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EU cuts the cost of texting and mobile data services abroad - briefing

01 July 2009
by eub2 -- last modified 01 July 2009

As of today, sending a text message from abroad in the EU costs a maximum EUR 0.11, almost three times cheaper than the previous EU average of EUR 0.28 (excl. VAT). To make a roamed call in another EU country must not cost more than EUR 0.43 per minute, and no more than EUR 0.19 to receive a call. From today, outgoing roaming calls will be charged by the second, after the first 30 seconds, rather than by the minute, and incoming calls will be charged by the second from the first second. Holidaymakers and business travellers can also surf the web, download movies or send photos with their mobile without fear of ‘bill shocks’ while roaming thanks to a wholesale cap of EUR 1 per megabyte (MB) downloaded. All these measures are expected to cut roaming charges for EU consumers by a further 60% and increase mobile phone use. The EU first acted on roaming in 2007 reducing the cost of voice roaming calls by 70%.


How will EU citizens benefit as of today?



Effective immediately, the new EU roaming rules will:


    * introduce a 'Euro-SMS tariff' limiting the price that consumers can be charged for sending a text message while abroad to EUR 0.11 excluding VAT (compared to an average of EUR 0.28 today),

    * reduce the cost of surfing the web or downloading movies with a mobile phone while abroad by introducing a wholesale cap of EUR 1 per MB downloaded,

    * protect consumers from 'bill shocks' by ensuring they receive an SMS about how much it will cost to surf the net via their mobiles when they roam. In addition, from March 2010, operators must introduce a cut-off limit mechanism once the bill reaches EUR 50 unless the consumer chooses a different limit offered by the operator),

    * further reduce price caps for mobile roaming calls to EUR 0.43 for calls made abroad and EUR 0.19 for calls received abroad (per minute and excluding VAT),

    * introduce the principle of per-second billing after the first 30 seconds for outgoing calls and after the first second for incoming calls, which is expected to cut bills by as much as 24%.


Why was the EU Regulation on roaming extended to include text messages?



The EU Roaming Regulation which entered into force on 30 June 2007 ( IP/07/986 ) introduced limits to the wholesale and retail charges for roaming voice calls to ensure the proper functioning of the single market and a high level of consumer protection. These limits were until 30 June 2009 EUR 0.46 for all calls made abroad and EUR 0.22 for all calls received abroad and are now at EUR 0.43 for calls made abroad and EUR 0.19 for calls received abroad.


Following a specific request from the European Parliament and Council of Telecoms Ministers, Article 11 of the EU's Roaming Regulation required the Commission to review the Regulation in the course of 2008 and to decide whether or not to extend it in time and scope, and to roaming text messages and data services in particular.


During this compulsory 2008 review, the Commission considered input from the operators themselves, the European Regulators Group (ERG), which gathers the 27 national telecoms regulators and several other studies and stakeholders. A public consultation took place form 7 May to 2 July 2008.


The Commission had initially hoped that mobile operators would demonstrate their willingness to voluntarily reduce the very high roaming charges for text messages and data. In February 2008, Commissioner Viviane Reding gave mobile operators a last chance to avoid regulation by asking them to voluntarily and credibly bring the prices for text messages down by 1 July 2008.


However, figures collected by the ERG show that prices for text messages have remained very high (on average EUR 0.28 per SMS) and have shown little movement over the past years despite political pressure. This is why additional regulatory intervention was required, in the interest of the single market.


Euro-SMS tariff



How much will it cost as of today to send a text messages from abroad?



It will cost no more than EUR 0.11 (excluding VAT) to send a text message while abroad, compared to a current average of EUR 0.28. This is a price cap, so consumers can expect the cost of texts to be below this ceiling as operators compete with each other to make the best offer. Receiving an SMS in another EU country will remain free of charge.


How high were the prices for sending text messages while roaming before today?



Using your mobile phone to send text messages (SMS) from abroad was up to 10 times more expensive than for sending a message at home. This was demonstrated by responses to the European Commission's public consultation of July 2008, by the European Regulators Group and a specific study by the Danish National Regulatory Authority . For example, up to today customers from the Netherlands and Portugal have been paying more than EUR 0.35 for each SMS sent while roaming.


Data roaming



Will I be able to surf the web when abroad without worrying about high prices?



Starting today, the cost of surfing the web and downloading movies or video programs with a mobile phone while abroad will fall, thanks to a wholesale cap of EUR 1 per megabyte downloaded. ( 1 MB allows approximately 200 e-mails without attachments or less than an hour of browsing time, but only 1 minute of MP3 compressed music.) Until now, the EU's average wholesale price was EUR 1.68 per megabyte downloaded, with peaks in Ireland (EUR 6.82), Greece (EUR 5.30) and Estonia (EUR 5.10).


From March 2010, the new rules will protect consumers from 'bill shocks' by introducing a cut-off mechanism which will cut consumers' mobile connection to the internet when their bill reaches a specified limit. Operators must offer their customers a monthly cut-off limit of EUR 50. They can also offer customers any other limit. Customers that do not make a choice by 1 July 2010 will have the cut-off limit set at EUR 50 by default.


This will ensure that consumers will no longer face shock bills such as a recent example when a German customer roaming in France was faced with a bill of EUR 46,000 for downloading a TV programme. Operators will have until March 2010 to put the cut-off mechanism in place.

How much were consumers paying until today for data roaming in the EU?



Up until now, consumer prices for data services ranged from EUR 0.25 per megabyte (MB) in a number of Member States as part of a bundled offer (e.g. using the full allocation of a daily package which allows you a maximum amount of MB downloaded at a fixed price) to over EUR 15/MB in Austria, Estonia, Belgium, Slovenia, Italy and Ireland for unbundled standard offers . As a result, the use of data roaming services remained limited as consumers were discouraged by extremely high charges compared to national prices, and also due to a lack of transparency regarding the charging by volume of data (megabytes).


High-volume users were susceptible to 'bill shocks' if, for example, they surfed the internet for long periods when using their datacard connection on a laptop computer.


Will it become even cheaper to surf the web when abroad in the future?



Thanks to the new rules the price that operators pay per megabyte downloaded will fall over the next two years to EUR 0.80 in 2010 and to EUR 0.50 in 2011.These savings should be passed on to consumers.

Why will only wholesale tariffs for data services be regulated?



As of today, the highest charge an operator will pay for 1MB of data services is EUR 1. This has been introduced as a safeguard limit and to eliminate very high charges for data services. However, it encourages mobile operators to continue to work to bring prices down.


The Commission will, from today, start to monitor the retail prices of data services and to ensure that operators pass on these savings to consumers. It will have to report to the European Parliament and Council by next year and then come up with proposals in two years time.


How can I find out what I will pay for roaming data services while abroad?



Consumers will receive information on what they will pay for data services as the new rules requires mobile operators to provide (via a text message) free, country-specific information on roaming charges to their customers when they enter another Member State.


Even cheaper calls to and from your mobile when abroad


How high were the prices for roaming phone calls until today?



Until 30 June 2007, using your mobile phone abroad was on average four times higher than national mobile calls . The average rate for making a call from abroad was EUR 1.15 per minute ( IP/06/978 ). The EU Roaming Regulation introduced the 'Eurotariff' (price caps) bringing down mobile roaming charges up to 60%. Today, the Eurotariff is the default price offer for roaming in the EU. It is charged at EUR 0.43 per minute for making a call and EUR 0.19 per minute for receiving a call.


Do the new rules mean even lower prices for phone calls while abroad?



Starting today, it will cost only EUR 0.43 per minute to make a phone call from your mobile phone when abroad. The prices will continue fall over the next two years to EUR 0.39 on 1 July 2010 and to EUR 0.35 by 1 July 2011 (all prices per minute, excluding VAT).


It will also be much cheaper to receive a call starting today: only EUR 0.19 per minute. These price caps will also fall in the following years to EUR 0.15 on 1 July 2010 and EUR 0.11 on 1 July 2011 (all prices per minute, excluding VAT).


Up until yesterday (30 June 2009) the rate was EUR 0.46 per minute for calls made and EUR 0.22 for calls received abroad.


Will I be charged per second, or per minute for the calls I make or receive when roaming?



The new rules mean that from today, EU consumers will be billed per-second after 30 seconds for roamed calls made and from the very first second for calls received while abroad.


The European Regulators Group has found that under per-minute billing practices, consumers were paying 24% more than the minutes they actually used to make calls, and 19% more for calls they received. The new rules ensure that consumers are only charged for the service they actually use and are expected to cut phone bills by as much as 24%.


What is roaming?



Whenever you travel abroad and make or receive a mobile phone call, send text messages (SMS - Short Message Services) or download data (for electronic mails, surfing the web, photos, music, films) from the internet using a mobile connection, you are roaming. You are roaming on a mobile network of a foreign network operator because your home provider does not provide the service in the country in which you are travelling. For providing this service, the foreign network operator will charge your home operator. This charge, known as the wholesale charge, is passed on to you at a different rate, sometimes at a surprisingly high level for the consumer.


What is an EU Regulation? Does it have to be implemented nationally?



EU Regulations are legal acts that are directly applicable in the 27 EU Member States the day after their publication in the Official Journal of the European Union. Unlike an EU Directive, an EU Regulation does not need to be implemented into national law, but is the law throughout the EU from the day of its publication.


EU Regulation are thus instruments for achieving swift and uniform solutions in the interests of the EU's single market, legal certainty and concrete consumer benefits.


The EU Roaming Regulation specifically applies to mobile operators in the EU, and is monitored by national regulatory authorities in the EU Member States and the European Commission itself.


To amend an EU Regulation or to extend its scope, the Commission has to make a proposal upon which the European Parliament and the Council of Ministers have to agree to make it law.


Why was an EU regulation necessary? Couldn't the problem of high roaming charges have been tackled through the electronic communications framework or competition rules?



The European Commission proposed the first regulation on roaming , which entered into force in 2007, because national telecoms regulators were unable to tackle the problem on their own because roaming is a cross border service. National regulators only had the tools to tackle the problem at the wholesale level at the national level, by limiting the prices operators in their country charged operators in other countries whose consumers were using their network. For this reason, all the EU's national regulators asked the Commission to act on behalf of European consumers. However, doing this would not necessarily allow customers from their own country to benefit from lower roaming prices, because these prices depend on the wholesale charge set by operators in other countries, and on the final price the consumer's own operator charges its customers.


It should be remembered that both in 2007 and in 2009, the European Commission tried to avoid the need for regulation by calling on operators to voluntarily bring prices down. However, prices still remained unjustifiably high resulting in the Commission's decision to propose an amended regulation.


European Commission roaming website

Source: European Commission

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