The European Commission has confirmed that it will begin working on measures to ensure that consumers benefit from a truly single market for mobile text services, saying that calls on the industry for self-regulation and voluntary reductions of roaming prices for text messages have not been answered. The average retail price of text messages in the EU has remained unchanged since February when Telecoms Commissioner Viviane Reding called on the industry to lower prices voluntarily
The Commission says it will also seek to put an end to bill shocks that can hit roaming customers using a mobile connection to surf the Internet. It says new measures could be proposed by the Commission to the European Parliament and the Council in early autumn.
Europes Single Market should be allowed to play its part, making sure that no borders re-appear on travellers phone bills, says Jos Manuel Barroso, President of the European Commission. On seeing the latest price trends gathered by national telecoms regulators, I am particularly concerned by the high prices paid by consumers for text messages when they are travelling abroad. There is also a danger that European businesses are put off by non-transparent roaming costs for mobile data services. The Commission will closely work together with the European Parliament and the Council to find swift responses to Europes data roaming problems.
Commissioner Viviane Reding is even more forthright. She says:
EU citizens should be free to text across borders without being ripped off. Roaming charges have already drained the wallets of mobile customers too much, especially the 77% of young people who send texts while using their mobile abroad. It is not a good sign for the competitiveness of Europes mobile industry that it still hasnt got the message that credible price reductions are needed to avoid regulation. I will therefore recommend to my fellow Commissioners that we propose a regulation of SMS roaming in October. We will also have to discuss in which way to address data roaming, which continues to be heavily overpriced.
According to figures from the European Regulators Group (ERG), the average cost of a roaming text message in the EU between October 2007 and March 2008 was 0.29 (0.20), but could be as high as 0.80 for travellers from Belgium. ERG Chairman Dniel Pataki says the ERG feels a price cap between 0.11 and 0.15 per SMS would be appropriate. Prices for data services while roaming range from 0.25 per MB to over 16 per MB
The Commission has unveiled a new roaming website, showing the prices currently charged to consumers who use their mobile phone for sending text messages or surfing the web abroad in one of the 27 EU Member States.
The mobile operators trade body, the GSMA has, perhaps not surprisingly, reacted angrily to the plans.
According to our analysis, the average price of SMS roaming services in the EU has declined by 18% in the last year, as operators launch new tariffs, allowing consumers to buy bundles of texts, as have proved so popular in domestic markets, says Tom Phillips, the GSMAs Chief Government and Regulatory Affairs Officer. The Commissions proposals to single out yet another aspect of the mobile industry and apply retail price regulation, threatens to choke growth and stifle competition.
The GSMA points to the examples of operators that have introduced bundles of text messages for roamers, which can result in a price of 0.10 per message for those who make full use of their bundle, and to daily tariffs, that enable roamers to send messages for 0.15 each for for less than 1 per day,
The Commissions fixation with regulating common mobile prices across the EU is widespread, says Phillips. Different markets have inherently different costs, whether from variations in tax or, for example labour rates. These services should be priced based on local market conditions, not on some vision of a single Europe, originating in Brussels.
On the other hand, Rob Barnes, Head of Broadband and Mobiles at moneysupermarket.com, has welcomed the move, saying:
At last something will be done to reduce the extortionate text and data charges that holidaymakers face. Although ideally this should have been introduced last summer at the same time as the cap on calls, this is great news for anyone who uses their mobile abroad. However, its a shame the providers werent responsible enough to lower charges themselves so consumers could have saved this summer instead of having to wait for regulation. It will be interesting to see if providers try to recoup losses elsewhere as a result.”