U.S. News

EU Reaches Preliminary Deal to Cap Mobile Phone Roaming Charges


EU negotiators agreed Tuesday to cap mobile phone roaming charges in an effort to cut costs for travelers using their phones abroad -- although it remained to be seen whether customers would benefit from the new tariffs this European summer holiday season.

Negotiators for the European Parliament and EU governments set the roaming cap at 0.49 euros ($0.66) per minute for making a call when abroad and 0.24 euros ($0.33) per minute for receiving one, plus VAT.

The deal still needs approval from the European Parliament and EU member countries. A vote in the EU assembly is expected next week. If passed, EU governments will likely vote on the proposal June 7-8.

"We can't guarantee an agreement, but we're almost there," said German conservative lawmaker Angelika Niebler. It was unclear whether all groups in the European Parliament would go along with the proposed deal, reached after four rounds of negotiations.

Under the deal, network providers would have one month from the time it is approved to offer customers the new pricing plan.

Customers would have two months to choose whether they want to go with the new roaming charge plan or stick with their existing service contracts. This means that if there are no glitches, European holidaymakers would theoretically be able to enjoy the capped rates by mid-July -- but only if they reply to their providers' offer without delay.

The price ceilings would drop further, to 0.43 euros ($0.58) for making calls abroad and 0.19 euros ($0.26) for receiving them, by 2009, the negotiators agreed. The regulation will be reviewed after three years.

Some EU legislators said the proposed changes did not go far enough.

"We should have gone the extra mile. There is room for improvement," said Joseph Muscat, a Socialist from Malta.

High Roaming Charges

The European Commission, the bloc's executive arm, claims network providers are reaping massive profits from high roaming charges that can increase call costs fourfold. The cap -- opposed by the telecommunications industry -- aims to slash roaming fees by as much as 70%.

Currently, a Maltese calling home from Latvia can end up paying as much as 11.21 euros ($15.19) for a four-minute conversation.

The telecoms industry has warned that mobile phone users in Europe could face higher domestic charges if the EU forces telecom companies to limit the costs of international calls.

"We're disappointed. The price caps are very low, they leave no room for competition below those levels. They will become the standard tariff," said David Pringle, spokesman for the GSM Association of Europe's mobile phone operators.

He said that the proposal "smacks of a planned economy-style approach to the market," and that informing all customers of their tariff choices would be a "huge exercize in logistics."

Some 150 million mobile phone customers in the EU use roaming to make calls outside their home nation every year.

The roaming caps represent one of the most significant pieces of EU regulation in recent years. Mobile operators draw between 10-18% of their revenues from international roaming charges, according to a 2006 study by research firm Evalueserve.