokesperson for the GSM Association said the industry body is opposed to price regulation. In response to Reding's remarks, the spokesperson commented that competition works to the advantage of the consumer and that regulating the wholesale prices is the wrong answer. Network operators will oppose any attempt to introduce end-customer price regulation. The association believes data roaming is fundamentally different from voice roaming and is developing rapidly: the voice roaming market is characterised by competition, but the data roaming market is at a different stage of development.

Advertisement

Last week the European part of the 3 Group, the KPN Group and the Polish provider Play, announced that they would lower the net price that they pay each other for data roaming to 25 cents per MB by 1st March. That means that participating network operators could offer data roaming in Germany, Belgium, the Netherlands and Poland for a rate of 40 cents (after tax) per megabyte. O2 announced a reduction in data roaming rates in January and T-Mobile is also expected to follow suit. (Daniel AJ Sokolov)

(jbe)