European Commission says mobile phone customers still get a raw deal when they cross borders
By Finfacts Team
Jul 6, 2011 - 2:19 PM

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Competition among European mobile phone operators is still very weak and customers still get a raw deal when they cross borders. Operators enjoy outrageous margins, particularly on data downloads, Neelie Kroes vice-president of the European Commission responsible for the Digital Agenda, said in a speech in Brussels today.

She said within a Single Market, there is simply no justification for huge mark-ups, just because you've crossed an invisible internal border that is supposed to have disappeared. And just because customers have little or no choice in the matter.

For example, people often pay over €2 per megabyte of data downloaded when roaming, whereas operators typically charge each other substantially less than 50 cents.

This has got to stop, Kroes said..

"We have already taken measures to protect the consumer against this and we have 'contained' the problem through price caps, wholesale and retail," she said. "And consumers are also better protected from unpleasant 'bill shocks' through the cut-off limit on data roaming."

The Commission is proposing that by July 2014, retail caps before VAT would reach:

  • 50 cents per megabyte of data

  • 24 cents per minute for a call made

  • 10 cents per minute for calls received and

  • 10 cents for a text.

These retail price caps would remain in place until 2016 as a safety net. Kroes said by then at the latest, the structural measures to enhance competition will have delivered innovative pan-European roaming offers and cheaper prices significantly below the caps.

The proposals must be agreed by Council and European Parliament before they can take effect. "I look forward to constructive debate with them, with a view to ensuring adoption of these proposals before the expiry of the current rules in June 2012," the commissioner said.

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