Global Economics

EU Caps Roaming Fees for Text Messages


Mobile operators can no longer charge travelers up to 10 times what they pay in their home countries

Holidaymakers within Europe will soon see slashed in half the amount they are charged to send a text message home.

When outside their country, exchange students, back-packers and brides and bridesmaids on hen parties in Tallinn pay on average ten times for a text message—or SMS—what they do domestically.

The European Commission is to put a stop to this, as it feels that mobile operators are taking advantage of young consumers—the main users of text messaging services.

In making the announcement, telecoms commissioner, Viviane Reding, said that she had hoped the industry would lower prices voluntarily, but these calls had "not been answered" and she had been forced to introduce regulation.

Brussels is expected to propose legislation in the autumn with the price cuts set to go into place in July of next year once member states and MEPs have examined the proposals.

On average, Europeans pay 29 cents a message when abroad, according to figures from European telecoms regulators, a cost that can soon add up.

Those living in Belgium, including Ms Reding's own children, have been victims of what she calls "bill shock" when they come home from their holidays and open the mail, as Belgian operators are the most expensive in the bloc, charging as much as 80 cents for a foreign SMS.

"[Mobile operators] are punishing our students, our young travellers and that is completely unfair," she said.

Intent on achieving a comparable price for SMS roaming', as the practice is termed by the industry, no matter where a text messenger may be in the EU's single market, the European Commission announced plans on Tuesday (15 July) to force mobile operators to cut prices from the 29-cent average to between 11 and 15 cents.

"EU citizens should be free to text across borders without being ripped off," said Ms Reding. "Roaming charges have already drained the wallets of mobile customers too much, especially the 77 percent of young people who sent texts while using their mobile abroad."

In February, commissioner Reding called on the mobile industry to lower their prices. Only one operator in Austria responded to her request, offering 100 bundled text messages while roaming at 10 cents a message.

Mobile operator Vodafone has warned that in response to a forced reduction in SMS and data roaming prices, they will simply recoup the losses by raising the cost they charge for handsets.

"I've heard this blackmailing for several years," said the commissioner noting that mobile firms are not the ones "suffering", as text messages deliver 97 percent "pure revenue for the operator," she said.

Mobile operators, for their part, say that prices are already falling without the need for "price fixing". The average price of SMS roaming services in the EU has declined by 18 percent, claims the GSM Association, the industry trade group.

Different markets have inherently different costs, whether from variations in tax or, for example, labour rates, the group says.

"These services should be priced based on local market conditions, not on some vision of a single Europe, originating in Brussels," said GSMA official Tom Phillips.

Data roaming

Commissioner Reding said that the EU executive is also monitoring how much it costs to send email or surf the web via your mobile when in another country. She is not happy that there is such a wide range in prices for this sort of data roaming'.

It can cost as low as 25 cents per megabyte to as much as over €16 per megabyte for these sorts of services, which are often used by business travellers.

The commission considers the data roaming market still too young for regulation in the short term but has not ruled out taking this route in the future.

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