European commission price caps for mobile web access abroad set too high, say MEPs
Accessing the internet from a mobile phone will remain hundreds of times more expensive abroad than at home for the next 10 years under proposed European commission rules, politicians warn.
The European parliament is to vote in the summer on new caps limiting the amount mobile phone operators can charge travellers. Costs remain astronomical, with some UK networks charging “roaming” customers the equivalent to £3,000 for one gigabyte of data – enough to download 200 songs or watch two hours of video. The proposed price caps, intended to run until 2022, could be set at €500 (£420) for one gigabyte, but MEPs have asked for further reductions.
“We need better value for the consumer,” said Irish MEP Sean Kelly, who wants the cost of one gigabyte to fall to €90 by 2014. “The Commission’s proposals were somewhat generous to the industry. I don’t think any of the companies involved are going to go bust, they may cry wolf but they are not going to have the wolf at their door. The single market is about free movement of goods, free movement of people. We should be aiming to have no roaming charge at all.”
Since smartphone adoption became widespread there have been reports of holidaymakers coming home to bills running into thousands of pounds. Last year, Europe imposed a €50 cap on data spending. Internet access is automatically choked off after the limit is breached, unless by prior agreement. But holidaymakers outside the eurozone are not guaranteed such protection.
The average price of one gigabyte in a European country has fallen to €7 for those using their phone at home, according to research firm Berg Insight, though Three charges as little as £1 a gigabyte in Britain. In contrast, UK operators O2 and Orange charge pay-monthly customers £3 per megabyte when they are on the continent, the equivalent of £3,000 a gigabyte. These charges apply even in countries where they own networks; Orange UK customers will pay £3 when in France. Vodafone automatically opts customers into discounted roaming tariffs, which cost £80 per gigabyte in Europe, but £200 in the rest of the world. Such prices mean customers tend to use wifi rather than mobile connections when surfing the web abroad.
With the average customer expected to consume 1.3GB within the next three years, the commission’s proposed caps would still lead to huge bills and do nothing to counter the even higher prices of using phones outside the eurozone.
An Orange spokesman said: “We offer a number of bundles to help keep down the cost of data roaming. Taking out a bundle is always advised and can significantly reduce the overall cost of using data abroad. Next year we plan to introduce new controls, such as spending caps, for all areas outside of the EU, to allow all our customers greater spend control and prevent them incurring unexpectedly high charges.”
Roaming prices are based on wholesale agreements between mobile operators, which have been secretive about what they pay to use each others’ networks. Three, which owns networks in Britain, Italy and three other European countries, is lobbying for wholesale prices to drop. It believes they do not reflect the true costs to operators, claiming these are as low as €10-€30 a gigabyte. Three wants the cap set at €90, with a corresponding wholesale cap at €30.
“High prices are choking off use of the internet for travellers,” said Three’s UK corporate affairs director. “European consumers should be able to access the internet wherever. It’s like sitting with a French or Spanish friend in their local bar and being charged 100 times what they are for the same drink.”
The commission asked MEP Angelika Niebler to review its proposals and this month she presented a report saying consumers should pay no more than €200 a gigabyte, a significant reduction on the commission’s original proposal. She also suggested steep reductions in tariffs for texting and calling from abroad.
“We need to be very ambitious,” Niebler said at a debate on her report. “The target is to ensure that national costs and tariffs are similar to European tariffs so we won’t have a separate roaming tariff any longer – that’s the ultimate goal. Consumer organisations will agree; providers have a different take.”
The commission first introduced price caps for roaming in 2007 and is preparing a new round of cuts which are due to be voted on by the Parliament in June. The cuts would be staggered over a three year period beginning in July 2012 and ending in July 2014, and will remain in place for up to ten years.
MEPs have tabled 11 amendments to Niebler’s report. Kelly, a member of the centre-right Eurpean People’s Party, and four others have put forward Three’s proposals. The Greens have suggested even lower prices and the others all agree that caps should be lower than the Commission proposes.