by Paul Gibson
Home >> EU Plans to Cut Roaming Charges
While EU legislators have yet to pound out the details, German Economy Minister Michael Glos expressed his satisfaction with the resolution to meet in June to work out the particulars on roaming fees across Europe.
The plan obviously includes price ceilings on the amount of money telecommunication companies will be allowed to charge customers calling from outside their country, but inside the EU. Such price caps are meant to establish maximum roaming charges for consumers to prevent the “uncontrolled� roaming charges in effect today.
The giant telcos in Europe, among them Vodafone Group PLC, T-Mobile (belonging to Deutsche Telekom), and Orange (France Telecom), have announced lower fees for consumers across the board, lowering rates as much as 40%.
In Europe phone companies make about 10 billion euros (€10,000,000,000) on roaming charges alone. A forty percent reduction would translate into a potential loss of revenue of €4 billion. Taking that into account, telecommunications companies have already warned that, if the trend continues, this piece of legislation will lead them to compensate for loss of revenue from roaming, by raising rates on normal phone calls and data transmissions.
The talks are now in their preliminary phase, but the proposal of EU Telecoms Commissioner Viviane Reding would like to include the potential changes to apply to email and internet access as well.
So in a nutshell, it’s back to the drawing board for most budgetmakers at telecoms across the European Union. Time to re-calculate annual budgets, earnings and even commissions and special rate plans.
While the proposal seems to make sense from a consumer standpoint, it looks like the move may be just another attempt to give telecoms the opportunity to raise phone plan rates and internet access fees even higher in their own countries to compensate for the loss of profits.
I just hope the Minister Reding is still around to protect us, the consumers, when this proposal throws a bombshell on profits for all the major telecoms across Europe. Something tells me we are in for a ripple-effect that will lead to more government regulation of telecommunications, undoing the very premise of deregulation and liberalisation of capital and services, established by the Union itself in the Treaty of Rome. Quite ironic, isn’t it?
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Posted on http://www.weeklyletter.com at 2007-03-20 11:00:00 +0100
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It’s interesting that the article says the Union signed the Treaty of Rome as the European Union didn’t exist in 1957 when that treaty was signed. The only signatories were France, West Germany, Italy and the Benelux countries. I think perhaps there is some confusion with the 1992 Treaty on European Union (known informally as ‘The Maastricht Treaty’) which brought about The European Union. I don’t recall that treaty enshrining any doctrine of deregulation, though.
I agree with the author in that I hope Minister Redding is around to protect us. That’s what we pay her for. Her job description literally includes “the regulatory framework for electronic communications” .At the moment a four minute mobile phone call abroad in the EU can cost
anything between €1.20 to €9.68 ! That is wrong. If businesses can not self-regulate, then we (the Union) must do it for them. And that includes curtailing any sleight of hand to raise prices elsewhere.
Long live the European Union!
Thanks, as always for your comments Donal!
I would like to join you in your shout of victory…unfortunately, my shout will be LONG LIVE SPAIN!....
I think there is absolutely no doubt in anyone’s mind, ( I take that back, maybe in yours…) that the Treaty of Rome is the obvious precursor and foundation of the Liberalisation and Deregulation movement.
According to Article 31 of the Treaty of Rome and I quote: “This obligation (referring to the abolition of protectionist custom duties) shall, however, relate only to the degree of * liberalisation attained in pursuance of the decisions of the Council of the Organisation for European Economic Co-operation of 14 January 1955. Member States shall supply the Commission, not later than six months after the entry into force of this Treaty, with lists of the *products liberalised by them in pursuance of these decisions. These lists shall be consolidated between Member States.
While I respect your viewpoint, there seem to be a notable flaw both in your observations and also in your understanding of the article. No one is doubting the good intention of Minister Reding…
But I am certainly questioning the “cost” of such an ill-designed proposal which will inevitably lead to HIGHER PHONE RATES on a domestic level.
As the saying goes in Spanish; “El remedio es peor que la enfermedad.”
Thanks for the reaffirmation of my belief that Spain has the right to make its own economic policy.
Thanks again!
Paul
Incidently, for those interested in the connection between the Treaty of Rome, the Treaty of Maastricht and the European (Economic) Community created by these treaties, you may want to read the following synthesis.