EY governments agree on lower roaming fees

EU governments today agreed to cut the cost of using mobile phones abroad, the last hurdle for a cap on roaming fees to be introduced later this summer.

Europeans will have better information on hidden charges they face when they make calls from another part of the 27-nation bloc after the law enters into force in coming weeks.

Telecom companies will have one month after that to offer customers a new pricing structure with considerably cheaper roaming fees.

Mobile phone users will have another two months to choose whether they want to go with the new plans or stick with their existing contracts.

After that, they will be put on the new contract automatically. This should allow them to benefit from cheaper prices from August, the EU’s executive arm has said – but the exact timing depends on when the law goes into effect.

German Economy Minister Michael Glos told reporters before the Luxembourg meeting started that it was “a very good day” for European consumers.

“Roaming will finally be wrapped up, allowing European consumers to benefit from it with their phone calls in this holiday season,” he said before leading the talks.

Under the new rules, the retail roaming cap will be set at 33 pence per minute for making a call when abroad and 16 pence per minute for receiving one, plus value-added tax.

The ceilings would drop further, to 19 pence for making calls abroad and 13 pence for receiving them, by 2009. The regulation will then lapse, unless the EU decides to extend it.

The telecom industry has likened the caps to a communist-style planned economy regulation and has said it may increase the cost of local calls in response.

Some 150 million mobile phone customers in the EU use roaming to make calls outside their home nation every year. Mobile operators draw between 10 per cent and 18 per cent of their revenues from international roaming charges, according to a 2006 study by research firm Evalueserve.

The European Commission has long argued that operators are reaping massive, unjustified profits from high roaming charges. The caps will force them to slash the prices they charge consumers for making and receiving calls outside their home markets by up to 70%.