EU to toughen up regulation on roaming mobile phone call tariffs

Mobile phone companies have been alerted by the European Commission to slash tariffs on calls made abroad. The warning was issued with a view to prevent unnecessary charges to customers and to open up the market to greater competition.

This follows one of the most popular consumer focussed decisions made by the EU in 2007, the introduction of a price cap on roaming rates for all mobile networks. This resulted in an average 60% drop in the cost of calls made or received whilst roaming within EU territory. Prices have been cut further, with an average decrease of 73% on roaming rates since the commission pressed on mobile phone companies to voluntarily lower charges in 2005.

Neelie Kroes, EU Commissioner for Europe's "digital agenda", states that the gap in price between domestic call charges and those made abroad is still unreasonably high. She is eager to continue closing the gap and hopes that by 2015 there will be no discrepancy between roaming rates and domestic call charges.

A statement issued by the Commission advises, "Retail prices tend to cluster around the EU regulated maximum price caps and the Commission considers that EU rules give operators plenty of margin to offer more attractive roaming tariffs below the regulatory limit."

Ms Kroes states the Commission are currently in the process of deciphering the root of these ongoing problems, and is dissatisfied that the current system has not created more competition in the expanding roaming market. Meanwhile a Morgan Stanley industry spokesperson stated, “Roaming is not as big a source of revenue for European operators as it was before the 2007 price caps, but it still represents a material source of income for them.”

It is expected a decision will be announced early in 2011 on the fate of roaming regulation.