June 1, 2007 1:24 pm

Rates on mobile phone calls to plummet

Travellers who have been stung by exorbitant rates on mobile phone calls while abroad will be relieved at the recent intervention by the European Commission on so-called “roaming charges”.

From the middle of July the cost of using your mobile phone on holidays is set to fall thanks to a landmark agreement by the commission to cap “roaming charges” on such calls.

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But tens of thousands of users who have signed up to mobile operators’ overseas price plans may not see their call costs fall unless they formally request it, according to Uswitch, the price comparison website. Regulators have yet to clarify when mobile operators need to cut call costs on their overseas price plans.

For all other UK mobile phone users, “roaming” fees are set to fall. The cost of making a mobile phone call abroad will be capped at €0.49 (£0.33) a minute and receiving them will cost no more than €0.24 a minute (£0.16), before VAT. However, if you have already signed up for a set plan, the company does not have an immediate obligation to switch you to a lower “EC” rate unless you request it.

Also, you should remain cautious about these caps. Mobile phone groups are lobbying aggressively against them and it is expected that regulators will offer a few concessions and allow the industry to add certain “loopholes” into their pricing before they finalise the specific nature of the limits. A research paper from regulators offering more details about the changes is expected to be released in July.

As it stands, whether you are better off signing up for a special discount programme for “bulk” calls or switching to the EC’s standard rate is still a matter of debate.

“That’s quite a complex question at the moment,” says Anthony Ball, director at onecompare.com, a mobile phone pricing comparison site. “Opting for the capped tariff is likely to be people’s best bet, but [overseas roaming] packages offered by Vodafone can be cheaper for some people depending on when you use your phone.”

In any case, customers should conduct extensive research before locking themselves into a plan. Existing charges vary widely across the EU and analysts expect providers will tinker with rates to try to offset “roaming rate” revenues which are likely to be crimped by the EC’s decision.

In particular, rates for text messaging, which now hover between 25p and 40p, could increase as the ruling does not require providers to cap them.

The cost of roaming calls to and from the US and other non-European countries may also jump higher. At the moment it costs an eye-popping £1.37 per minute to make a roaming call on a UK phone from New York or California on O2’s network.

The ins and outs of how roaming fees are charged can be quite confusing. The array of packages tends to include caveats permitting providers to charge more if you are connected inadvertently to another “unpreferred” network while abroad.

“You could be making a call in Dubai and not realise that your phone had roamed on to a different network and you could be charged on that rate and have a very expensive bill when you come back,” says Chris Frost, a spokesman for Uswitch.

It is also difficult to compare packages as they tend to be quite tailored.

Among the best deals on offer is Vodafone’s “passport plan”, which charges a connection fee of 75p per call to make or receive calls of unlimited length at your home rate. “It’s quite a good rate as long as you’re making calls longer than a couple of minutes in length,” says Frost.

Rival providers such as T-Mobile and Orange charge £15 to £20 for a bundle of 30 minutes’ worth of calls. Another option is to sign up with 3, which offers “Like Home”, a plan allowing you to make calls at domestic rates as long as you stay within Italy, Sweden, Denmark, Australia, Hong Kong, Austria and Ireland, the countries where 3 networks are already in place.

Finally, O2 offers “country” plans for popular destinations such as Spain. For a monthly fee of £5, O2 permits you to make calls from Madrid for 25p a minute and receive them for nothing.

If you tire of reading the fine print on your mobile phone bill, yet want some security on rates before travelling, you could consider buying a local Sim card for your phone on arrival, which permits you to receive calls for free. You could also buy a standard calling card to dial home via a phone booth.

“If you’re going to be staying somewhere for a long time and you’re going to be receiving a lot of calls it’s worth buying a local Sim card and a standard calling card,” says Frost of Uswitch. “That’s always your least-
expensive bet.”

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