Roaming: Commission Acts to Cut Cost of Texting and Mobile Data Services Abroad

IP/08/1386

Brussels, 23 September 2008

Roaming: Commission acts to cut cost of texting and mobile data services abroad

Mobile phone users can expect the cost of sending text messages from abroad in the EU to be much cheaper next summer. The European Commission today proposed to reduce the price of roaming text messages by 60% as of 1 July 2009. EU citizens travelling in other EU countries should pay no more than €0.11 per SMS compared to the current EU average of €0.29. The Commission also wants to improve transparency for surfing the web and downloading data on a mobile phone while abroad: consumers used to cheaper data services at home should be better protected against roaming "bill shocks" that can run to thousands of euro. The proposals will now be submitted to the European Parliament and Council, who must agree before they become law. The EU already reduced charges for making and receiving calls abroad (voice roaming) by 60% in summer 2007.

“Europe, through its GSM standard, made mobile telephony attractive across the globe. It is now time to demonstrate that there is a truly single telecoms market in which consumers can use their mobile phone in all 27 EU countries without being punished when crossing a border," said José Manuel Barroso, President of the European Commission. "If we get this done quickly we will see tremendous growth in SMS and data services, and send a message that lower roaming charges can be a win-win situation for all."

Viviane Reding, EU Telecoms Commissioner, said: "Using your mobile phone abroad in the EU should not cost unjustifiably more than at home, whether for making calls, sending texts or surfing the Web. Europe's 37 million tourists and 110 million business travellers are waiting for the promise of the borderless single market to finally have a positive impact on their phone bills.”

EU Consumer Commissioner Kuneva said: "If Europe wants to deliver concrete results for its 500 million consumers, then practices whereby operators charge for a service which they do not deliver should not be acceptable. Today, consumers are overcharged by 24% on average for mobile calls they make abroad as roaming calls are very often charged not by the second, but only by the minute. A priority for us is fair treatment of consumers when they cross a border and this is why the Commission decided today to introduce the principle of per second billing for all roaming calls".

Text messaging is universally popular among EU citizens who in 2007 sent 2.5 billion SMS worth €800 million. It is particularly the young generation that communicates via SMS: 38% of the 15-24 year olds only text when abroad. But the cost of roaming texts can be ten times more than domestic texts and as high as €0.75 per SMS, for travellers from Belgium. A typical French customer sending a roaming text message from holidays in Italy this summer could pay up to €0.30, while a Czech tourist would pay up to €0.42 (10.00 CZK). In Spain, a Swedish holidaymaker could pay up to €0.40 (3.79 SEK) per message when roaming, a German €0.32, a Pole €0.47 (1.50 ZL), a tourist from the UK €0.63 (£0.40 GBP) and a Latvian even as much as €0.70 (0.49 LVL) per SMS. The Commission therefore proposes a retail cap of €0.11 on roaming text messages (excluding VAT), combined with a €0.04 cap at wholesale level. Wholesale prices are charged by one operator to another for a customer to send a message between their networks. Operators are encouraged to compete below these maximum price caps, set by the Commission after a detailed impact assessment with input from the European Regulators Group (ERG).

Roaming customers should also receive an automatic message with data roaming charges for the country they have entered. From summer 2010, consumers should be able to specify in advance how high their data roaming bill can go before the service is cut off – a measure designed to put an end to "bill shocks". These have led to customers receiving huge bills, in one case €40,000 for downloading a TV show over a roaming mobile line. In addition, a €1 per megabyte safeguard limit for wholesale fees should create a level playing field and stimulate competition.

Finally, the Commission wants price caps for roaming phone calls, introduced in 2007 (now at €0.46 for calls made abroad and €0.22 for calls received abroad), reduced to €0.34 for calls made abroad and to €0.10 for calls received abroad by 1 July 2012 (excluding VAT). Consumers would also benefit from per-second billing after 30 seconds for roaming calls made and per-second billing throughout calls received. Today, they pay 24% more than the minutes they use to make calls, and 19% more for received calls.

Background:

The EU Roaming Regulation of 2007 currently limits the amount operators can charge customers for roaming calls in other EU countries to €0.46 per minute for calls made abroad and to €0.22 per minute for calls received abroad (excluding VAT) (IP/08/1276). In 2005 – before the EU intervened – the average charge for a roaming call was €1.10 per minute.

Following a specific request of the European Parliament and Council, the EU Roaming Regulation requires the Commission to review the development of roaming calls, text messages and data services in 2008 and propose an extension if needed. In June 2008, a study showed that high prices (typically ranging from €5 to €10 per megabyte) and a lack of transparency were slowing the take up of data roaming services in the EU (IP/08/1048). In August 2008, the cost of sending a text message abroad was reported at €0.29 without any change compared to the situation one year ago, in spite of repeated calls from the Commission for industry self-regulation (IP/08/1144).

The Commission's proposal and impact assessment, along with a comprehensive guide to the cost of roaming in the 27 EU Member States, are available at:

http://ec.europa.eu/roaming