EU wants international call prices brought in line with domestic charges

28 Mar 2006

The European Union will today propose new legislation that could force mobile operators to abolish so-called ‘unjustified’ international roaming charges, writes the Financial Times. EU telecoms commissioner Viviane Reding warned cellcos in September that she would get tough on tariffs if roaming charges were not cut, but in some cases they have since risen. Today she will propose measures forcing companies to use a ‘home pricing’ rule that would bring international call charges in line with the prices consumers pay at home. Ms Reding will argue that she has the power to legislate using European internal market rules, citing as a precedent laws introduced in 2001 that cut the cost of cross-border bank transfers.

The commissioner is set to face heavy opposition from Europe’s telecoms industry, which makes between 10% and 15% of its profits from international roaming charges. At a time when operators are suffering a slowdown in earnings growth, the loss of roaming revenues would be a significant setback. It is feared that if Ms Reding’s proposals are passed into law, operators would attempt to plug the revenue deficit by hiking prices elsewhere, most likely by pushing up the cost of handsets.