EU mobile operators warn of rate hike

Mobile phone users in Europe could face higher domestic charges if the European Union forces telecom companies to limit the costs of international calls, an industry group statement, quoted by an Associated Press report, said.

'It could be foreseen that the rate of the decrease of the domestic tariffs will stall, or stop altogether,' Aoife Sexton, acting head of regulatory affairs of the GSM Association, which represents more than 700 cell phone operators around the world, was quoted in the statement as saying.

The Associated Press report said the industry is opposing a bill before the European Parliament that would cap roaming charges for mobile phone calls made abroad within the EU, by imposing a ceiling at 40 euro cents ($0.54) per minute for an outgoing call and 15 euro cents ($0.20) per minute for an incoming call.

Sexton cited a study conducted for the industry which said the proposed EU legislation would cut operators' annual retail revenues from roaming by more than half, from 5 billion euros ($6.8 billion) to 2.4 billion euros ($3.3 billion), the report said.

The European Commission introduced the bill to curb roaming charges, claiming network providers are reaping massive profits from inflated prices for calls from one EU nation to another, the Associated Press report added.

The EU's executive body aimed to slash roaming fees by as much as 70%, it added.

Last week, the European Parliament's industry committee went further, suggesting still lower caps in the cost of cross-border calls.

If those suggestions are passed by the full parliament next month and approved by governments of the 27 EU nations in June, Sexton warned phone companies could be forced to operate roaming networks at a loss, harming investment and competition, the report further said.