Roaming cap cuts mobile phone bills, says EU

Mobile phone bills in Europe have been slashed by as much as 60% since the EU placed a cap on roaming charges over the summer, the European Commission, quoted by an Associated Press report, said.

The Associated Press report said the European Union set a price ceiling of 0.49 euros ($0.69) per minute for making a mobile phone call when abroad and 0.24 euros ($0.34) for receiving one, plus value-added tax, saying that operators were reaping massive profits from unjustifiably high roaming charges.

The so-called Eurotariff, in place since July 30, reduced phone bills for millions of Europeans, the report said.

'By August 30, around 200 million EU consumers had already switched to the Eurotariff,' the commission said in a statement. It estimated more than 400 million EU citizens took advantage of the new rates by the end of September.

Mobile operators say price caps have hit their margins hard and could push up the prices of other telecom services, the Associated Press report further said.

Belgian national operator Belgacom warned that the new roaming rules will shave 23 million euros ($32.58 million), or 1%, from its 2007 revenues, and 14 million euros ($19.83 million) from its total earnings before interest, tax, depreciation and amortization, the report said.

Vodafone Group said in May that the roaming regime would cost the group between 200 million pounds ($400 million) and 250 million pounds ($500 million) this year.

National regulators are trying to determine if reduced roaming charges have been offset by increased rates for other services and will publish a report in December, EU Telecoms Commissioner Viviane Reding, quoted by the Associated Press report, said.