LONDON The GSMA trade group that represents the GSM mobile operators has made a scathing attack on the decision by the European Commission to bring forward legislation by the Autumn that would cap rates for sending SMS and for data roaming across European borders.
The Commission claims that the cap would significantly reduce the costs of roaming and sending messages. It already imposed price caps on operators last year for voice roaming.
However, according to Tom Phillips, Chief Government and Regulatory Affairs Officer at the GSMA, "the Commission's proposals to single out yet another aspect of the mobile industry and apply retail price regulation, threatens to choke growth and stifle competition."
Philips adds "the Commission's fixation with regulating common mobile prices across the EU is widespread. Different markets have inherently different costs, whether from variations in tax or, for example labour rates. These services should be priced based on local market conditions, not on some vision of a single Europe, originating in Brussels."
In its defence against the proposals, which it has resisted for over a year, the GSMA points to the examples of many operators that have introduced either bundles of text messages for roamers, which can result in a price of just 10 Euro cents per message for those who make full use of their bundle or daily tariffs, that for less than one Euro per day, enable roamers to send messages for just 15 Euro cents each – already within the price caps range suggested by the European Regulators Group (ERG).
As to the Commission's suggestion for new measures regarding the transparency of data roaming prices, the GSMA points out that mobile operators are improving transparency around data roaming prices and reducing the likelihood of unexpected bills. It notes many operators now offer data roaming services in bundles for a flat fee.
Earlier this month, Europe's mobile operators were making a last-ditch effort to ward off strict price caps on text messages and data downloads within the EU by warning, thorugh the GSMA, that heavy regulation is cutting capital spending and profit margins.
In a statement Tuesday (July 15) the commission noted: "In February 2008, Commissioner Viviane Reding gave mobile operators the opportunity to avoid regulation by asking them to voluntarily and credibly bring the prices for text messages down by 1 July."
But the industry's proposals are not seen as sufficient.
Reding suggested text and data roaming prices have remained too high compared to the actual costs incurred by operators, and "as a result, the Commission is examining how to make proportionate proposals to the European Parliament and the Council in autumn in order to resolve Europe's continuous roaming problem."
Her benchmark for a reasonable price was 12 Euro cents per SMS, but the statement does not include a set figure for what the cap should be. That detail will be included when Reding makes her official proposal to amend the EU Roaming Regulation in late September or early October.
The Commission's goal is to make SMS and data roaming cheaper by summer 2009.
It will be for the EU parliament and council of ministers to decide whether to adopt the plans, butt here is a widespread consensus that they will be passed.
The Commission's investigation found that roaming text charges cost an average 29 Euro cents, but can range from 0.06 a text to as much as 50 Euro cents.
For data roaming, the EC wants to make data pricing more transparent to prevent "bill shock," but it has not yet decided whether further regulation at the wholesale or retail level is necessary. Operators' pricing tactics for data roaming this summer is expected to be factor in the Commission's decision.
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