In a fresh declaration of war against phone companies, European heads of government backed Irish-led calls for an investigation into phone costs for travellers.
At a summit in Brussels, the EU leaders promised to investigate the possibility of eliminating all charges. The pledge from the Austrian presidency of the EU provoked a sharp response from operators, who described it as unnecessary interference.
Analysts said EU plans could affect mobile operators such as Vodafone. The team at CSFB noted that the scope for cuts was large, given that roaming rates are, on average, five times higher than domestic rates. CSFB predicted that roaming rates would fall by more than 22 per cent this year and by another quarter next year and in 2008. The news weighed on shares in Vodafone, Europe's largest mobile operator, which slipped 1 per cent to 125.5p.
At yesterday's summit the Irish prime minister Bertie Ahern argued that the charges are excessively costly, adding: "Roaming charges are are an unnecessary evil which we think should be scrapped." Mr Ahern said the rest of Europe should follow Ireland's example in pressing mobile phone companies to cut charges, or even to abolish them completely.
The idea is seen as one way of demonstrating that the EU can deliver concrete benefits to consumers, including young people.
Mr Ahern said he had convinced two Irish mobile phone companies to change their price structures, charging one fee for all calls both north and south of the Irish border. The government in Dublin acted after residents in border areas complained of huge increases when their phone signal picked up a foreign network.
But David Pringle, a spokesman for GSM Europe which represents operators such as Vodafone, described the move as an "extra layer of regulation which is unnecessary".
The European Commission has long targeted phone companies for charging "unjustifiably high" roaming charges, and will put forward new moves this week to curb charges. However, the Irish government believes these proposals do not go far enough.
The Commission launched a website last year to name and shame the companies who charge travellers excessive fees to use a mobile phone outside their country.
EU competition regulators started investigating "excessive" roaming prices in 2000, leading to cases against German and British phone companies for abusing their monopoly power.
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