EU OKs switching to cheaper roaming contracts when abroad

Data roaming prices in the European Union to be capped from 2012

The European Commission has proposed regulations that will allow consumers to sign up for a cheaper mobile roaming contract, distinct from their contract for national mobile services, while keeping their usual phone number and without having to change SIM cards.

For the first time, a cap on retail prices for data roaming has also been introduced: €0.90 (US$1.30) per megabyte from July 2012. The average price per megabyte is currently €2.23.

The aim is to drive down the cost to consumers of using their mobile phone while travelling within the European Union. The market has not done enough to bring prices down, so structural reforms are necessary, explained Digital Agenda Commissioner Neelie Kroes on Wednesday.

The new proposals would force current network operators to give access to alternative operators from other member states at regulated wholesale prices, which will decrease significantly. This would make it easier for alternative operators to offer competitive roaming services. Increased consumer choice would also further stimulate competition.

Phones will automatically switch to their pre-selected roaming provider when travelling. "This would stop at source the fundamental problem of roaming rip-offs: for voice, for texts, for data. It would stop operators taking advantage of market dysfunction to make a quick profit at the expense of consumers," said Kroes. According to European consumer group BEUC, 72 percent of travellers still limit their roaming calls because of high charges.

If approved by the European Council and the European Parliament the binding rules would come into force for consumers from July 2014. The aim of the Commission is to effectively eliminate the concept of roaming by bringing the difference between roaming prices and domestic prices down to zero by 2015.

In the meantime, a further set of retail caps have been established to come into effect from July 2014: €0.24 per minute for a call made, €0.10 per minute for calls received, €0.10 for a text and €0.50 per megabyte for data. These retail price caps would remain in place until 2016 as a safety net. After that, if the market is functioning well and prices to consumers are satisfactory, Kroes said she didn't expect to see a need for further regulation.

Consumers' organizations welcomed the regulatory changes, but were lukewarm about the new data price cap. "All evidence shows the European telecommunications market urgently needs more competition. Currently, it's a closed shop. But the current cap of €0.90 per MB is a slow start. Consumers should not be ripped off for surfing the net abroad," said BEUC Director General Monique Goyens.

The proposals must be confirmed by the Council and Parliament before June 2012.

Follow Jennifer on Twitter at @BrusselsGeek or email tips and comments to jennifer_baker@idg.com.

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