EU assembly adopts new price curbs on phone calls

STRASBOURG, France Wed Apr 22, 2009 3:54pm BST

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STRASBOURG, France (Reuters) - Using a mobile phone to send text messages or surf the Web by laptop will be up to 60 percent cheaper for travelers in the European Union under price curbs adopted by the European Parliament on Wednesday.

The caps take effect in July and are being adopted rapidly because EU parliamentarians, facing an election in June, want to show how the bloc can make a positive difference to the daily lives of its nearly 500 million citizens.

EU regulators and the executive European Commission want to end "bill shock," when business travelers or holidaymakers return home to huge charges for checking emails or surfing the Web while away.

"Using your mobile phone abroad in the EU should not cost unjustifiably more than at home, whether for making calls, sending texts or surfing the Web," EU Telecoms Commissioner Viviane Reding said in a statement.

"Europe's 37 million tourists and 110 million business travelers are waiting for the promise of the borderless single market to finally have a positive impact on their phone bills."

Operators will be allowed to charge customers a maximum of 11 euro cents (14 U.S. cents) per roamed text (SMS) message, excluding sales tax, compared with current prices of about 28 cents.

Downloading data while roaming -- buying a song using a mobile phone or using a laptop with a dongle or GSM card to access the Internet -- will cost a maximum of 1 euro per megabyte at the wholesale level, from about 1.68 euros today.

Reding said she was not worried operators would try to claw back the lost revenue by bumping up prices elsewhere. Roaming traffic had risen by nearly a third since the first roaming rules came into force, giving operators new business, she said.

THREE-YEAR EXTENSION

The new legislation will extend by three years to 2012 price caps that were introduced in 2007 on roamed voice calls -- or when mobile phone users make or receive calls outside their home state in the EU.

Previous legislation had left out text messaging and data downloading, such as checking emails on a laptop or mobile phone while outside a home state. Reding proposed a second measure to plug these gaps and extend caps on roamed voice calls.

Parliament voted 646 in favor and 22 against. EU states will give their formal endorsement in coming weeks.

"The European Parliament has ensured that consumers enjoying a holiday abroad this summer will not be shocked by extortionate phone bills when they return home," said Monique Goyens, director general of pan-EU consumers lobby BEUC.

The move divided the industry. GSM Association, which represents major mobile operators that dominate roaming, says the latest measures are unnecessary and that data prices are already falling.

"We believe that detailed price regulation of the roaming market is not the way forward," said Martin Whitehead, director OF GSMA Europe.

New entrants welcomed the moves to cap prices. Christian Salbaing, managing director of 3 Group Europe, a mobile operator, said the new law would allow the company to offer more attractive packages to customers.

Roaming is only a small part of an operator's revenue stream but Reding plans guidelines for EU states to reduce the fees operators charge each other for routing calls, a move that will hit bottom lines harder.

(Editing by Timothy Heritage; Editing by Andrew Macdonald)

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