BARROSO
LONDON, AP:
THE EUROPEAN Union's head office yesterday proposed legislating controls on the cost of using a mobile phone abroad, saying network operators make 'excessive' profits on roaming calls and have ignored appeals to moderate prices.
European Commission President Jose Manuel Barroso said the proposed legislation would give the industry six months to slash roaming charges or face price caps dictating a maximum 30 per cent retail mark-up over the wholesale price.
Mobile phone operators were given "a final chance to show they are serious about self-regulation," he told a news conference.
While some operators have announced price cuts in anticipation of the roaming rates bill, the average retail charge for a roaming call in the EU is now US$1.46 per minute - more than five times the wholesale price, the commission said.
A local call in Poland costs 24 cents, but on a non-Polish cellphone it costs from 43 cents to US$3.26 per minute, it said. While a local call in Italy costs an Italian customer 13 cents, that same call costs a French customer 64 cents to US$1.50 per minute.
The industry's reaction was immediate and negative.
The GSM Association, a global industry group, said prices were already coming down, and that price caps would 'stifle competition' and prevent innovative roaming deals.
The European Telecommunications Network Operators said the controls posed "serious economic risks (and) would undermine the capacity of the sector not only to innovate, but also to continue providing basic services to the consumer at an affordable price."
But Barroso accused the industry of dragging its feet, saying the European Com-mission was advocating for consumers at a time when many were disillusioned with the EU, seeing it primarily as benefiting European industry.
EU Information Society Com-missioner Viviane Reding said the roaming rates bill that she drafted tackled "one of the last borders within Europe's internal market."
"For years, mobile roaming charges have remained at unjustifiably high levels, in spite of repeated warnings to the industry," she said. "I am convinced reducing roaming charges will not only be beneficial for citizens travelling within the
EU, but will also enhance the competitiveness of Europe's industry."
About 80 per cent of roaming calls are made by business travellers. The bills they get are a "substantial cost factor when doing business within the internal market," Reding said.
She valued the EU market for international roaming at 8.5 billion euros (US$11 billion) a year, accounting for 5.7 per cent of the sector's revenues, and predicted the bill would save consumers 5 billion euros (US$6.4 billion) a year.
The bill provides for a maximum retail mark-up of 30 per cent over wholesale rates negotiated by network operators - and endorsed by national regulators - in deals that make seamless roaming possible across Europe.
