Wednesday, 22 April 2009

The Roaming Battle Rages On

The European Parliament held what in effect will be its last consequential Strasbourg plenary session before June's election today, and there was a lot put on the table. One of today's items up for a vote was a measure to further limit the amount EU mobile phone operators can charge their customers when they are roaming in other EU countries. The parliament passed the measure, and it is well on its way to becoming law.

The parliament had already capped the roaming rates for calls back in 2007, capping rates at 45 euro cents (£0.39) per minute to make a call and (£0.19) per minute to receive a call. Before that some mobile operators were charging as much as £1.50 a minute to make a call while roaming in the EU. This new legislation goes even further and will require mobile operators to lower the roaming cap down to 35 euro cents (£0.30) to make a call within the EU. It would also set a cap on sending a text within the block at 11 euro cents (£.09). Given that T-Mobile now charges me £0.40 per text message I send while roaming in the EU, this is a significant cut. Additionally, the legislation will cap mobile internet data charges to 1 euro per megabite and force companies to round to the nearest second when charging for roaming rather than to the nearest minute. (Interesting sidenote: in Switzerland T-Mobile is still charging me about a pound per minute to use my phone, as they're not part of the EU).

This has been a pet issue of mine for awhile, but a few British MEPs making statements in parliament today got me thinking about the issue in a way I hadn't before. Conservative London MEP Syed Kamall addressed the chamber and made the argument that while this legislation may benefit the people in that room (MEPs, civil servants, journalists, businessmen), it could actually harm the poor, who rarely leave their own country and have no use for lower roaming charges. His fear, he said, was that the mobile operators would have to pass the lost profit from roaming costs on to the domestic customers, "robbing the poor to give to the rich." A teenager living on a council estate in his constiuency, he argued, was going to be charged more money so that an MEP can chat away on his mobile while in France.

While I do have to begrudgingly admit that yes, most Europeans don't use their mobiles for roaming (Kamall cited a figure that said 70 percent of European mobile users don't roam at all in a given year), really his assertion that somehow it is only the rich elite who would have any need for a telephone while in another EU country is rather strange. This is, after all, supposed to be a common market. Should it really be assumed that someone is some kind of monied aristocrat just because they leave their country every once in awhile?

But even beyond the logic of his original assertion, it also seems odd to be so concerned about a company passing on costs it shouldn't have been collecting in the first place. The mobile companies have been making a huge profit off of these roaming charges. According to the European Regulators Group, European mobile operators make up to 20 times more profit on customers when they're roaming as when they are in their home countries. It actually only costs the operator a few cents per minute to connect these calls, and even less if it's the same company (a T-Mobile UK customer roaming with T-Mobile Germany for instance). The high charge of roaming is not to make up for the expensive cost of connecting a customer's call when they're abroad, but rather it's been a cynical way to get loads of cash out of two small groups that won't raise a fuss about it: the occasional holiday traveller who doesn't think about money when he's on vacation, and the frequent international business traveller who probably doesn't even see his phone bill because his company pays for it.

In the end, Kamall's insistence that the MEPs are selfishly voting in legislation that benefits themselves and not Joe Six-Pack back in their constituencies doesn't hold water. It would be a legitimate argument if the rates the mobile operators were charging really reflected what it costs them to connect the call, but that is clearly not the case. They've instead been making a hefty profit off of a vulnerable group that can't complain about it. Even though we international travellers may be few in number, we can't be expected to subsidize everyone else's artificially low rates by being forced to pay exploitative roaming charges.

The new rates are set to take effect 1 July, so just in time for people's summer holidays. As Telecommunications Commissioner Viviane said earlier, "Today's vote marks the definite end of the roaming rip-off in Europe."


Anonymous said...

about time!

Andrew said...

Sorry, I can't get excited about a phone charger. No wonder the EU bores most Europeans.