'Roaming' charges: an obstacle to a Europe-wide mobile phone network
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Is EU legislation needed to stop exploitation of mobile phone users when 'roaming'? Telecommunications experts discussed the main issues with MEPs at a public hearing held on Wednesday by Parliament's Internal Market and Industry Committees. 'Roaming' means the use of mobile phones on foreign networks to make or receive calls or to transfer data. Among the problems: users may have to pay a large part of the cost of a call received from their home country when they are outside its borders.
Since 1998, reports by the International Telecommunication Users Group (INTUG) on excessive charges for 'roaming' calls have bemoaned this 'major problem'. They say the system operated in the EU is a 'veritable cartel' in comparison to the continent-wide tariff system in the United States. Current EU rules date from the 1990s and are no longer suited to a complex market where companies can exploit dominant positions. Single market logic dictates that it should be possible to use a mobile phone anywhere in Europe without higher charges but this is far from being the case.
Why do call charges rocket as soon as you cross a border? According to Dietrich BEESE, managing director of the O2 Group in Germany, it is foreign operators who set roaming prices and trigger higher charges. Profit margins for the operator in the home country are slim, owing to the costs incurred. Progress has been made since 2002, however, with agreements between operators and the introduction of new SIM cards. The 'preferred' operator in the foreign country is now selected automatically. That means that this obstacle to the 'mobility' of the European public has been reduced a little. But much remains to be done. The operators would prefer bilateral or even multilateral agreements in order to achieve the objectives set by the European Commission. In their view, pressure on the overall prices for services would make for a reduction in the prices paid by the consumer.
An opaque system
The European regulatory body COMREG (Commission for Communications Regulation) has nevertheless criticised the system's lack of clarity. Consumers are not provided with any information on roaming, and therefore have no choice but to put up with the system. Those familiar with the situation generally turn to alternatives, such as sending text messages (SMS), renting telephones in the foreign country or purchasing a second SIM card. David GUNNING, director of COMREG, stressed that roaming was all the more costly in cases of 'inadvertent roaming'. Small population centres close to borders posed a problem in terms of network coverage. In such cases operators were selected at random, regardless of whether they were national or foreign.
The European Commission has two instruments for regulating the market and enabling consumers to make clear choices: compliance with competition rules and compliance with the Parliament and Council framework directive in force since 2003. Reform of the telecommunications market is a priority for the Commission as it fits into the rationale behind the Lisbon Strategy. In his concluding remarks, Philip WHITEHEAD (PES, UK), who chaired the hearing, said that this market had for a long time been "a bone of contention" and that there was a need to put a stop to what was out-and-out "extortion". While the operators favour bilateral agreements, experts recommend that EU rules be introduced. Another meeting is to be held in May to assess progress and decide what steps to take next.