Financial Times FT.com

Brussels plan on roaming fees sparks fierce debate

By George Parkerand Sarah Laitner in Brussels

Published: July 10 2006 03:00 | Last updated: July 10 2006 03:00

Viviane Reding believes she has achieved a rare feat.

The European Union telecommunications commissioner has drafted a Brussels policy that commands popular support and wins rave headlines in Europe's most eurosceptic media.

"Are you sure there's no catch?" asked the reporter from The Daily Mail, the right-wing British newspaper, checking whether Ms Reding was serious about cutting the roaming fees charged for using a mobile phone abroad.

Ms Reding has surfed the wave of support for her campaign against the charges, which she says are worth €8.5bn (£5.9bn) a year to the European mobile phone industry, representing 5.7 per cent of revenues and up to 15 per cent of its profits.

This week will decide whether she can deliver. Ms Reding, a Luxembourger and former journalist, has won the media war but now has to convince her 24 colleagues at the European Commission her approach is right.

Already a powerful lobby has built up inside the EU executive, which claims her plans to regulate customer prices for roaming are disproportionate, heavy-handed and ill-conceived and industry criticism is intense.

The stakes are high. Ms Reding has unleashed consumer expectations that from next year their phone calls home from the beaches of Spain and Greece will be cut, while mobile operators such as Vodafone, Orange and T-Mobile are waiting for her to fall flat on her face.

"Brussels has been looking at roaming for six years and done nothing," said Peter Erskine, chief executive of O2, the mobile phone company owned by Spain's Telefonica in February. "Every summer it is a great piece of PR but all the time our prices are coming down."

The roaming debate has sparked a fierce argument inside the European Commission ahead of a meeting on Wednesday to settle the issue. All 25 commissioners agree roaming charges should be cut but they are split over how far they should go in the regulatory fight with the mobile phone operators.

"It's not about party politics and its not really ideological - it is about how we balance our political goals," said an aide to José Manuel Barroso, European Commission president.

Cutting roaming charges is often cited by Mr Barroso as evidence the EU is working for its citizens on a practical level. But the Barroso Commission also claims to be pro-business with a commitment to better and less regulation.

Peter Mandelson, British trade commissioner; Günter Verheugen, German enterprise commissioner; and Charlie McCreevy, the Irish internal market commissioner, are leading opposition to Ms Reding's plan to regulate prices down to the consumer level.

"This is the biggest hammer we have in the toolbox and we can only use it as a last resort," said one senior EU official.

Having basked in positive headlines for almost six months, Ms Reding could be about to discover how quickly the tabloid mood can change if she is forced to back down this week.

Additional reporting by Tobias Buck

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