Wednesday, May 17, 2006

Cui bono?

Dun roaming... chargesThe naked populism of the EU in seeking to cut mobile phone roaming charges is getting increasingly surreal.

Following the opposition of the industry regulators, which came in the wake of some of the major players slashing their own charges, it now transpires that the EU's plan could have the effect of increasing domestic mobile charges.

This is according to Reuters which is retailing warnings from operators, after EU information society and media commissioner Viviane Reding revealed the detail of her proposal to MEPs in Strasbourg yesterday.

Inbound calls from abroad, it seems, would be free of roaming charges, while an outgoing call would be charged at the same rate as if it had been dialled back home, rules that could see operators being forced to offer outbound roaming services at up to 19 percent below cost, wiping €4.3 billion from the European industry's collective revenues and €2.3 billion from its profits. Some operators could see their profits fall by as much as 20 percent.

Vodafone, one of the biggest operators in Europe, said the proposal would be unlawful and leave customers worse off as operators will not be able to subsidise loss-making inbound calls.

ETNO, the European Telecommunications Network Operators, which represents incumbent national operators said Reding has put forward plans before completing an in-depth assessment of their likely impact on customers and the industry. This is, it said, contrary to the commission's core "better regulation" policy of completing an assessment first to see if the benefits of legislation outweigh the cost.

Reding, however, told MEPs that she would not be swayed by industry's concerns or pre-emptive tariff cuts. But this may have something to do with the fact that she has strong support in the EU parliament where, it is said, this is one of the most popular policies to come out of Brussels in years.

And who are likely to be substantial personal beneficiaries from the reduction in roaming charges? Why, MEPs of course.


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