Ombudsman looking into 02 complaint over EU roaming charges

The European Ombudsman has opened an inquiry into a complaint by British mobile phone company O2 about a European Commission probe into international roaming service charges, he announced Monday.

The aim of the enquiry by Ombudsman Nikiforos Diamandouros is "to determine if there has been maladministration by the Commission", his office said in a statement.

According to O2, the Commission did not grant it proper rights of defence in proceedings against it.

The Ombudsman has asked the Commission to respond to the company's allegations by the end of the year.

In July the European Commission unveiled plans to slash sky-high costs for making mobile phone calls abroad, defying fierce opposition from the telecoms industry.

The clampdown aims to halve so-called "roaming rates", which companies impose on consumers using their mobile phones when outside their home country.

Under the plans, the commission -- which gave operators six months to take action themselves before facing enforced measures -- will fix the wholesale rate that an operator can charge a foreign rival that uses its network.

It would also cap the retail rates that companies can impose, as well as the cost of calls received abroad.

The GSM Association, a trade association for mobile operators, has complained that the EU move will stifle competition.

According to O2, the Commission failed to grant the complainant proper rights of defence. O2 also criticises the Commission for failing to provide proper access to files and information as well as for failing to allow for a reasonable timeframe for responding to allegations.

Further allegations include the O2's "right to be heard properly".

"Given the high degree of public interest in this case, the Ombudsman feels it is important at this stage to explain the scope and nature of his inquiry," the ombudsman's statement said.

In July 2004, the Commission made a formal complaint against O2 and Vodafone over their international roaming rates.

The commission said other network operators were required to roam on Vodafone and O2's British networks in order to enable their own subscribers to use their mobile phones in Britain.

It said the two operators' high roaming fees were detrimental to consumers travelling to Britain .

On Monday European Commission spokesman Jonathan Todd said "we don't think the complaint is well-founded".

He said: "We have scrupulously respected their rights of defence in the case."

The European Ombudsman has no executive powers but can make recommendations seeking a resolution to problems of maladministration.

The O2 roaming charges mediation could be the first in a series.

The GSM association has announced that it will also take the matter up.