By Chris Jones - 9th July 2006
Plans by Viviane Reding to force a consumer-friendly reduction in mobile call charges face growing opposition from within the European commission.
The EU media chief is due to unveil formal proposals for cutting the cost of roaming – international mobile telephone calls – on Wednesday, a move that has been widely trumpeted as a positive example of the EU’s influence.
But mobile telephone operators have complained that the home-pricing principle that Reding plans to introduce – which would see international calls charged at domestic rates – is flawed, and will lead to higher overall charges.
The GSM lobby has garnered some powerful allies within the European commission, with Günter Verheugen, Peter Mandelson and Charlie McCreevy all reported to be concerned at the impact of the proposals on the EU’s telecoms sector.
Although there is consensus among the 25 EU department heads that roaming charges need to be cut, the enterprise, trade and internal market commissioners are said to be concerned about the long-term impact of Reding’s headline-grabbing approach.
Mobile phone operators argue that the threat of action has already pushed down roaming charges considerably, and the three commissioners appear to share this view.
They are also thought to be worried about the risk of setting a precedent of the manipulation of retail prices by the commission – there are no other examples of such direct intervention in any other area of the internal market.
But Reding has the support of commission president José Manuel Barroso, who has highlighted the tough stance on cutting call charges as a good way of recovering a ‘feel good factor’ about the EU in the wake of last year’s constitutional no votes.
GSM operators believe that Reding is basing her assessment of the roaming market on erroneous figures, and that the commission’s website detailing roaming costs is misleading consumers.
They have launched their own website which they claim features the most up-to-date prices for pan-European calls and is far more accurate than the commission’s data.
The move is backed by the European regulators group, which represents national telecoms regulators and whose initial backing for Reding’s plans has waned.
“The ERG welcomes this initiative,” said Kip Meek, chair of the ERG. “Making prices more transparent is an important step towards making the international roaming market work and providing a better deal for consumers.”
Meek shared the podium with Reding when she first unveiled her roaming pricing proposals, and has backed plans for changes to wholesale roaming costs.
But the regulators are concerned that too much direct intervention over retail charges will distort the market, increasing costs elsewhere and leading to the end of other services such as free handsets or free call packages.
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