Commission proposes to ring the changes on roaming charges

European Diary: European travel is relatively painless these days

European Diary: European travel is relatively painless these days. Travelling to Luxembourg, France, the Netherlands and Germany is a doddle for a Brussels resident, who doesn't even need to show a passport when crossing borders. What's more, the trains are mercilessly efficient and Brussels airport is spotless and rarely crowded.

Unfortunately, one of the great inventions of modern times, the mobile phone, has failed to keep pace with the drive toward consumer- friendly travel. One of the big downsides of travelling regularly throughout Europe is the mobile phone bill that usually plops onto the doormat about a month after a weekend break or work trip.

The first bill I got after moving to Brussels was €543, which was composed mainly of roaming calls made while working in Luxembourg, just a two-hour drive from Brussels. The Irish Times may have paid the bill but it highlighted the great roaming "rip-off" practised by mobile firms that generate up to €8.5 billion every year from calls made and received by their customers while travelling abroad.

Last week the European Commission proposed a new regulation that could make using your mobile a lot cheaper. After years of investigations and even the odd dawn raid at the headquarters of firms such as Vodafone, information society commissioner Viviane Reding finally proposed tough action to reduce prices.

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Her proposed EU regulation would introduce a wholesale price cap on the fees that operators charge each other to carry roaming calls. In theory, this should lead to lower prices for consumers as it will prove less expensive for firms to carry calls for rivals. However, reductions in wholesale fees in recent years haven't fed through to the consumer.

Statistics released by the commission show that firms have been charging roaming customers four times more than the equivalent price charged to domestic users. For example, a French customer roaming in Italy will pay between 50 cents to €1.18 a minute, while an Italian pays just 10 cents. The differences in price cannot be explained by increased costs to operators, according to the commission, which says that savings at the wholesale level by operators are not being passed on to customers.

In the absence of retail price cuts by operators, Ms Reding has proposed two price caps. The first would take place immediately the regulation came into law and would apply to calls received while travelling abroad. It would prevent operators marking up retail prices more than 30 per cent above the wholesale cost of a call.

The second cap would apply to calls made while travelling abroad. The same 30 per cent cap would be set on retail prices, but this would not kick in until six months after the regulation was passed into law by the European Parliament and member states.

The proposal has been greeted with howls of protest from the mobile phone industry, which is threatening everything from legal action to hiking domestic charges. It says it is already bringing down roaming rates and regulating retail prices is too extreme.

In the final weeks before Ms Reding presented her new regulation the industry began a massive lobbying campaign, contacting the cabinets of all 25 commissioners. The media were also lobbied, and I shared a cup of coffee with an executive of O2, who explained the industry's deep unease about Ms Reding's "prescriptive action".

Some commissioners, including Charlie McCreevy and Peter Mandelson, wobbled and fought for a watered-down regulation that would not impose a retail price cap. However, at a lengthy meeting last Wednesday, commission president José Manuel Barroso sided with Ms Reding and forced the retail price caps through the commission.

"Here is a practical application of our Europe of results approach," Mr Barroso said. "With our proposal today, consumers using mobile phones within the single market will get a fairer deal." He is keenly aware that tackling the great "roaming rip-off" would be a big hit among Europeans jetting off for a few weeks in the sun this summer.

Lower prices though could still be some way off. The European Parliament and member states still have to have their say on the proposed regulation, and the lobbying of MEPs by the big phone firms will begin in earnest after the summer break.

"There will be plenty of lunches in the autumn," joked one official at the parliament last week. Consumers will just have to hope that MEPs support the proposed regulation. Considering the amount of travel involved in jetting between Brussels, Strasbourg and their home countries, they are surely unlikely to oppose reducing their own roaming bills.