EU's roaming reform proposals announced

12th July 2006

A few months ago the European Commission (EC) announced that it was going to investigate the cost of roaming charges throughout the European Union. Despite pressure on operators to reduce costs, some very high roaming charges remain where users are charged up to €2.50 per minute or even more for making or even receiving calls in an EU country other than their own.

The EC's proposal is that roaming costs should be capped. For example, the EC proposes that the cost of receiving a call should be capped at 16.5 euro cents per minute (see chart).

Also under the proposals, calling home from aboard would cost a maximum of 49 cents per minute, and making a local call would be capped at 33 euro cents per minute.

A good deal for consumers?

On the surface, the EC's proposals look to be a good deal for consumers. Typically, roaming charges will contribute around 10-15% to an operator's profits, and if the capping takes place as proposed then this would have a noticeable impact on the operator's bottom line.

Of course, the actual cost to the network itself varies. It's most likely that smaller operators could bear the brunt of this as they lack the pan-European scale of networks such as T-Mobile, Vodafone, O2/Telefonica and Orange.

You can be reasonably certain that operators will not stand by and let their profits slide, and any proposed cap on roaming charges will most likely be paid for by price hikes elsewhere.

You can read more about the EC's proposals here.

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