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EU Roaming Caps Closer to Reality

The European Commission 's proposed mobile roaming regulation cleared another hurdle last week with a successful vote in the European Parliament. The Committee voted in favor of the European Commission's proposals to cut roaming fees by 70 percent, but there's still a long way to go before the regulation is passed. (See EU Votes to Cut Roaming Fees.)

European Commissioner Viviane Reding said in a statement: "Loudly, the bell is now tolling for international mobile roaming charges in Europe." (See EU Addresses Mobile Roaming, EU Wants Roaming Cuts, and Reding Rides Into CeBIT.)

The Industry, Research, and Energy Committee vote means that European mobile operators will have regulated retail and wholesale price caps on roaming fees, possibly by July. But there are still a lot of political agreements to be reached before operators know exactly how much those price caps will be. (See Carriers Wrestle With Roaming Caps.)

The large cap stock that will be most affected by the roaming cuts are Vodafone Group plc (NYSE: VOD), followed by Telefónica SA (NYSE: TEF), Telecom Italia (TIM) , Orange (NYSE: FTE), Deutsche Telekom AG (NYSE: DT), and KPN Telecom NV (NYSE: KPN), according to Dresdner Kleinwort .

There are two important steps to get through before the roaming regulation can come into force. First, the European Parliament will vote on last week's conclusions from the Industry, Research, and Energy Committee in mid-May. And finally, the 27-member Council of national telecom ministers will make the last decision at its next meeting on June 7. The Council needs a two-thirds majority (by country population) and must agree with the Parliament in order for the regulation to be passed.

The two main sticking points on which European politicians disagree are the retail price caps and the "opt-in" versus "opt-out" clauses.

Retail price cap proposals vary from €0.40 ($0.54) to €0.52 ($0.70) for calls made abroad, and from €0.15 ($0.20) to €0.25 ($0.34) for calls received abroad. In last week's vote, the parliamentary committee voted for the lowest retail caps: €0.40 ($0.54) for making calls while abroad and €0.15 ($0.20) to receive calls while abroad.

To date, however, the Council has favored the highest retail price caps, which his why there is much ground to cover to reach an agreement.

Also, the Commission and now the parliamentary committee want an opt-out system where the regulated price caps would automatically apply to all consumers unless they opt for another operator's, possibly cheaper, roaming service. But some member states, and certainly mobile operators, favor an opt-in system, in which consumers would have to sign up to get the cheaper, regulated roaming tariffs.

After last week's vote, Commissioner Reding said she was confident that significantly reduced roaming charges were possible by July, in time for the summer holiday and peak tourist season.

— Michelle Donegan, European Editor, Unstrung

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