EU to cap price of mobile calls

Europeans will save up to 70 per cent on the cost of using their mobile phones while abroad under a landmark deal agreed on Wednesday.

The fees for making and receiving calls while in another European Union country will be slashed from mid-August following the vote by the European parliament in Strasbourg.

The decision to impose price caps on what the European Commission describes as “exorbitant roaming charges” is a significant intervention by the EU in the market and comes despite fierce opposition from operators such as Vodafone.

Under the agreement, the price of making a call while abroad will be capped at €0.49 per minute, before VAT. While existing roaming charges vary widely, they are generally significantly higher.

British fans of Liverpool football club, which was playing in the Champions’ League final on Wednesday night in Athens, paid between £0.55 and £0.85 per minute, including tax, to call home from Greece on a regular contract

A four-minute call home by a French customer in Italy costs €4.72 ($6.39, £3.19), while an Austrian phoning home from Malta would pay €9.51, according to EU data.

The agreement means consumers will be charged a maximum of €0.24 per minute, before VAT, for an incoming call while abroad.

Beuc, which represents European consumers, welcomed the vote. But it warned: “The price caps are still too high and are not linked to the actual costs for operators.”

And in a setback for customers, the cuts will not be in place by the start of the holiday season in July, unless operators respond to the legislation by slashing fees immediately.

In addition, consumer advocates fear operators will attempt to offset loses from overseas phone use by charging more for other services.

In particular, campaigners are concerned that the agreement, which came after torturous negotiations between the parliament and EU countries, does not cover cross-border text messages.

But Viviane Reding, the telecoms commissioner who drafted the law, vowed that she would not hesitate to act on the prices of text messages and other cross-border data services.

She said: “I don’t want to see in 18 months that we have to do something about the data [services ]… I believe that competitive companies do not punish their customers with increases in prices.”

Fewer than one in three of Europe’s 490m citizens use their mobiles while abroad because of fears of high roaming charges. Many of those that do have foreign handsets or sim cards to reduce their bills.

The European Commission has been keen to promote itself as the champion of holidaymakers who will be able to call home more cheaply from foreign beaches, but acknowledges that businesspeople account for eight out of 10 roamers in the EU.

Still, Ms Reding views the legislation as an opportunity to encourage more overseas phone use. With 1m cross-border commuters in the EU and countless foreign holidaymakers and shoppers, she believes the move will catch on quickly.

More broadly, the roaming law is seen in Brussels as hard evidence that the EU, viewed as being remote from its citizens, can work in their favour.

Brussels had for years warned operators about the cost of roaming, and the legislation became a politically irresistable measure after the EU suffered the ignominy of French and Dutch voters rejecting the European constitution in 2005.

Ms Reding outfoxed heavyweight critics of her plan, including some fellow European commissioners, the telecoms industry, the UK, France and Spain, countries which are home to big mobile phone groups.

But her critics fear that the Commission is taking a worrying turn towards more regulation. Nigel Farage, a eurosceptic British MEP, branded the law a publicity stunt. “Frankly, it smacks of Communist central planning when bureaucrats and politicians think they know what the right market price is. They are always wrong.”

Additional reporting by Juan Pablo Peralta and Stanley Pignal