EU set to ban mobile phone roaming charges

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Roaming charges for using mobile phones across the European Union are set to be outlawed despite a promise on Monday by two leading companies to slash the fees.

Vodafone and T-Mobile’s UK businesses announced plans to cut the costs incurred by people using their mobile phones to make or receive calls when abroad.

But a spokesman for Viviane Reding, EU telecommunications commissioner, signalled she would proceed with proposed legislation to scrap roaming charges affecting the EU’s 380m mobile-phone owners.

The spokesman welcomed statements by Vodafone and T-Mobile’s UK business, adding: “It is a good sign from the industry, but more needs to be done . . . We will go ahead with our proposal for the benefit of all EU consumers, not just the consumers of a particular company.”

Mobile-phone operators such as Vodafone and T-Mobile, which is owned by Deutsche Telekom, have been hoping their plans to cut roaming charges would undermine the case for EU legislation. Orange, the mobile-phone subsidiary of France Telecom, last week announced plans to cut fees.

Vodafone said its customers would see their European roaming costs cut by at least 40 per cent by April next year compared with last summer. The average cost of roaming will fall from more than €0.90 ($1.15, £0.60) a minute to less than €0.55 a minute.

Arun Sarin, Vodafone chief executive, said the company was providing “a platform for sustainable, lower retail prices across Europe in the future. We believe the market is the best way to meet customer needs, not regulation.”

T-Mobile’s UK business said from June 1 its customers would pay a flat rate of £0.55 ($1.02, €0.80) a minute while using their mobile phones in 29 European countries, the US and Canada.

Jim Hyde, managing director of T-Mobile’s UK business, admitted roaming fees were “too high”, and predicted more mobile-phone operators would follow its lead.

The public consultation on Ms Reding’s legislation ends on Friday. It would introduce a “home pricing” principle for people using their mobile phones while abroad, under which they would pay a “local tariff” for local calls. They would pay a “normal international tariff” for calls to EU destinations.

The telecoms industry claims Ms Reding’s plans are ill-conceived and were announced before an economic impact study was completed.

Tom Phillips, regulatory affairs officer for the GSM Association, which represents mobile-phone operators, said: “The Commission should not interfere in this market. It is a vibrant, competitive market.”

Mobile-phone companies generate billions of euros in revenues from EU roaming fees. Credit Suisse, the investment bank, calculated in March that Ms Reding’s legislation could cut a European mobile operator’s revenues by 3 per cent and their earnings by 6 per cent.

The legislation coincides with operators witnessing a slowdown in the growth of European revenues as the markets are saturated with mobile phones.

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