Roaming Cap Plans Anger Networks

The European Parliament has approved plans to cap roaming charges. The move could see roaming costs fall by as much as 75% for mobile customers. Text messages and data charges while abroad will not be affected by the decision, which is still to be approved by the European Commission and member governments of the 27-nation bloc, though the changes are likely to be passed.
Under the proposals, the cost of making a call on a mobile call within the EU would be capped at no more than 0.49 (0.33) per minute in year one, dropping to 0.46 in year two and 0.43 in year three. The cost of receiving a call would fall to 0.24 in year one, 0.22 in year two and 0.19 in year three. Mobile users would receive a free text when they arrive in another country in the EU to tell them how much calls will cost on their mobile while they are in that country.
Policiticans have welcomed the proposals. Lord Freeman, Chairman of the House of Lords European Union Sub-Committee on the Internal Market said he was pleased at the European Parliaments decision.
People have been overcharged for using their phones abroad for too long now and it has become clear the market would not have resolved this issue alone said Lord Freeman. This vote should ensure we move towards a fairer system. It is vital that the Parliament, Commission and Presidency now work together to deliver benefits to consumers this summer.
Not everyone is celebrating though. The mobile operator trade body, the GSM Association (GSMA) says the proposed regulation is unnecessary, will curb competition and risks long-term harm to consumers.
It points out that the average cost of making and receiving calls while travelling in Europe is now 29% lower than during 2005, according to the European mobile phone industrys roaming Retail Price Index. Across the EU, it says, the average cost of a roaming call has fallen from 0.83 per minute, excluding VAT, in 2005 to 0.59 per minute in the first quarter of 2007, though the small print in its statement explains that figure of 0.59 is a weighted average of the cost of both outgoing and incoming calls, with the average cost of an outgoing call in the first quarter was 0.76 per minute and the average cost of an incoming call 0.37 per minute.
The Retail Price Index, which is based on actual traffic and revenue data provided by operators, shows that roaming prices are now almost one third lower than in 2005,” said GSMA CEO Rob Conway. “These price declines, which have been driven by innovation and competition, have been achieved without the market distortions and unintended consequences that would be caused by regulation These proposals are designed to further a narrow, short-term and populist agenda and run counter to the wider interests of consumers, the business community and ultimately the European Union.