Cheaper roaming rates edging closer

The EU's150 million mobile phone users yesterday came a step closer to cheaper calls from abroad, after the European Parliament voted overwhelmingly to approve a deal reached between the Parliament and representatives of member states, last week.

All five Maltese MEPs voted in favour.

The deal now only needs a final approval by member states at the Telecommunication Council of Ministers, scheduled to meet on June 7.

Viviane Reding, European Commissioner for Information Society, immediately welcomed the vote by MEPs, saying "the EU is moving fast towards the dismantling of the last border in Europe's internal market, once and for all".

According to the agreement, roaming charges will be regulated for three years in the hope that by the time intervention ends, roaming tariffs will be lower and the market more competitive.

Labour MEP Joseph Muscat penned the report on the consumer protection aspect of this regulation.

Addressing a media conference in Strasbourg, Mr Muscat welcomed the vote as a significant victory for consumers because it effectively means halving roaming prices.

"We kept our word. Eighty per cent of European consumers will benefit from the new tariff automatically, while the remaining - most of whom are businesses and already pay competitive prices - will still have the right to request their operator to switch them to this tariff. This means that the rights of consumers, especially the most vulnerable one, will be protected," Mr Muscat said.

The average wholesale rate an EU operator can charge to a roaming customer's "home" operator for calls made abroad will be capped at €0.30 (13 cents) per minute. This will go down by €0.02 per year over the duration of the regulation.

Retail charges, the ones that will directly affect the consumer, will be capped at €0.49 (21 cents) per minute for calls made and €0.24 (10 cents) per minute for calls received, and will also be gradually reduced over three years.

Mobile phone users will have one month to switch to or from the EU tariff plan at no cost. After a further two months, customers who have not expressed a preference will be switched to the EU tariff.

The Commission will review the impact of the measures and report to the Parliament and member states within 18 months of the introduction of the changes.

Member states have been divided on this issue, with the UK, France, Spain and several newer entrants, including Malta, stressing the need to protect consumer choice and the need for the industry to cover the cost of providing the roaming service. On the other hand, Finland, Denmark and Poland have been pushing for tighter regulation. Mobile phone operators opposed the new rules and lobbied hard to try to limit the damage as much as possible.

In general, using a mobile phone abroad is, on average, four times higher than national calls and mobile networks make massive profits from the "roaming sector" of their business.

Although it is not yet clear when the new rules will come into force, the European Commission is insisting the new tariffs should start applying from this summer.

Contacted yesterday, a spokesman for Go Mobile said the company was closely monitoring the situation. "We will be analysing the implications of this new development with a keen eye and we will evaluate the various options available to us with a view to lowering our international roaming rates once the announced reductions come into play," she said, adding that an announcement about this would be made in due course.

A spokesman for Vodafone Malta said that, unfortunately, the retail and wholesale rates agreed by the European Parliament do not safeguard the interests of small operators because cost structures to provide roaming services were different to those of much larger European operators.

Of particular impact on small operators like Vodafone Malta would be the wholesale rate, which accounts for 80 per cent of the company's roaming revenues, she said.

Vodafone Malta customers had already seen roaming services costs drop by an average of 40 per cent since April 1, she added. The euro tariff was less attractive than Vodafone Malta's Travel Promise, launched in the summer of 2005, and customers who had already chosen that tariff would not be forced to switch. She said customers could already receive roaming tariff information when they travel abroad.

"Vodafone believes that this kind of transparency helps customers decide for themselves the best way they can use roaming services. The transparency measures proposed by the European Parliament are already largely in place for Vodafone customers."