Roaming caps can stick, says key European legal advisor

Europe’s mobile operators saw their arguments against the implementation of roaming price caps subjugated on Thursday, after a key legal advisor to the European Court of Justice green lighted the proposals.

Four of Europe’s largest mobile phone operators – Vodafone, Telefónica O2, T-Mobile and Orange – had challenged the validity of the EC’s Roaming Regulation before the High Court of England and Wales. This court then asked the Court of Justice whether the EC’s regulation was in fact legal.

The Roaming Regulation established maximum prices that can be charged by mobile operators for calls received and made by a user outside their home network, and is based on 2007 proposals seeking to reduce roaming charges by up to 70 per cent.

In his assessment on behalf of the European Court, advocate general Miguel Poiares Maduro confirmed that the EC was entitled to adopt the Roaming Regulation.

“The differences in price between calls made within one’s own Member State and those made while roaming could reasonably be regarded as discouraging the use of cross-border services such as roaming,” he said.

“In these circumstances, imposing a price cap on roaming services can legitimately be said to be serving the establishment of the internal market by removing obstacles to cross-border economic activity.”

Maduro also confirmed that action at EC level was required, because national regulators have neither the power to regulate prices charged by foreign networks to networks from their Member State, nor the incentive to regulate wholesale prices charged within their territory to foreign networks. However, he contends that the issue of retail prices, charged by the home network to their roaming customer, is somewhat less clear, and suggests that once wholesale prices have been fixed, then retail prices could be regulated by national authorities.

However, Maduro considers that it was “expedient and appropriate for the Community to regulate retail prices” and notes that the EC intervened as a last resort.

The legal expert noted that some operators were making profits of above 200 per cent for calls made while roaming and of 300 per cent or 400 per cent for calls received, labelling this income as “excessive charges” and resulting in an acceptable and proportionate response from the EC.