Vodafone and mmO<SUB>2</SUB> rapped over charges

Click to follow
The Independent Online

Vodafone and mmO 2 were criticised yesterday for over-charging foreign users to connect to their networks, as European regulators sought to clamp down on profiteering by mobile phone operators.

Vodafone and mmO 2 were criticised yesterday for over-charging foreign users to connect to their networks, as European regulators sought to clamp down on profiteering by mobile phone operators.

The two British firms were sent formal "statements of objections" by the European Commission after a lengthy inquiry into the "roaming" fees the mobile operators charge overseas customers visiting the UK.

The move is the culmination of an investigation that became public three years ago when EU regulators raided nine mobile phone companies in Britain and Germany looking for evidence that companies were overcharging.

Yesterday, the Commission said their inquiries had prompted them to concentrate their efforts on the UK and, to a lesser extent, Germany. "The results show that the problem is focused in these two countries," Tilman Lüder, a spokesman for the European Competition Commissioner Mario Monti, said.

Vodafone shares fell 2.25p to 114p in London and mmO 2's shares were down 1.25p at 84.25p. Roaming fees make up no more than 15 per cent of sales, although that still equates to billions of pounds' worth of revenue. Though both companies could face fines for abusing their dominant market position, they are more likely to be told to change their charging structure.

In London, a spokesman for mm0 2, Simon Gordon, said the company would "vigorously defend ourselves" against any "allegations of anti-competitiveness". A Vodafone spokesman said the company would also be responding to the Commission. Both companies have the opportunity to respond to the Commission's findings in writing and in an oral hearing. If they fail to satisfy the objections made by Brussels, they will face a direct call to "cease and desist".

In its investigation, the Commission found that tariffs applied by Vodafone and mm0 2 to other networks yielded profits "several times higher" than comparable services.In addition, the pricing of roaming calls "exceeded by far the prices" that both applied to similar calls made by subscribers of other mobile service providers in the UK.

Comments