Mobile phone call charges slashed for travellers

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The Independent Tech

More price cuts for using mobile phones abroad were announced by the European Commission today - hours after four of Europe's largest mobile network operators lost their legal battle to stop Brussels interfering.

The European Court of Justice rejected a claim by Vodafone, Telefonica O2, T-Mobile and Orange, that the Commission exceeded its powers by imposing a uniform maximum "roaming" charge across Europe, slashing by up to 60% the prices of making and taking mobile calls while in another member state.

But the Luxembourg judges said the Commission was right to intervene in the interests of a competitive EU single market and "to protect consumers against excessive prices ... even if it might have negative economic consequences for certain operators."

The judgment said that high level of retail charges had been regarded as "a persistent problem" by public authorities and consumer protection associations throughout the EU, but efforts to solve the problem without changing existing rules "had not had the effect of lowering charges."

Compulsory maximum roaming rates came into force two years ago to tackle what EU Telecoms Commissioner Viviane Reding called the "roaming rip-off" - mobile network operators were said to be making profits of more than 200% for mobile calls made while in another EU country, and 300% or 400% for calls received.

Ms Reding acted after warning the mobile phone industry that she was not satisfied with voluntary agreements to keep prices in check.

The result was one of the most popular consumer-driven moves by the EU - an average 60% cut in the maximum charges operators could levy on mobile users making or receiving calls while in another EU country.

The maximum charge for making a mobile call while abroad was set at 38p per minute, with a cap of 18p a minute for receiving calls, and 10p for sending a text message while abroad.

The four big mobile operators went to court in the UK challenging the validity of the move at EU level. The High Court then asked the European Court of Justice to rule on whether the EU had acted correctly.

In the meantime charges were cut again, to 35.5p a minute to make calls abroad and to 15.5p a minute to receive calls.

This afternoon the Commission welcomed the European Court verdict supporting its efforts - and promptly declared that it was cutting the permitted maximum roaming charges even further.

The new maximum tariffs will apply from July 1, just in time for holidaymakers to benefit from the lower rates.

The maximum permitted charge for making a mobile call while abroad will fall to 32p a minute and the rate for receiving calls to 12.5p a minute.

A Commission statement said that from July 1 operators will also be obliged to apply an automatic 50 euro (£41.50) cut-off limit on accounts if the customer has not stipulated their own limit.

This is to protect against "bill shocks" for surfing the Internet with mobiles and laptops while travelling in other EU countries.

The statement said: "Consumers can now move around Europe without being afraid to turn on their mobile phones.

"The differences in national mobile charges and roaming charges illustrate the lack of a single market in telecoms services.

"Since the costs of providing roaming services should not be substantially different from those incurred when providing domestic mobile services, there is no justification, in a competitive market, charging customers considerably higher prices for roaming services".

The Commission will be looking at its roaming rules again in a review next June, when there may be even more price cuts.

And the ultimate goal, said the statement, is to reduce the difference in domestic and roaming tariffs to virtually zero by 2015.

Fine Gael MEP Sean Kelly commented: "The European Court of Justice Court has shown that when the EU moves to protect the consumer it will back it up. We were all at the mercy of these companies when we travelled abroad but now action by the EU has put a stop to this.

"I am confident that the Commission intends to take further measures to reduce the costs of using a mobile phone for consumers when they travel to other EU member states.

"We need to get to a stage where we have a single EU mobile market and no roaming charges at all".

Arlene McCarthy, the Labour MEP who steered the mobile roaming rules through the European Parliament, said: "Today's judgment shows we were right to act against excessive charges by mobile operators.

"It is now time for the operators to show that they have learned their lesson and will charge fair, competitive prices. The operators should give consumers a fair deal, not try to wreck laws that we had to introduce to protect our constituents."

Fellow Labour MEP Catherine Stihler added: "Mobile phone companies were given ample opportunity to act on the cost of using phones abroad, but in the end it took EU action to bring prices down."