European telcos agree to reduce roaming charges to ward off regulation

Europeans traveling abroad will be able to send text messages and use mobile Internet services with reduced prices just in time for the summer travel season, thanks to the European Union's chief telecom lawmaker.

During the Mobile World Congress event in Barcelona yesterday, Information Society and Media Commissioner Viviane Reding gave mobile phone carrier executives a stern warning regarding the pricing of text messages and data plans when consumers are roaming in other nations. Comm. Reding spoke with executives of several major European telecom companies about the pricing issues.

To help stave off EU intervention, Deutsche Telekom, Vodafone and Dutch KPN have agreed to reduce prices for their data roaming plans.

Reding's comments echoed the tone of a speech one week earlier: "What we want to achieve is simple: Sending text messages or downloading other data via a mobile phone while being in another EU country should not be substantially more expensive for a consumer than sending text messages or downloading data at home," she said. "This is the logic of the borderless single market which we in Europe already agreed to create 50 years ago."

As things stand today, British phone users spend $0.11 per text message, but could pay as much as $0.40 per text message once they step outside the United Kingdom. Most text messages in the EU cost between 5 to 10 euro cents each, but tend to rise to a new level from 29 cents to 50 cents when outside the user's nation.

EC officials will re-examine text message roaming prices on July 1 before approaching the European Parliament and Council of Ministers to help draft new pricing legislation. If a price cap has to be enacted, Reding said it would be at the retail price point, helping consumers pay a fair price even when in a foreign nation.

European telcos are well aware of the axe hanging precariously over their heads should they fail to reach an amicable, appreciable agreement. Last November, Comm. Reding threatened telcos with legislation that could split each of them into separate phone and Internet business units -- legislation that is still officially under consideration. And at CES 2008 last month, the commissioner appeared on a panel to make it clear that when private industries can't come to a decision about standards for themselves, she's happy to make the decision for them.

Although last week, she tried to show more reluctance than happiness to take that course. "I have no appetite at all for regulating again," she said. "But to avoid regulation, the industry will have to show its responsiveness to consumer concerns by credible reductions of the cost for data roaming both at the wholesale and at the retail level and by transparent offers compatible with the spirit of the single market."