Kroes criticises carriers’ “outrageous” roaming charges

Less than a week after the European Commission enforced regulations requiring mobile operators to further cut roaming tariffs within the EU, Commissioner Neelie Kroes has said Brussels will now move to end what she termed “roaming rip-offs.” Speaking at a press conference at the Commission headquarters on Wednesday, Kroes announced a “fundamental new approach” that would increase competition in the market and lower prices for consumers.

Kroes said that, within the EU, competition between carriers was too weak, and that operators “still enjoy outrageous margins, particularly on data downloads.” Pointing to a tendency among many consumers to switch off their phones when they travel in order to avoid roaming charges, Kroes said that there was “simply no justification for huge mark-ups, just because you’ve crossed an invisible internal border that is supposed to have disappeared. And just because customers have little or no choice in the matter.” According to Kroes, some carriers charge consumers as much as €2 per MB of data when roaming, despite only charging each other “substantially less” than 50 cents. “This has got to stop,” she said.

According to the Commission, recent retail caps imposed on carriers were being treated as price floors because of the lack of competition. Rather than regulate prices “forever”, Kroes said the time had now come for the Commission to introduce “profound structural market changes” that would enforce competition, stimulating both supply and demand for roaming services. Proposals include making it easier for alternative operators to enter the roaming market and forcing them to grant access to providers from other member states at regulated wholesale prices. In addition, consumers should be given the right to choose alternative providers for EU-wide roaming, availing of lower prices while staying with their usual provider when in their home country. Under that proposal, Kroes said that consumers would be able to switch to their pre-selected provider when roaming, without having to change SIM cards or numbers.

The Commission is now proposing that, by July 2014, retail caps before VAT will include €0.50 per MB of data, €0.24 per minute for voice calls and €0.10 for a text message. These caps would remain in place until 2016 as a safety net by which time, Kroes said “structural measures to enhance competition will have delivered innovative pan-European roaming offers and cheaper prices significantly below the caps.”

The proposals must be agreed by the Council and European Parliament before they can take effect but Kroes said she was “sure we can count on the support of these institutions.”

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