Monday, June 3, 2013

Commissioner Seeks End to Roaming Fees in Europe

Ms. Kroes, the European commissioner for digital policies, told members of the European Parliament’s Internal Market and Consumer Protection Committee, “I want you to be able to go back to your constituents and say that you were able to end mobile roaming costs.”

The speech was the latest effort by Ms. Kroes, a Dutch economist and former European Union antitrust chief, to fundamentally redefine the rules of the union’s telecommunications market. In theory, the market is a single economic zone. But in reality, it is a patchwork of 27 national markets where operators charge people fees whenever they cross a border with their smartphones.

Because competition has made basic mobile phone service relatively inexpensive in Europe compared with other developed countries, the roaming fees are a profitable part of network operators’ businesses. As a result, the European Parliament is expected to face heavy lobbying from the telecommunications industry against the proposal.

The association representing Europe’s largest phone operators, the European Telecommunications Network Operators’ Association, said that lawmakers should further deregulate the telecommunications market before considering an end to roaming fees.

The group said in a statement Thursday that the industry needed “a much less intrusive and a simplified regulatory framework, which will facilitate new investments and pave the way towards a digital single market.”

Ms. Kroes earned the nickname “Steely Neelie” for her hard-charging approach to regulation during her previous job in Brussels. As the bloc’s competition commissioner, she imposed a $1 billion penalty on Microsoft in 2008 as part of a decade-long battle over the way the software giant used its Windows computer operating system to curtail competition. She also went after Oracle and Intel, and gave Google a close examination on its proposal to buy DoubleClick.

Yet Ms. Kroes has a friendly and informal manner, and she prides herself on real-world business experience, having sat on numerous corporate boards before joining the European Commission.

Smaller operators fear that Ms. Kroes’s single-market proposal could extend the dominant influence of the big operator groups — Vodafone, Telefónica, Deutsche Telekom and France Télécom — from isolated national markets to wide swaths of Europe.

Mobile roaming fees are charged when a person makes or receives calls and text messages, or uses the Internet, while outside that person’s home country. Since 2007, the retail and wholesale levels of the fees have been limited by law in Europe. They account for about 5 percent of carriers’ revenue, analysts say.

Carriers in the European Union can now charge up to 35 euro cents (46 United States cents) per minute for a roaming call within the bloc, and up to 79 euro cents for every downloaded megabyte of data.

Deutsche Telekom, the big German carrier, issued a statement opposing Ms. Kroes’s proposal. “The telecommunications sector stands to lose millions of euros under such a proposal,” the company said. “At the same time it is expected in the European Union that telecom companies are going to invest sizable sums in the construction of modern broadband networks. The political decision makers are the ones who must resolve this apparent contradiction.”

Simon Gordon, a spokesman for Vodafone, the largest mobile operator in Europe, declined to comment on the plan. But he said Vodafone already sold a special roaming package called Vodafone Red for 3 euros a day that gave customers the ability to make and receive unlimited texts and voice calls while roaming in 14 European countries. The package also allows Vodafone customers to download as much data while traveling as they would at home each day under their existing plans, Mr. Gordon said.

Last year, at the urging of Ms. Kroes, European Union lawmakers extended and lowered the price caps on roaming fees through July 2017. And starting in July of next year, under the current rules, consumers are supposed to get the right to buy roaming packages from other operators, a change intended to introduce competition in the roaming market and bring down prices. If Ms. Kroes’s new plan were to take effect, it would override the changes set to take place in July 2014.

James Kanter contributed reporting from Brussels.

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