Roaming prices down but competition still not strong enough, says Commission report
Despite EU mobile operators reducing roaming charges in line with maximum price caps introduced by EU rules, consumers still do not enjoy significantly lower tariffs according to a European Commission report published today. Whilst price transparency has improved, the report concludes competition on the EU’s roaming market is not yet strong enough to provide better choice and even better rates to consumers.
Commission Vice President for the Digital Agenda Neelie Kroes said: “The cost of using mobile phones or devices when abroad in the EU has fallen continuously since the adoption of the first roaming rules. But three years since the rules came in most operators propose retail prices that hover around the maximum legal caps. More competition on the EU roaming market would provide better choice and even better rates to consumers.”
In the Commission’s view, EU rules give operators plenty of margin to offer more attractive roaming tariffs below the regulatory limits. Ultimately the Commission wants the difference between roaming and national tariffs to approach zero by 2015, in line with the objectives of the Digital Agenda for Europe.
For data roaming, the report confirms that wholesale prices have fallen to well below the EU maximum (1 euro – 85 pence – per MegaByte uploaded or download). Operators were charging each other an average of 55 cents (47 pence) per MegaByte at the end of 2009. Average consumer prices have also fallen, from 3.62 euro (3.08 pence) per MegaByte to 2.66 euro (2.26 pence) at the end of 2009.
The Commission expects operators to pass on savings at wholesale levels to consumers as lower retail prices, and will continue to monitor the markets.
The Commission’s analysis also shows that consumers are making more use of roaming services. Despite an estimated 12 per cent decline in travel, overall volumes of calls received and SMS sent while abroad in the EU have grown over the past two years.
Following the introduction of the EU-wide 11 cents (9 pence) SMS price cap, 20 per cent more text messages were sent in the summer of 2009, than in the previous summer.
Data roaming services grew by more than 40 per cent in volume terms in 2009. As smart phones and other hand-held devices become more widespread, this trend is expected to continue.
The Commission will review the 2009 roaming rules in full by the end of June 2011. It will assess whether their objectives have been achieved and whether the market for roaming services is working as it should — namely as a single digital market.
The cost for roaming calls has decreased by more than 70% since 2005 and sending a text message between EU member states costs 60% less.
Several UK mobile operators tried to challenge the EU’s Roaming Regulation in the EU Court of Justice. However, on 8 June 2010 the EU Court of Justice ruled that the Roaming Regulation was legally valid. The Court ruling confirmed the Commission’s view that the Regulation has a correct legal basis (the Treaty’s rules to ensure the correct functioning of the EU’s Internal Market), is proportionate to the objective of protecting consumers against high charges and is justified on grounds of subsidiarity (ie the same objective could not have been reached without a common approach at EU level).