The cost of using a mobile phone abroad in the European Union could be halved next year under proposals outlined today which will see operators taking a cut in profits.
As part of plans to crack down on high charges for mobile users abroad the European Commission is to consider a price cap on wholesale roaming charges for mobile phone calls made within the European Union.
The Commission wants to regulate wholesale roaming charges - levied between operators - and retail roaming charges, or the cost the consumer has to pay.
Proposal put forward today by the European Regulatory Group (ETRG), which advises the Commission on telecoms issues, would see prices more than halved from the current rate of 70 to 80 cent a minute to a basic rate of 30 cent.
The EU executive estimates that revenues from international roaming charges total €10 billion, and that regulation would save the consumer between 40% and 60% on mobile calls abroad.
The profit on receiving calls abroad is between 90% and 100% for operators, the EU executive said.
The European Commission said it had given industry plenty of time to cut prices but that it had failed to listen.
Telecoms shares fell in Europe on the news, with Vodafone closing down 4% in London as analysts said the EU plans could hit earnings in the sector.
The EU executive said the new regulation would be proposed in June and would need approval from member states and the European Parliament to become law, possibly by the summer of 2007.
In response Vodafone said it shares the Commission's desire that roaming costs be transparent and easy to understand and that its roaming service - Vodafone Passport - has a fixed fee plus normal home tariff structure, which shows roamers much they pay.
Vodafone said it experienced regulation of wholesale roaming prices over its acquisition of Mannesmann in 2000 when the Commission required Vodafone to offer non-discriminatory wholesale roaming prices to its competitors and discouraged the company from launching services such as Passport until the regulation expired.
O2 Ireland said there are already significant competitive pressures on roaming services in Ireland and Europe, which have seen prices fall for consumers.
The company said regulatory intervention risks preventing operators from continuing to innovate in pricing, which is critical for a competitive environment. O2 said the group have been negotiating lower wholesale international roaming charges across Europe, so that they can offer lower prices.
Vodafone has already announced the end of roaming charges here for its customers who visit Northern Ireland and Britain. O2 also scrapped roaming charges in the North and for business customers in the UK, with 3Ireland also getting rid of roaming charges in the North and the UK.
