Mobile Operators: EC ‘Peddling’ Faulty Data to Support Unneeded Regulation
European mobile operators Tues. denied EC claims their high international roaming fees are forcing consumers to turn off their phones while traveling. Their response followed the release of a Eurobarometer survey showing a “clear majority” of users want the Commission to align roaming retail call and text message prices to local charges. But the GSM Assn. (GSMA) charged the EC with “peddling incorrect data” in order to regulate an already competitive market.
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Nearly 8 in 10 Europeans have mobile phones and rely “very heavily” on international roaming services, the survey of 24,565 people across the 25 member countries found. At the same time, a clear majority limit their mobile communications when abroad, 81% citing high roaming charges as the reason. Six of 10 said they would use their phones more while traveling if prices were more attractive.
“This perception that there is a real imbalance between the cost of mobile communication services at national and international levels is undoubtedly the reason why a clear majority of Europeans (70%) want the European Union to take action to regulator the price of calls and text messages,” Eurobarometer said. Support for regulatory action was higher among those in the youngest age group, who are more likely to cut their use of mobiles when traveling because of cost.
Information Society & Media Comr. Viviane Reding used the findings to urge EU govts. and the European Parliament (EP) to move quickly on her proposal to introduce price caps based on wholesale rates plus 30%. At a Tues. new briefing, Reding said her plan allows a great deal of maneuver room for operators to lower prices. Her proposal doesn’t cover SMS services, but, because citizens are complaining about those prices as well, she’s leaving it to the Council of Ministers and the EP to decide, she said. Public pressure for lower rates is very high, Reding said.
The EC also updated its mobile roaming website to help consumers see what various operators are charging, Reding said. Although the EC has been pushing companies to lower -- and be more open about -- their rates, she said, it hasn’t happened. Instead, operators are pouring much more money into lobbying lawmakers than into solving the problem.
EC rate figures are off by a factor of 2 or more, GSMA Chief-Govt. & Regulatory Affairs Office Tom Phillips told us. The Commission’s mobile roaming website is incomplete and inaccurate, he said. The claim that a German traveling in France will pay more than 6 for a 4-min. call is off by around 4, as is the charge that a Briton phoning in Italy will spend over 8 (it’s actually around 2) for the same time period, Phillips said. Average roaming prices have dropped 22% in the last year, and that rate will accelerate over the coming year, Phillips said. Most of the 22% decrease happened before Reding began her regulatory crusade in Feb., he said.
It’s unclear what’s driving the EC’s desire for regulation, Phillips said. There doesn’t appear to be a sense that the market is broken, and the idea of having a single European market for mobile roaming has been deemed impractical by Commission advisers and national regulators. Reding’s insistence on regulating a market in which prices are steadily dropping could end up outlawing innovative packages, he said.
Phillips dismissed the finding that people are refraining from making international calls because of high costs. There’s vigorous competition in Europe’s mobile industry, he said. Consumers are getting a good deal as operators fail to cover their capital costs so they can roll out new offerings, 3G and other services. Customers choose services based on the cost of handsets, domestic call charges, and the number of text messages allowed per month as well as on international roaming, which probably isn’t the most important service element to most people, he added.
Reding’s comment about strong lobbying by mobile operators is “extraordinary,” Phillips said. The EC doesn’t bother to consult industry on its proposals, but it’s willing to spend taxpayer money on market research and political lobbying for those proposals, he said.
No country opposes international roaming regulation, Reding said. Some may be considering a few changes to the basic proposal, but none has suggested the plan be abandoned. Phillips disagreed, citing strong opposition from several countries -- including Spain, the U.K., France and Germany -- to regulation of retail roaming prices that’s causing dissension among Council members.
Two EP committees are reviewing Reding’s plan. If they vote before spring, plenary action could come before summer, Reding said. She said she hopes this is the last time she'll have to recommend before summer holidays that tourists shut off their phones while abroad.