EU mobile companies agree to cut roaming fees
HELENA SPONGENBERG
02.06.2006 @ 10:12 CET
In the face of strong pressure from the European Commission, six European phone companies have said they will cut costs for roaming fees when consumers use their mobile abroad.
Germany's T-Mobile, Orange in the UK, Italy's Wind, Telecom Italia, Norway's Telenor along with Sweden's TeleSonera all agreed on Thursday (1 June) to cap wholesale rates.
Around 200 million mobile phones users should be able to benefit from lower charges when phoning abroad (Photo: EUobserver.com)
Combined these companies have around 200 million mobile customers in Europe.
The move is the latest effort by mobile firms to appease Brussels after the commission signalled its intention to force down "excessive" charges with regulation that could by next summer entirely eliminate charges for receiving a call in another EU country.
Rene Obermann, chief executive officer of T-Mobile International, told BBC News that Thursday's agreement "show that market forces in the mobile industry function and do not need regulatory intervention".
Fees will drop to €0.45 per minute in October with another drop a year later to €0.36 - half the price of what is currently charged by the service providers.
The savings are expected to be passed along to consumers but the companies did not say what percentage.
Commission spokesman Martin Selmayer said the move was a "step in the right direction" writes Spiegel Online.
Brussels expected to regulate anyway
However, Brussels is expected to regulate anyway with Mr Selmayer quoted by Marketnews as saying "This shows that there is a lot of flexibility in the roaming market for further price reductions".
The commission's "intention is therefore to make this happen with a regulation", he added.
The companies involved said they had extended the invitation to join their initiative to other European phone companies and said additional operators were expected to sign up to the agreement ahead of October 2006, according to Reuters news agency.
The UK's mobile operator, Vodafone, said last month that the average cost for its customers for calls in Europe would fall from €0.98 a minute to €0.55 a minute by April 2007.
EU telecommunications commissioner Viviane Reding, who has spearheaded the pressure on mobile phone companies, has used the argument that EU internal market benefits, such as free movement of goods and persons, should also underpin the telecoms market.
For each phone call made on a mobile, customers pay a start-, transit- and end-fee. Fees for beginning and ending a call are, on EU average, €0.12, while the fee for a call in transit is around €0.01 per minute - a fee that has dropped in recent years as technology has improved.
However, mobile customers using their phone abroad have not benefited from this drop in transit fees when they receive a call from home in another EU country.
They still pay a much higher fee for having their receiving call transferred to a foreign network.
Commission officials working with the issue have previously said that they believe there is an annual revenue of €10 billion made by the mobile firms from all international roaming in the EU.