EC Proposes Text Messaging Cap on Mobiles Abroad

Having slashed the price consumers pay for calling on their mobile phones while abroad, the European Commission showed on Tuesday how it plans to do the same thing to the price for sending texts and downloading material from the Internet while abroad.
EU citizens last year sent 2.5 billion text messages, generating €800 million (US$1.2 billion) in revenue for the mobile phone operators.
Consumers pay, on average, €0.29 for sending a text message from their mobile phones while outside their home country. The Commission said this is excessive and proposed a law that will cap the so-called roaming fee at €0.11 per message.
The proposed law, which must be approved by the European Parliament and national governments, also calls for mobile phones to alert users when a large amount of data is being downloaded onto them. This is to avoid what the Commission calls "bill shock." It cites an example: A person was charged €40,000 for downloading a TV program onto his mobile phone while abroad.
It also suggests a maximum fee that mobile-phone operators can charge each other (wholesale roaming cost) for carrying data across borders. The Commission proposed the round figure of €1 per gigabyte of data.
The mobile phone industry hit back Tuesday, claiming that prices overall are falling by 13 percent each year. Price setting by regulators "is not healthy," said David Pringle, spokesman for the GSM Association, a trade group representing mobile operators in Europe.
He added that it is too early to update the previous roaming law because operators still haven't assessed the impact of the changes imposed last year.
"We don't know what the knock-on effects of last year's price caps will be on, say, competition," he said. "As smaller mobile operators are hit relatively harder than the largest ones, the price caps could stunt competition," he said.
The proposed new law is an update of the 2007 roaming regulation. In addition to tackling excessive prices for text messages and data transfers, it will also force operators to reduce further the price of calling from abroad.
Last year voice roaming costs were capped at €0.46 for calling and €0.22 for receiving calls. The Commission said Tuesday it wants to reduce those caps to €0.24 and €0.10, respectively.
And it wants roaming costs charged per second rather than per minute. Consumers are paying an average 24 percent too much for calls abroad because call lengths are rounded up to the whole minute.
"Using your mobile phone abroad in the EU should not cost unjustifiably more than at home, whether for making calls, sending texts or surfing the Web," said Viviane Reding, the commissioner in charge of telecom.
"If Europe wants to deliver concrete results for its 500 million consumers, then practices whereby operators charge for a service which they do not deliver should not be acceptable," said consumer affairs commissioner Meglana Kuneva, referring to the practice of charging per minute instead of per second.
Fighting for lower mobile-phone costs has proved to be the Commission's most popular policy initiative in many years, winning plaudits from even the most ardent euroskeptical newspapers in the U.K.
Commission president Jose Manuel Barroso urged national governments and the European Parliament to work fast so that the new roaming regulation can come into force before people go away on holiday next summer.
"If we get this done quickly we will see tremendous growth in SMS and data services," he said.
The mobile phone industry accused the Commission of pursuing a "short-term political agenda" rather than looking at the long-term interests of the EU, said Pringle.