Report: EU plans even steeper cuts to roaming charges

European Union lawmakers are working on plans to further reduce roaming charges operators can levy against customers traveling abroad, according to a Reuters report.

The EU Parliament wants to make much deeper cuts to European roaming charges than those proposed last year by European Commissioner Neelie Kroes. If successful, then the cost to a traveller making a one-minute outgoing call would fall from €0.24 under the Kroes plan to €0.15. Data roaming would be slashed from €0.50 per megabyte to €0.20 under the new scheme.

If this new proposal is adopted by the EU, then mobile operators would take a hit, since roaming charges account for 5 percent of sales and 7 percent of operating margins, according to the report.

Commenting to Reuters on how operators might react, Stephane Beyazian, telecoms analyst at investment bank Raymond James, said the mobile service providers would not welcome steeper cuts to roaming charges but could absorb them. "It would be a bad surprise, but it would not be catastrophic," he said, adding that the industry was satisfied with the Kroes proposal made last summer.

However, Angelika Niebler, a German politician responsible for guiding the proposed regulation through the EU parliament, said that mobile operators should not charge customers differently depending on where they are. "There should really be no roaming (fees) at a time when we are supposed to have a single market," Niebler said in an interview with Reuters.

The draft plan being put forward by the German politician calls for incoming calls to be reduced to €0.05 per minute by 2014, half the rate proposed by Kroes, with text messages following a similar path and also being cut by 50 per cent to €0.05. The existing EU proposal would see the roaming caps recommended by Kroes coming into force in July, with further cuts following in 2013 and 2014.

For more:
- see this Reuters article

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