Issue: 38/08

Dealing with the Roaming Rip-Off

October 1, 2008

The new EC proposal for reducing roaming prices for SMS, Voice and data services: Click Here

As required by the current roaming rules, the Commission and national regulators have closely monitored price developments for text messages and data services. On the basis of this monitoring, the Commission was asked to review the Regulation and to decide whether or not to include text messages and data services. Competition has not encouraged mobile operators to voluntarily reduce the very high roaming charges for text messages. Prices remain too high, especially compared to the actual costs incurred by operators.

The Commission therefore proposed on 23 September 2008:

• To bring down the prices for text messages sent while travelling in another EU country.

• To ensure that citizens are kept adequately informed of the charges that apply for data roaming services.

• Extend the scope and duration of the EU Roaming Regulation dealing with the high costs for voice roaming abroad in the single market.

The proposed amendments have been submitted to the European Parliament and to the Council, which must both agree before the proposal can become law.

What kind of changes are being proposed?

Euro-SMS Tariff introduced: from 1 July 2009 sending an SMS from abroad would cost no more than 11 cents (excluding VAT). Receiving an SMS in another EU country will remain free of charge.

Improved transparency: customers travelling to another Member State should receive an automated message of the charges that apply for data roaming services. On 1 July 2010, operators must provide customers with the opportunity to determine in advance how much they want to spend before the service is "cut-off".

Wholesale caps for data roaming: the Commission also proposed a €1 per megabyte safeguard limit for wholesale data roaming fees, to make them more predictable for operators, stimulate competition and enable even more transparent retail prices.

Further reductions on Eurotariff for voice calls: the prices for making calls would decrease from 43 cents on 1 July 2009, to 40 cents, 37 cents and 34 cents for each of the following years. The price for receiving a call would decrease from 19 cents on 1 July 2009 to 16 cents, 13 cents and 10 cents for each of the following years. Consumers would also benefit from per-second billing after 30 seconds for calls made, and per-second billing throughout for calls received to ensure that consumers do not face any ‘hidden costs’ when they are roaming. This is expected to increase consumers savings by over 20%.

ATUG’s submission on these issues to the House of Representatives Inquiry into International Roaming is here

Other submissions to the Inquiry are available here

ATUG wants true cost based prices for International Roaming services – voice, SMS and data. Operator agreements that drive wholesale prices way above cost do not meet this benchmark. These charges amount to an industry imposed tariff on communications services.

ATUG supports information and transparency on prices and is pleased to see some price reductions recently by some industry players but the core of our submission is that prices need to be reduced to competitive, cost based levels and that this will not happen without Government and regulator action.

But providing enough information to ensure consumers choose inconvenience is not the right outcome.

Industry promises of “any device, anywhere” can now be delivered and it is important that they are delivered at competitive prices.