Operators set out new roaming fees

UK mobile operators have outlined their revised European roaming tariffs after the rates were capped by the European Commission.

The European Commission recently decided to cap the rates at €0.49c/min for making such calls and €0.24c/min for receiving them (both these figures exclude VAT, so the maximum sterling rates including VAT would be 38p/min for outgoing calls and 19p/min for incoming calls). That decision, in turn, followed a lengthy and frequently ill-tempered battle between Viviane Reding, the commissioner for information society and media, and the mobile operators.

Under the European Commission ruling, operators have to advise all their customers of their new rates by the end of July, inviting those customers to then opt into the new rates. Those customers then have to start being charged at the new, lower rates by the end of August. By the end of September, all customers must be charged the new rates, whether or not they have opted in. The cap will also lower slightly over the next two years to end up, in the summer of 2009, at €0.43c/min for outgoing calls and €0.19c/min for incoming calls (VAT exclusive).

Three operators — Orange, Vodafone and T-Mobile — will be charging the maximum possible under the new regulations. Orange's new rates will take effect on 30 August and Vodafone's on 29 August, but T-Mobile has not yet set a date for its rate change.

O2 will be charging a slightly below-cap fee of 35p/min for outgoing calls and 18p/min for incoming calls. The operator will only make the capped tariffs automatically applicable to all its customers at the end of September, but customers who opt in will be able to start taking advantage of the lower rates from the end of this month at the latest, a spokesperson said on Thursday.

The lowest European roaming rates under the new regulations will come courtesy of 3 — the smallest of the UK operators — which announced on Thursday that it would be cutting its roaming charges to a level substantially lower than that called for by the Commission, with outbound calls priced at 25p/min and inbound calls at 10p/min. 3's cuts will take effect on 30 August.

"We're excited," said Kevin Russell, chief executive of 3 UK, on Thursday. "This is a great opportunity to remove another barrier between consumers' expectations and the reality of mobile pricing. We've always believed there's room to bring prices down and the EU has given us a level playing field to achieve it."

The cuts will come a year and a half after Reding first threatened operators with legislation to counteract the "fantasy costs" — at the time, as high as €5 (£3.40) per minute — they were imposing on their customers, although the Commission had been complaining about the costs since 2002. Since last year, operators have steadily lowered their prices in what many have seen as an attempt to ward off the legislation, but their efforts proved unsuccessful last month when the new rules were finally set in stone.

Operators had argued that a uniform cap on their charges would create a "straitjacket" that did not take account of local markets. This view was rejected by the Commission, as was the argument that high charges were needed to recoup the money invested by operators in subsidised handsets. Operators have, however, warned that their reduced income from internal European roaming may force them to charge more to visitors roaming into the EU.

On Wednesday the European Commission also abandoned its longstanding antitrust investigation into UK operators Vodafone and O2. The case had covered alleged abuses of market position in setting high roaming fees, but the Commission has now decided that the issue is redundant in light of its new roaming legislation.