Vodafone Acts On Roaming Charges Following Proposed EU Regulation

by Ulrika Lomas, for LawAndTax-News.com, Brussels

09 May 2006

Vodafone announced on Monday that average European roaming costs for Vodafone customers will be cut by at least 40% by April 2007, when compared to last summer. This will mean that the over 30 million Vodafone customers who travel in Europe every year will see the average cost of roaming in Europe fall from over EUR 0.90 to less than EUR 0.55 per minute.

Vodafone also announced that it will enter into reciprocal wholesale arrangements with any other European operator at no more than EUR 0.45 per minute for voice calls within the EU from October 2006. This will enable both Vodafone and other European mobile operators to continue to lower the cost of roaming to customers outside of their own networks.

Arun Sarin, Vodafone chief executive explained that:

"The European Commission and European Parliament have made it clear that they expect to see change. Our announcement today shows that the market, led by Vodafone, is meeting those expectations by providing what our customers tell us they want. Also, by addressing both retail and wholesale prices, we are providing a platform for sustainable, lower retail prices across Europe in the future."

"We understand the powerful appeal that roaming has in the aspiration for a Europe in which people can travel, live, move, work and invest freely. We believe the market is the best way to meet customer needs, not regulation".

Earlier this year, the European Commission released figures which revealed that the price for a standard four-minute call had generally remained at the same high level across Europe since September 2005, and in some cases had even increased, despite warnings from the Commission to the industry that EU-wide regulation would be necessary if prices were not brought down.

“It is high time that the EU’s internal market delivered substantially lower communication charges for consumers and business people traveling abroad," explained Information Society and Media Commissioner Viviane Reding in late March.

“I therefore propose that an EU regulation be used to eliminate all unjustified roaming charges. A mobile phone customer should not be charged a higher tariff just because he is travelling abroad.”

Commissioner Reding then went on to outline the main elements of the proposed regulation. These were:

• The new EU regulation should in any event address inter-operator tariffs (wholesale prices). The EU regulation would ensure that operators do not charge operators from other countries substantially more than the actual cost.
• To ensure that operator savings at the wholesale level are actually passed on to the consumer, the Commission sees also a need for regulation at the retail level.
• The new EU regulation could in particular eliminate all roaming charges for receiving a call when traveling abroad in the EU.
• In addition, for calls made while travelling abroad in the EU, the new EU regulation could introduce the “home pricing” principle. A mobile customer travelling abroad in the EU would always be charged only the prices that he is used to paying in his country of residence: he would either pay a local tariff when making a local call, regardless of where he is traveling in the EU (e.g. for calling a cab while traveling in Madrid); or a normal international tariff for calls made to EU destinations, regardless of where he is traveling in the EU (e.g. for calling the family back home while on holidays).
  The Commission has already held a first phase of consultations on the general idea of an EU regulation on international roaming.

On the basis of the outline of the proposed EU regulation, the consultation went into a second phase on 3 April, which closed on 28 April. Following a detailed impact assessment, and subject to the approval of the European Parliament and the Council of Ministers, the Commission could adopt the proposal in June.

Recommended