Mobile operators shamed in Brussels

Mobile phone operators have cut charges for services to other European countries by almost as much as three quarters in recent years, but only because they were told to.

A report by the European Commission today tells how the mobile market is so well tied up by just a few operators that none of them is pressured to compete with one another on price for roaming (or trans-European) services. They have typically kept their charges to just within the maximum limit designated by the EC in 2007.

Some of the largest mobile operators were so riled by EC preparations to limit their charges that they took the case to the UK's High Court, and then to the European Court of Justice.

Vodafone, Telefonica O2, T-Mobile and Orange wanted to defend their right to charge as much money as their tremendous weight allowed them. But the European Court said the EC had every right to put them in their place. The operators had argued that no European agency should tell them what to do. But the court found that the European Commission could tell operators to cut their prices when it was for the greater benefit of all Europeans. Reduced roaming charges would never have been possible were there not a European authority to order them.

The EC aims to scrap the difference between national mobile rates and those charged for services between European countries. National and roaming calls will be the same by 2015.

Today's Commission report (.pdf), meanwhile, notes that roaming call charges have been cut 70 per cent since 2005 and the cost of texting between European Union countries has fallen by 60 per cent. But operators charge little less than they are told, which is the most they can get away with.

The latest price cap (excluding VAT) will bring the cost of a roaming voice call to €0.39 per minute. Texts are caped at €0.11 each.

Only data charges have fallen below significantly below the regulated level. The EC forbids mobile operators from charging one another more than €1 per Megabyte of data transmitted between countries on behalf of their customers. By the end of 2009 they were charging one another €0.55 per Megabyte on average, while charging consumers an average
€2.66.

The EC brings the cap down to €0.80 in July.