EU mobile price regulations displease operators

Anticipating fierce opposition from operators, the European Commission Monday opened a six week-long consultation about its plans to slash the cost of using a mobile phone on the move.

European Information Society Commissioner Viviane Reding announced last week that she would submit a proposal for new legislation cutting the average cost of roaming by 60 percent in the coming months.

The GSM Association (GSMA), a trade group representing European mobile phone operators, condemned the plan as “unnecessary and heavy-handed” in a statement issued even before the consultation started.

The GSMA said regulating retail prices is a drastic step that distorts competition in the market and interferes with companies’ ability to develop their own business models and differentiate themselves from the competition.

Roaming is a value-added service for which mobile operators should be free to charge market rates, GSMA CEO Rob Conway  said in the statement. Conway said it would be “inappropriate” to regulate roaming tariffs at a pan-European level, since national markets are different.

In a statement on Monday, however, Reding said that the reduction of roaming charges is crucial for competitiveness. “Using your mobile phone abroad must stop providing a pretext for excessive charges, and instead become an attractive service for tourists and business travellers anywhere in the 25 EU Member States,” she said.

Roaming charges in Europe [start at about $5.00] for a four-minute call, she said. She also wants operators to stop charging users for receiving calls while on other operators’ networks.

While operators oppose the Commission’s initiative, national regulators broadly welcomed it. “Our commitment to resolve this is absolute,” said Kip Meek, chairman of both the European Regulators Group (ERG) and U.K. telecommunications regulator Ofcom. He said the cost of roaming is “completely disproportionate.”

The planned regulation to force operators to cut roaming charges will have to be approved by a majority of the European Union’s 25 member states and by members of the European Parliament. The contributions to the consultation should reach the Commission by May 12. The consultation paper is also available at: http://europa.eu.int/yourvoice/consultations/index_en.htm

The planned roaming-charges law won’t alter anything in the two ongoing anti-trust cases involving mobile operators in Germany and the U.K. Neither case is ready to conclude yet, said Commission competition spokesman Jonathan Todd.