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New price mobile cap on the way after EU mobile agreement

Compromise agreement reached.

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Legislators hope that an EU agreement to cap mobile phone roaming charges will become law before the summer holidays. But the hope looks a forlorn one: a network operators' group has warned to expect delays. The GSM Association said that even if the law takes effect as planned on 1 July, network operators won't have to offer the new tariffs until September.

Under the proposed law, "Roaming on public mobile networks," European Union mobile subscribers traveling in another EU member state will pay no more than €0.49 (US$0.66) per minute, excluding taxes, to call home or another European country, unless they opt out of the new tariff. The price will be further limited to €0.43 in 2009, while the cost of calls received while traveling will be capped at €0.24 per minute this year, and €0.19 in 2009. In addition, network operators will see the wholesale prices that they charge one another for carrying roaming traffic capped at €0.30 per minute this year and €0.26 by 2009.

Network operators slammed the law as bad for competition, and for consumers in the long term. The average cost of roaming calls has fallen from €0.83 per minute before taxes in 2005 to €0.59 in the first quarter of this year, thanks to "innovative" tariff plans, mostly based on volume discounts, according to the GSM Association.

One operator, Vodafone, said customers opting for its Passport international tariff already pay less on average than the price caps proposed by the European Parliament. However, only talkative customers see the benefits: Each call they make is subject to a "connection fee" of £0.75 (€1.10 or $1.48), so to get the lower per-minute rate, they must spend more in the first place.

The European Parliament voted on the text of the hastily translated compromise agreement yesterday, but before it can take effect, it must also be approved by the European Commission and the Council of Ministers, then published in the Official Journal.

Now that a compromise has been reached, parliamentarians hope that the member states' telecommunications ministers will give their assent when they meet on 7 June, while German representatives have said they will do everything possible to have the new rules published in the journal by 29 June.

Even then, operators may be able to escape the price caps until September - they will have one month in which to inform customers of the new tariffs following introduction of the rules and then customers have up to two months to decide whether to accept them. If they choose to do so, operators then have another month in which to make the switch; if customers do nothing, operators must apply the new tariffs within two months of making the offer in any case.

"In theory, ... assuming their operators waste no time in offering and activating the new rates and they themselves waste no time in choosing them, customers may be able to benefit from the Eurotariff immediately after the regulation's entry into force," the Parliament said in a statement.

That may be the theory, but in practice it seems likely to take much longer. Many operators will find it difficult to move their customers to a new tariff in the time allowed, while some will have difficulty contacting all their customers within the month, the GSM Association said.



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