EU votes in favour of roaming cap

A committee of the European Parliament has backed proposals to cap roaming charges for mobile calls made abroad, voting in favour of a Eur40 cents (£0.27) per minute ceiling for an outgoing call and Eur15 cents (£0.10) per minute for an incoming call.

The EU executive had stated previously that it wanted a ceiling of Eur50 cents (£0.34) per minute for an outgoing call and Eur25 cents (£0.17) per minute for an incoming call.

With Thursday’s vote over, the proposal will be put in front of the full EU assembly in May which will decide whether a cap on roaming charges should be automatic, or require customers to request it from their operators. The Industry Committee today called for an automatic solution but the Internal Market and Consumer Protection Committee, as well as some EU states, want consumers to have to ‘opt in’ to receive the lower charges.

Analyst, Lars Godell of Forrester, told that in the short term, operators face some pain with today’s decision “but they should be counting themselves lucky they have got away with extortionate pricing for so long”.

On Wednesday the GSMA expressed fears that retail price caps would give operators “no scope to compete and force them to apply tariffs that are below costs”. It says roaming caps will stifle innovation. “At a time when Europe is trying to stimulate investment and innovation, these inappropriate and inconsistent proposals are becoming increasingly removed from the economic realities of the mobile market,” said Rob Conway, CEO of the GSMA.

But Godell rejects the GSMA’s argument suggesting that if regulation hadn’t taken away the kind of profits made on roaming charges, technology would have: “In the end you have VoIP, wifi and so on, all eating into [operator] profits… the industry has been living on this pie in the sky for too long and now it is over. The operators need to allow other, external businesses to innovate, rather than trying to do it all themselves,” he said.

If EU members fail to agree on key details in the May vote, parliament could be required to vote again which could cause significant delays.

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