POLICIES :: eCommunications :: The right to roam – at the right price
The right to roam – at the right price
More information
The freedom and convenience of the mobile phone has been a clear winner with consumers and business. The ability to keep in touch at any time, in any place has produced a highly competitive European market in mobile communications. But the costs of using your phone outside your home country have been both expensive and difficult to understand. The EU has now acted decisively to reduce prices.
The ability to make and receive calls via your mobile phone when abroad is one of the great advantages of the unified mobile telecommunication systems that operate in Europe and globally. Whether on business or on holiday the ability to keep in touch with friends, family and colleagues is a major benefit of owning a mobile phone.
However, using your mobile abroad – known as international roaming – often brought a nasty surprise when the bill arrived. Many users had little idea of the final cost of international roaming calls. The charges were based on opaque wholesale pricing agreements between operators. A significant difference for roaming charges compared to domestic calls is that users are charged to receive calls whilst abroad, as well as to make them.
Although extensive competition has brought the price of domestic mobile calls down within national borders, pricing for international calls were on average four times higher than domestic calls. And this difference could not be explained by increased costs for operators.
Roaming regulation
More than 79% of the EU population own a mobile phone. Many phone users use their phone less when abroad: mainly because of high roaming charges. This was effectively imposing an artificial economic border within Europe’s internal market and reduced the potential for service growth.
Initially the Commission sought a voluntary change in pricing from the industry and supported this with initiatives such as a public website to expose excessive roaming charges by operators.
But with national regulators powerless to intervene in an issue with complex cross-border jurisdictions and the operators not responding voluntarily to lower charges, the Commission decided to act.
Enter Eurotariff
Since summer 2007, an EU Regulation has been in place to cap mobile roaming charges both at the wholesale (between operators) and the retail (consumer) level.
The Roaming Regulation was proposed and swiftly adopted, and will effectively reduce roaming charges considerably for consumers. The so-called Eurotariff cap will progressively reduce further in 2008 and 2009. NB only voice calls are covered under the Regulation.
The Eurotariff caps set the ceiling for roaming charges and are set to be fair to both consumers and operators. The process should stimulate normal price competition between operators to offer attractive roaming packages.
Clear information on the cost of international roaming will now be available to all roaming customers. Operators must also send details of roaming charges to customers when they need it most – that is when they are abroad – via mechanisms such as text messages.
A bigger picture
Although consumer interest was the major factor in inspiring the Commission to act on roaming charges, there is also a bigger policy picture. Advanced information and communication technologies are vital for Europe’s economy and mobile services are an important part of this. Europe is a leader in the global mobile communications industry.
The new Roaming Regulation should stimulate the sector in many ways. It will help to further liberalise and expand the market for mobile services across Europe.