Thursday, 24 May 2007

EU Mobile Roaming Charges Confirmed

So, after long and difficult negotiations between the European Council, Commission and European Parliament, a compromised deal has been reached on the EU Roaming Regulation and Pricing. The new legislation was agreed by the European Commission, European Parliament and Council over ten months – undeniably, a record time.

On 23 May, the EU Parliament adopted, in its plenary session, and by a strong majority, the first compromise deal on new roaming charges. The EU Regulation will cap mobile roaming charges before the summer. According to the deal, the inter-operator tariff (wholesale charge), excluding VAT, will be capped at €0.30 per minute. This price cap (“Eurotariff”) will be further reduced in 2008 and 2009, to €0.28 and €0.26 respectively. The maximum retail charge, excluding VAT, for calls made abroad will be capped at €0.49 per minute and it will decrease by 3 eurocents per year. The maximum retail charge, excluding VAT, for calls received abroad will be capped at €0.24 per minute and will decrease by 2 eurocents in 2008 and 3 eurocents in 2009.

During the negotiations the most contentious issue was whether to decide to an “opt-in” or an “opt-out” model. Under the compromise deal adopted by the European Parliament, after the entry into force of the Regulation, mobile operators will have a month to make these price caps available to customers. The customers will have two months to decide if they want the new roaming tariff. However, if the customers do not react, they will get the eurotariff after two months.

However, the European Parliament also approved the so called “sunset clause” which means that the EU regulation will expire after three years. Therefore, it will be up to the Commission to consider if there is a need to propose a legislative act to extend this period.
The Transport, Telecommunications and Energy Council is expected to formally endorse the EU Roaming Regulation on 7 June. This regulation will be directly applicable in all EU Member States after its publication in the EU’s Official Journal.

However, if we look towards the effect such legislation will have on Mobile Phone operators, it should be noted that the EU Roaming Regulation is likely to lead to higher domestic costs (as well as other mobile services such as text messages).

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