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IP/10/851

Brussels, 29 June 2010

Telecoms: roaming prices down but competition still not strong enough, says Commission report

EU mobile operators have reduced their roaming charges in line with the maximum price caps established by EU rules, first introduced in 2007 and amended last July, according to the European Commission's interim report on roaming published today. Price transparency has improved. The cost for roaming calls has decreased by more than 70% since 2005 and sending a text message between EU Member States costs 60% less. However, consumers still do not enjoy significantly lower tariffs than those imposed by EU rules. The Commission's report therefore concludes that competition on the EU's roaming market is not yet strong enough to provide better choice and even better rates to consumers.

Commission Vice President for the Digital Agenda Neelie Kroes said: "The cost of using mobile phones or devices when abroad in the EU has fallen continuously since the adoption of the first roaming rules. But three years since the rules came in, most operators propose retail prices that hover around the maximum legal caps. More competition on the EU roaming market would provide better choice and even better rates to consumers."

Under the amended roaming rules adopted in June 2009 (IP/09/1064, MEMO/09/309), EU citizens benefit from lower tariffs for voice and SMS roaming services and are better informed about the prices that they pay for data roaming . The cap on the maximum price consumers pay for roamed voice calls fell from €0.46 to €0.43 per minute (excluding VAT) as of 1 July 2009 and will decrease further to €0.39 per minute as of 1 July 2010. The capped-price of a text message fell by almost 60% to €0.11 as of 1 July 2009. The prices that operators charge each other for data roaming will drop from €1 to €0.80 per MegaByte uploaded or downloaded as of July 2010. See IP/10/843.

Although legislation has led to lower prices, the today's report shows that, despite the introduction of regulatory limits, the EU roaming market is still not competitive enough to provide the best choice and price to consumers. Retail prices tend to cluster around the EU regulated maximum price caps. At the end of 2009, the EU legal maximum for roamed voice calls was €0.43 per minute, and consumers who chose the "Euro- tariff" (see Background below) paid on average €0.38 per minute for making a roaming phone call Euro-tariff consumers also paid on average €0.17 per minute for calls received while roaming, slightly below the legal cap of €0.19.

In the Commission's view, EU rules give operators plenty of margin to offer more attractive roaming tariffs below the regulatory limits. Ultimately the difference between roaming and national tariffs should approach zero by 2015, in line with the objectives of the Digital Agenda for Europe (see IP/10/581, MEMO/10/199 and MEMO/10/200).

For data roaming, the report confirms that wholesale prices have fallen to well below the EU maximum (€1per MegaByte uploaded or download). Operators were charging each other an average of €0.55 per MegaByte at the end of 2009. Average consumer prices have also fallen, from €3.62 per MegaByte to €2.66 at the end of 2009. The Commission expects operators to pass on savings at wholesale level to consumers as lower retail prices, which it will continue to monitor.

The Commission's analysis also shows that consumers are making more use of roaming services. Despite an estimated 12% decline in travel, overall volumes of calls received and SMS sent while abroad in the EU have grown over the past two years. In particular, 20% more text messages were sent in the summer of 2009, than in the previous summer, following the introduction of the EU-wide 11 cents SMS price cap.

Data roaming services grew by more than 40 % in volume terms in 2009. As smart phones and other hand-held devices become more widespread, this trend is expected to continue.

The Commission will review the 2009 roaming rules in full by the end of June 2011. It will assess whether their objectives have been achieved and whether the market for roaming services is working as it should – namely as a Single Digital Market.

Background:

The 2007 EU Roaming Regulation (MEMO/07/251, IP/07/1202) introduced wholesale and retail price caps for roaming charges and included measures to increase transparency. In 2009, the EU amended the Roaming Regulation to lower prices of text messages, voice and data services further. The amendment introduced a "Euro-SMS tariff" limiting the price of an SMS to 11 cents (excluding VAT) and a wholesale cap of €1 per MegaByte uploaded or downloaded. The 2009 Roaming Regulation is valid until 30 June 2012.

One of the targets in the Digital Agenda for Europe, is that differences between roaming and national tariffs should approach zero by 2015. In this way, the Commission will achieve a true Single Market for telecoms services.

Several UK mobile operators tried to challenge the EU's Roaming Regulation in the EU Court of Justice. However, on 8 June 2010 the EU Court of Justice ruled that the Roaming Regulation was legally valid (MEMO/10/242). The Court ruling confirmed the Commission's view that the Regulation has a correct legal basis (the Treaty's rules to ensure the correct functioning of the EU's Internal Market), is essentially proportionate to the objective of protecting consumers against high charges and is justified on grounds of subsidiarity (the same objective could not have been reached without a common approach at EU level).

The interim report can be found here:

http://ec.europa.eu/information_society/activities/roaming/docs/interim_report2010.pdf

For more information:

http://ec.europa.eu/information_society/activities/roaming/index_en.htm

Annexe

Figures and graphics available in PDF and WORD PROCESSED

(Source: ORECE)

Figures and graphics available in PDF and WORD PROCESSED

(Source: ORECE)

Figures and graphics available in PDF and WORD PROCESSED
(Source: ORECE)


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