WHAT'S THE STORY WITH THE EU CUTTING ROAMING CHARGES?:IT'S SUMMER time! You've packed your toothbrush and togs, and are ready for some rays and a break from the economic woes that have been dogging this beleaguered island. But don't get too smug about your booked and budgeted-for break abroad: going continental can cost you, especially if you keep your phone switched on.

But not for too much longer. The days of the dreaded “bill shock” – where unwitting mobile phone users return from their wanderings only to be greeted by bills that amount to more than the cost of the holiday itself – are hopefully a thing of the past, thanks to new EU regulations on roaming charges, which come into force at the beginning of next month.

Under the new directive, mobile phone operators across the EU will be forced to cap their roaming charges; for many mobile phone users in this country, this could mean major savings. From July 1st, the new call ceilings will be 43 cent a minute (52 cent a minute including Vat) for outgoing calls, and 19 cent a minute (23 cent including Vat) for receiving calls.

Still sound prohibitive? Not in comparison to what many customers are already paying. In the case of Vodafone, those currently on the Eurotariff or Vodafone World rate are charged 56 cent a minute to make a call, and 27 cent per minute to receive one, on a par with the EU roaming rates for O2 customers. In each case, the tariffs will come down to just within the EU limit at the start of next month, to 52 cent and 23 cent per minute for making and receiving calls. Coming in slightly cheaper, as things currently stand, is Meteor, which charges 55 cent per minute for outgoing calls, and 25 cent per minute for incoming calls. Yet the new EU directive will bring Meteor charges in line with the two largest mobile phone operators in the country.

REACTION TO THE new directive has been mixed. Vodafone, for one, is not happy. “The application of retail price regulation and the use of uniform price caps across 27 different markets is inappropriate and stifles competition,” a Vodafone spokesperson tells Pricewatch. Meteor has welcomed EU involvement, however, particularly in its insistence that the wholesale costs of roaming be lowered along with the retail costs.

“Traditionally, prices were high for roaming, due in the main to the very high wholesale charges applied by operators across Europe – high wholesale access translated to high retail prices,” says Amanda Carroll, Head of Communications at Meteor. “As smaller independent operators such as Meteor have less pricing and buying power at the wholesale level, in the run-up to the first roaming regulation Meteor campaigned hard for intervention to mandate lower wholesale pricing. Meteor, therefore, particularly welcomed regulatory intervention at the wholesale level.”

For mobile phone operator 3, however, the regulations didn’t go far enough. “We believe it could go even farther,” says Robert Marshall, Corporate Affairs manager at 3, who pointed out that roaming charges with 3 are currently below the cap anyway, at 39 cent per minute for outgoing calls and 19 cent for receiving calls.

Dermott Jewell, Chief Executive of the Consumer’s Association of Ireland, welcomes what he calls the “long overdue” move. “The prices for a long, long time have been outrageously high, which is why the EU commission has been forced to give an ultimatum to the industry: bring down your prices or we will make you,” says Jewell.

According to Ann Neville, manager of the European Consumer Centre, the new cap on charges “represents a real improvement for consumers in that under the new rules they can use their phones without being faced by a shock bill on their return home.” New roaming offers are already on the cards for many of these operators, alongside and within existing packages such as Vodafone’s Passport and O2’s My Europe.

But, as well as bringing down the call rates, the EU regulations will now require per-second billing for calls received so that phone users don’t get charged for time they have not used. According to the European Commission’s website, this measure alone is expected to increase savings by over 20 per cent.

The new regulations also cap the price of downloading data on a mobile phone while in another EU country, with a wholesale cap of €1 per megabyte to be introduced, a figure which will be reduced by half by 2011.

According to European Commissioner for Information Society and Media Viviane Reding, who announced the new EU regulations in April, the reasoning behind the new caps is simple. “Sending text messages or downloading other data via a mobile phone while in another EU country should not be substantially more expensive for a consumer than sending text messages or downloading data at home.”

THE EU REGULATIONS are also calling for improved transparency of data roaming offers. Reding has made it clear that she wants all mobile operators to make sure “that consumers get warned by appropriate mechanisms so that they no longer risk receiving ‘shock bills’ of several thousand euro for data roaming, as we can read often in complaints received by the European Commission and in the European Parliament.” This is to protect those such as a German mobile phone user cited in the EU release on the new regulations, who downloaded a television programme while roaming in France and was faced with a bill of €46,000 on returning home.

The new regulations stipulate that customers be allowed choose a cut-off mechanism once their phone bill for roaming reaches €50 unless the phone user specifically opts for a higher limit. Operators have until March 2010 to put such measures into effect.

From here on in, says Reding, the mobile phone operators will have to make a good case if they want to increase roaming charges.

“The EU cannot accept that mobile operators make up to 20 times more profits on roaming customers than on their domestic customers.” With the mobile penetration rate in Ireland standing at 118 per cent, according to the most recent Central Statistics Office report (in other words, there are more mobile phones than there are people now), as a nation we have taken to mobile phones with alacrity. We also like to travel, with the CSO reporting that Irish residents made 7,830,000 foreign trips in 2007 alone, with total expenditure on all foreign trips amounting to €7.34 billion.

How much of this was spent on roaming phone calls is unclear, but, with roaming charges as they currently stand, as Jewell puts it: “Talk under these circumstances is not cheap.” Yet, thanks to the European Union, it is getting cheaper.

Now, if only the holidays would get cheaper too . . .