European Parliament Adopts New International Roaming Regulation

IBLS Contributor: Bart Goddyn, Goddyn Belgium, bart.goddyn@goddyn.eu, writes:

On 23 May 2007, the plenary session of the European Parliament voted, with a strong majority, for the adoption of a Regulation to reduce international roaming tariffs for mobile communication within the European Union. This Regulation is said to bring a new era in mobile communications with important benefits to consumers.

Rationales for a Regulation

In May 2005, the European Regulators’ Group (ERG) noted that international mobile roaming charges are too high without clear justification. Average retail prices for calls made whilst roaming are four times higher than the equivalent prices for domestic mobile calls. This difference does not reflect the cost incurred by the operators.

Roaming charges for consumers are neither transparent nor comprehensible. Initiatives to address this problem, such as the creation of websites showing roaming prices by regulatory authorities appear to be insufficient.

Roaming services are supplied in at least two Member States. This results in different national approaches to address the consumer prices. These differences bar the development of a single EU market for mobile telecommunication services.

Main Elements for the Regulation

The main elements for the Regulation relate to the cap of charges both among mobile operators and for consumers and to the transparency of these charges. The Regulation should also encourage competition below the price caps (also called “Eurotariff”).

The cap of wholesale charges relates to the charges that mobile phone operators charge each other for their roaming services. This cap takes as its starting point the tariffs for connecting mobile phone calls from other domestic networks. The cap of retail charges sets the maximum price limit at 130% of the average wholesale charge.

This would apply to calls made and received while roaming. Beneath these caps, operators would remain free to compete by offering cheaper roaming services, or packages differentiated according to customer demand.

The proposal also enhances transparency of roaming charges for consumers. Operators will therefore be required to provide and update consumers with readily comprehensible information (either by SMS or by means of a voice call) on applicable roaming charges.

Towards the Regulation

The Council of EU Telecom Ministers is expected to endorse the Regulation on 7 June 2007. The Regulation will then become directly applicable law in all 27 Member States following its publication in the Official Journal, expected by mid-June. The capped retail charges must be made available to customers one month later and will apply by default after a further two months. The wholesale cap will take affect two months after entry into force of the Regulation.