Financial Times FT.com

Mobile operators clash with Brussels

By Andrew Parker in London and Joshua Chaffin in Brussels

Published: September 23 2008 22:31 | Last updated: September 23 2008 22:31

Leading mobile phone operators clashed with the European Commission on Tuesday after it set out plans to cut the cost of web surfing on handsets while abroad.

The European Union executive also unveiled plans that would force mobile operators to reduce the roaming charges paid by customers who send cross-border text messages inside the EU.

Finally, the Commission proposed to extend the life of a law that last year cut the cost of making cross-border calls on mobiles. Viviane Reding, EU telecoms commissioner, blasted mobile operators, saying: “It is high time that consumers can experience the results of this single EU market in the telecoms field. Roaming charges must be justified . . . or they will disappear.”

Mobile operators led by France Telecom’s Orange objected to her intervention in the fast-growing data market.

Operators are reporting rapidly increasing revenue from mobile customers using their phones for web surfing and e-mail.

Ms Reding’s proposals involve setting a price cap on the wholesale charges that operators levy on each other when customers download data to their mobiles.

She is proposing a cap of €1 ($1.40, £0.80) per megabyte of data, which compares to current average wholesale charges of €2 per MB. One MB of data amounts to downloading about 300 e-mails without attachments, or watching one YouTube video.

Eric Debroeck, Orange’s senior vice-president responsible for regulatory affairs, said: “The European Commission has acknowledged the emerging and developing nature of the data roaming market, but we regret the lack of coherence of the proposal which imposes a safeguard tariff at the wholesale level.”

Ms Reding’s proposals must be approved by the European Parliament and EU member states.

She hopes the measures to cut the cost of web surfing and text messages will take effect in July next year.

The current average cost of sending a cross-border text is €0.29 per text, and Ms Reding is proposing a price cap of €0.11.

Ms Reding was the architect of the EU regulation that last year forced mobile operators to cut the roaming charges that apply when customers make phone calls while abroad.

Cross-border calls inside the EU now cost no more than €0.46 per minute, and Ms Reding is proposing to extend the regulation’s life from 2010 to 2013, by which time the price should have fallen to €0.34.

Meanwhile, Ms Reding’s broader reform of EU telecoms legislation receives its first reading in the European parliament on Wednesday.

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