EU Proposals to Equalise Roaming Charges by 2014

EU Proposals to Equalise Roaming Charges by 2014

The EU Commission has proposed to cap roaming charges for mobile phone users visiting any country within the European Union. The scheme is due to be implemented by July 2014, and it would see charges capped at 24 cents per minute for calls as opposed to the current 35 cents per minute for calls.

This proposal (which may later become a directive) would be binding across all member states in the EU due to its definition in Article 288 as ‘binding as to the result to be achieved’. This would mean that if a member state did not implement the changes they could be fined under an enforcement action (Article 258) which states that the commission can take action against a member state that does not comply with its responsibilities. The EU aims to have full market integration; this proposal therefore would bring the EU closer to integration by creating a ‘seamless communications market’.[1]

Competition within the market will be increased as a consequence of the proposal. By equalising roaming charges across all member states, phone companies will be forced to offer other attractive benefits to its customers; therefore, there will be a greater level of competition across Europe. Ultimately, this would provide the consumer with more choice as their providers’ terms and conditions begin to differ considerably.

The EU has also proposed that the maximum bill one could expect is 50 euros unless another plan is agreed before the customer travels. The customer would therefore be fully aware as to the charges they could expect and adapt their spending plan accordingly, as opposed to returning home and finding a bill which is considerably more than one would usually pay each month. Greater consumer confidence would be generated by these proposals and could aid the business of mobile phone companies. Many people avoid using their mobile phones while they are abroad in order to avoid roaming charges and that unexpected bill. With a higher level of certainty, one may be more likely to use their phone abroad, even if it is on a limited basis. As more revenue is generated, the large networks such as Vodafone and 3 will be able to create new shops and reach more consumer whilst also offering more deals. This growth would ultimately call for legal advice, generating work for the legal sector. This argument however could be countered as company success would depend on the number of people who begin to use their phones abroad once charges are uniformed and reduced.

Companies may decide to increase charges elsewhere, something consumers would have to be aware of when signing new contracts.

Most of the effects of this proposal are positive, however, there is a potential threat to the consumer. Mobile phone companies generate the majority of their income from roaming charges. Neelie Kroes, the EU Digital Agenda Commissioner, has described this income as having ‘outrageous profit margins.’ Given our current economy, companies may not be willing to decrease this profit margin and may decide to increase charges elsewhere, something consumers would have to be aware of when signing new contracts.

As stated, this is currently only a proposal; the next step is for the proposal to go to the European Parliament and EU governments for consideration and amendments. At this stage, the positives will be weighed against the costs of this initiative, however, given the support already gained by businesses such as Telefonica, the largest phone company in Spain, and the way in which the EU wishes to implement its aims, it is likely that this will be implemented in the future.

  • [1] Europa – View Website
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