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EP deals blow to telecom sector over international roaming charges

Mobile phone users in Europe are one step closer to significant cuts in crossborder roaming charges after a key committee at the European Parliament agreed to put a cap on rates.

The parliament's Industry Committee has approved a cap of 40 cents per minute on calls made from a another EU country and a cap of 15 cents per minute on calls received in another EU member state. The agreed caps are at the bottom end of the range that was expected and can be seen as a major blow to the industry. „Loudly, the bell is now tolling for international mobile roaming charges in Europe,” said EU Commissioner Viviane Reding in a statement. „This last border in the EU's internal market, still visible for the moment on most consumers' mobile phone bill, now is bound to disappear very shortly.” The cuts amount roughly to a reduction of as much as 70% on the total  'roaming' charges that telecom operators apply when phone users make calls with their mobile in another country.

According to MEP Reino Paasilinna, shadow-rapporteur on roaming for the Socialist Group in the parliament, the Industry Committee secured support for an 'opt-out'  clause that will allow phone companies to offer alternative packages to their clients. That 'opt-out'  replaces the controversial 'opt-in'  clause that was earlier adopted by the parliament's Internal Market committee and that would have asked consumers to specifically sign up for the lower rate regime.  „The 'opt-out' will automatically ensure all consumers' roaming charges are capped far below what most consumers are currently paying,” said Paasilinna in a statement.

The committee's vote is the final step before formal adoption in the full plenary session of the European Parliament in the week of the 10th of May. It's then up to EU Telecom Ministers to sign off on the plan in June, so that it can take effect in July, just in time for the summer holidays when 40 million Europeans are expected to use their phones abroad. Before the vote, it was expected that the proposed cuts could lead to a limit of a maximum of 40 to 50 cents per minute for an outgoing call, and a cap of 15 to 25 cents per minute for a call received in another country. The industry has proposed limits of 65 cents and 35 cents, respectively.

The industry also is worried about dividing the costs of the crossborder phone calls between companies from large and small EU member states. Austria Telekom CEO Boris Nemsic, in a letter to the Wall Street Journal newspaper yesterday, said that operators in countries that 'export' more calls to foreign networks than they 'import' are set to benefit from the price limits. According to the European Commission, there are 479 million mobile phone users in the European Union. The commission tabled the plans almost exactly one year ago. Some critics say the crackdown on excessive roaming charges is part of the EU's attempts to make itself more popular. (