Crackdown on roaming fees

By THIS IS MONEY
Updated:

 

Euro-MPs today backed plans to slash the cost of mobile phone 'roaming' charges - the prices consumers pay to make and receive mobile calls while abroad.

Girls on beach speak into mobiles

A 45-3 vote of the European Parliament's Industry Committee in Brussels supported compulsory price limits - potentially reducing phone bills by two-thirds in some cases.

However, it will be some time before mobile users notice a drop in their post-holiday bills. The commission had wanted the cuts in place by the summer, but a vote must now take place in the full EU parliament in the next few weeks.

Karen Derby, managing director of comparison website simplyswitch.com, told This is Money, 'We are a little disappointed that a cap won't be in place by the summer, but it's good to see the EU has the will and the teeth to act as a consumer champion.

'In the meantime, holidaymakers should look at getting a bolt-on roaming package from their provider for the moneth they are away - or consider a sim card from a local provider at their destination.'

The MEP who pushed through a compromise proposal, Paul Rubig, urged EU ministers afterwards to speed through a final deal and bring in lower rates in time for the summer holidays when many Europeans are faced with 'outrageous' roaming costs.

'This is a clear signal from the European Parliament to consumers, as well as for the telecoms industry. We are not fixing prices, we are setting a maximum level which may not be exceeded.'

MEPs are also demanding automatic text messaging detailing roaming rates per minute to each user and a 'warning icon' on all mobile phones, reminding callers they are 'roaming'.

Mr Rubig explained: 'The idea is to generate competition and bring prices down across Europe. What we want for mobile phone users is price transparency, just as you expect in a restaurant - you don't order a meal and only find out a few weeks later what it cost when the bill comes in.'

MEPs have called for laws controlling wholesale charges - the rates charged between operators for cross-border mobile phone services - and retail prices to mobile users.

On retail charges to consumers they want a maximum tariff of 70 euro cents - about 50p - for making calls on a mobile from abroad.

And for receiving calls on a mobile while travelling in other EU countries they want a maximum of just 15 cents (around 10p).

Mr Rubig said: 'This is a very low figure because we want to cater to needs of the socially weaker in society and make it possible for them to receive calls.'

Lowest roaming tariffs currently available can be just 5 cents (3p) - but in some cases there is a mark-up of up to 400% compared with domestic calls. A four-minute call from France to the UK on a UK-based mobile can cost more than £3, from Spain closer to £4 and from Malta almost £5.

In all three countries it can cost £3.50 to receive the same length call from the UK on a UK-based mobile. But in some cases roaming prices can exceed £8 for a four-minute call from abroad and, on average, roaming prices are still four times higher than national mobile calls.

EU Industry Commissioner Viviane Reding has described such rates as unjustified, and this afternoon she was said to have opened a bottle of champagne after the MEPs voted largely in favour of her plans for a crackdown.

'If you knew Commissioner Reding, you would know she never misses an opportunity to open a bottle of champagne,' said her spokesman in Brussels.

But her celebration may be premature - the full European Parliament now has to approve today's decision, and then it must run the gauntlet of EU ministers who have the final say and who are deeply split on how hard to crack down on mobile operators.

UK Industry Secretary Margaret Hodge has said lower prices are needed, but she has called for a flexible top rate on roaming charges, with prices imposed by law only if telecoms operators do not reduce average roaming charges within six months to whatever level is fixed by ministers.

Most watched Money videos