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28th Mar 2024

Commission warns mobile firms on unfairly ‘rounding up' phone bills

  • Phone companies regularly round up the cost of a phone call by charging per minute rather than per second (Photo: Wikipedia)

Mobile companies that round up the cost of a telephone call to squeeze more money out of their customers have been warned by the European Commission that they might not be able to continue the practice for much longer.

Telecoms commissioner Viviane Reding is to unveil proposals in the autumn - either late September or early October to deal with the high cost of making telephone calls while abroad within the European Union, and may just include measures to put a stop to per-minute billing in favour of per-second billing, commission spokesperson Martin Selmayr told reporters on Thursday (28 August).

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"There is an interesting and worrying phenomenon that the commission and national regulators have identified," he said.

"In some cases, operators are charging you for a call of one minute, two seconds what they can charge you for two minutes," he explained. "This is a result of not charging by the second."

Commission figures show that consumers are paying 24 percent more than the minutes they actually use to make calls, and 19 percent more for calls they receive.

The issue of per-second billing may be addressed within the rubric of tackling the price of making a call from abroad - known in the industry as ‘roaming' - because the additional cost charged to customers by the practice of rounding up undermines the caps that the EU sets on roaming.

Currently, only France, Lithuania, Portugal and Spain have legislation requiring per-second billing.

As of 30 August, the cap on roaming calls introduced by the EU in 2007 will be lowered from €0.49 to 0.46 per minute (excluding VAT) to make a call, and from €0.24 to €0.22 to receive one.

In 2006, when the cap was first proposed by the commission, roaming charges averaged €1.15 per minute.

The roaming regulation establishing the caps will expire in 2010, but may be extended.

Ahead of its expiration, the cap will be lowered a final time in August 2009 to €0.43 a minute to make a call and €0.19 to receive one.

The GSM Association, an industry trade body, denounced the idea of enforced per-second billing as "micro-management by the commission that would "risk further erosion of competitive differentiation in the market".

A spokesperson for the association, David Pringle, said: "Billing increments are a point of differentiation that operators can use to appeal to customers with different preferences.

"For example, operators may want to offer some tariffs with lower per minute charges, that are billed in 30 or 60 second increments, and other tariffs with higher per minute charges, but smaller incremental billing units."

"As long as operators are transparent about billing increments ... this flexibility is entirely appropriate."

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