EC to cap text-roaming costs

The cost of text messaging while abroad on the continent is to be cut drastically, the European Commission announced on Tuesday.

The Commission also warned that similar restrictions could be placed on data-roaming charges if operators do not voluntarily cut prices. Tuesday's announcement comes two years after restrictions were placed on roaming voice-call charges.

"The average cost of a roaming text message in the EU between October 2007 and March 2008 was €0.29 [23 pence], according to the European Regulators Group (ERG), but can be as high as €0.80 for travellers from Belgium," read a statement from the Commission. "Calls on the industry for self-regulation and voluntary reductions of roaming prices for text messages have not been answered. The Commission will, therefore, start working on measures to ensure that consumers benefit from a truly single market for mobile text services."

According to the Commission, the measures are likely to be formally proposed to the European Parliament and Council in early autumn.

José Manuel Barroso, the Commission's president, said the restrictions would be in line with the concept of the European single market. "On seeing the latest price trends gathered by national telecoms regulators, I am particularly concerned by the high prices paid by consumers for text messages when they are travelling abroad," he said. "There is also a danger that European businesses are put off by non-transparent roaming costs for mobile data services. The Commission will closely work together with the European Parliament and the Council to find swift responses to Europe's data-roaming problems."

"It is not a good sign for the competitiveness of Europe's mobile industry that it still hasn't got the message that credible price reductions are needed to avoid regulation," said Viviane Reding, the commissioner for information society and media. "I will, therefore, recommend to my fellow commissioners that we propose a regulation of SMS roaming in October."

The ERG itself welcomed the announcement. Its chairman, Dániel Pataki, said a cap of between €0.11 and €0.15 per SMS "would be appropriate". "On data roaming, we will have to continue to assess the need for additional regulation," he added. "We call on the industry to be vigilant on data-roaming prices so that price regulation can be ruled out in the future. The ERG is also concerned that lower wholesale charges for data roaming should be available to smaller and newer operators."

The Commission's announcement attracted a more tepid response from some operators. "We don't hear a great call from our customers for regulation or intervention for what is already a competitive market in terms of price," a Vodafone spokesperson complained. "SMS prices have already been falling [and] there are plenty of other commodities in the world where prices are rising."

Tom Phillips, chief government and regulatory affairs officer of the GSM Association, said the association's own analysis suggested that "the average price of SMS-roaming services in the EU has declined by 18 percent in the last year". "The Commission's proposals to single out yet another aspect of the mobile industry and apply retail price regulation, threatens to choke growth and stifle competition," he said.

The operator 3, however, welcomed the move and called for regulation to include data-roaming price restrictions. "It took the [Commission] to intervene on behalf of the consumer on voice roaming, and we're glad it intends to do the same on texts," said chief executive Kevin Russell. "We share the Commission's concerns that data prices remain too high and are a likely cause of bill shock. We are pleased to note that they are still looking closely at data roaming and the possibility of a wholesale safety net. Data roaming is rapidly becoming a big issue as sales of mobile-broadband modems soar, and it is absolutely logical that people want to take advantage of mobile access to the internet when they are travelling across Europe."

One week ago, 3 made its data-roaming services 'opt-in' so as to protect its customers from bill shock.