Mobile companies are raided over 'price collusion'

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Brussels price probe deals new blow to beleaguered mobile phone sector

The headquarters of the UK's four mobile phone operators were raided yesterday by officials from the European Commission investigating allegations of price fixing.

The action was part of a co-ordinated series of unannounced visits to the premises of nine mobile operators in Britain and Germany. The investigation centres on suspicions that Vodafone, Orange, BT Cellnet, One2One and their German counterparts have been colluding to fix the prices that subscribers are charged for "roaming", using other operators' networks to make and receive calls when abroad.

If the allegations are proved, the companies could face fines equivalent to 10 per cent of their turnover. Last year Vodafone, the world's biggest mobile phone company, had sales of £21.5bn. Officials from the European Commission's cartel-busting division DG4 arrived at the offices of the nine companies at 9am yesterday and were still there late into the evening. Documents were removed from some of the companies and senior executives were interviewed.

A spokesman for the Office of Fair Trading confirmed that the European Commission investigators were accompanied by its officials, though the UK authorities are not directly involved in the investigation.

Brussels has been investigating charges for mobile roaming since January last year and yesterday it said this had resulted in "serious competition concerns regarding pricing practices ... that warrant further investigation".

A spokesman for the European competition commissioner, Mario Monti, added that roaming prices were "intransparent to consumers, rigid and at levels that are unrelated to the cost of carriage".

The raids are thought to have focused on operators in Britain and Germany specifically because these are the two biggest mobile phone markets in Europe and because there is a large overlap in ownership. Vodafone owns D2, Germany's second biggest mobile operator, Deutsche Telekom owns One2One as well as Germany's largest network D1, and BT Cellnet controls Germany's Viag Interkom.

Vodafone's flat-rate roaming scheme, Eurocall, charges subscribers 50p a minute when they are overseas, and between 2p and 25p in the UK. Orange charges 60p a minute for any call made from the European mainland and 30p a minute for any call received in Europe.

An executive at one British operator said: "There were no sledgehammers or battering rams and as far as I am aware, no documents have been taken away. I would find it extraordinary if they find any evidence of collusion among operators."

Another operator said: "It looks as if the raids were designed to add a bit of drama to an otherwise dull day."