EU considers concession for telecoms operators in ending roaming charges

[BRUSSELS] Mobile telecoms operators in different European countries could be allowed to charge each other for keeping their customers connected when they travel abroad under a proposal suggested by Spain aimed at helping operators recover their costs when roaming charges are abolished.

The European Union has committed itself to letting its 500 million citizens use their phones while travelling abroad within Europe without incurring cross-border roaming charges from June next year.

But the network operating companies will still face costs in the form of the wholesale charges they pay to foreign operators to let their customers use their networks.

European member states are split as to where the cap on wholesale roaming charges should be set to avoid operators raising their domestic prices to recoup lost revenues.

And now they are discussing a provision that would allow operators hosting EU tourists on their networks to charge more than the wholesale cap in exceptional circumstances if they are unable to recover their costs, several EU diplomats said.

The problem stems from big differences in domestic prices, making an EU-wide wholesale cap that suits all 28 member states very elusive.

In the north and east of Europe, where domestic prices are low and packages relatively generous, operators fear that if wholesale prices are not brought down enough they will be forced to either raise prices at home or stop offering roaming services completely.

On the other hand countries like Spain, Greece and Portugal which attract a lot of tourists say the wholesale rates need to be high enough to allow their operators to recover the cost of hosting so many travellers on their networks, otherwise they too may need to raise domestic prices.

A proposal by Spain would allow operators to ask their regulators for permission to levy wholesale roaming charges on foreign operators above the EU cap where they are not able to recover "actual and projected" costs of hosting tourists on their networks, according to a version seen by Reuters.

The regulator would have to decide if the company is "cost efficient" before granting permission, and the extra charge could only be levied for up to one year and "only to the extent necessary to recover the costs".

A diplomatic source said the proposal would not affect the end of retail roaming charges for consumers, which is set to come into force on Jun 15, as it dealt only with payments made between the operating companies.

But several countries are concerned by the proposal, diplomats said, since it would effectively increase the wholesale price operators have to pay when their customers travel abroad.

And EU law allows operators to continue to charge customers extra for using their phones abroad if they can show a revenue hit of at least five per cent.

The only way to accept the Spanish proposal would be to lower the wholesale caps significantly, one diplomat said.

The European Commission has proposed setting the wholesale cap for data at 8.50 euros per gigabyte, although the European Parliament and many countries want it to be much lower.

EU deputy ambassadors meet on Wednesday to try to break the stalemate on wholesale caps but an agreement is not guaranteed, meaning the issue could then be left for the ministers of member states to tackle when they meet in December.

REUTERS