EU Modifies Roaming Proposal, Will Help North Europeans

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EU Modifies Roaming Proposal, Will Help North Europeans

BRUSSELS -(Dow Jones)- European regulators have modified their proposal to slash mobile phone roaming tariffs in a way that will hurt Southern European operators more than Northern Europeans, a European Commission spokesman says.

Brussels originally wanted to cap at cost the wholesale rates operators offer each other for providing roaming connections. But Commission spokesman Martyn Selmayr said that national regulators found this plan too complicated, saying it would take up to five years of research to come up with the correct charges.

Instead, Selmayr said the regulators have decided to take the average cost in member states for wholesale charges. Such charges are high in Southern Europe and low in Northern Europe.

"This is finetuning, a quicker and simpler solution than our original idea," Selmayr said. "It will hurt low cost countries such as Finland less than high cost countries" such as Spain and Italy.

European Union telecommunications commissioner Viviane Reding in March accused mobile phone operators of not getting her "message" that roaming charges are too high. She vowed to introduce a proposal in early July forcing operators to eliminate all roaming charges levied to end-users for receiving a call when traveling abroad.

The Commission's proposal met resistance from national regulators last month. They would prefer to regulate the wholesale prices rather than end-user prices as the Commission had suggested.

But the Commission plan will include controls on retail prices, Selmayr said. The plans to make the formal proposal in July. People close to the case say the Commission remains undecided whether to include price controls on receiving data such as e-mail while travelling abroad.

Since the threat of regulation has been raised, many of Europe's leading mobile phone operators have agreed to slash the price of their wholesale connections. T-Mobile, a unit of Deutsche Telekom, Orange, a unit of France Telecom, Telecom Italia, Telenor, TeliaSonera and Wind, which together have customers representing almost 200 million mobile users Europe, have agreed to cap the average wholesale rates they offer each other for providing roaming services at EUR0.45 per minute from October 2006 and EUR0.36 per minute from October 2007.

The offer applies only to the six companies involved and not to operations outside Euorope. But the companies are leaving open the possibility that non-European operators will join them in reducing the connection charges. Within Europe, both Telefonica and Vodafone Group, two of the largest European telecom operators, also are not participating, though Vodafone previously announced plans to cut roaming charges by around 40% by April 2007. This includes slashing wholesale prices to a maximum of EUR0.45 per minute.

Telefonica's Moviles has said it and its O2 units said in May they will offer a set of new packages with lower roaming charges from this summer, though no announcement on cutting wholesale prices has been made.

At present, Southern European operators receive more money than Northern operators from roaming, because their countries receive large amounts of tourists. Southern European wholesale connection charges are also more expensive than Northern European rates, telecom officials say.

-By William Echikson,Dow Jones Newswires;32-2-741-1480; william.echikson@dowjones.com

(END) Dow Jones Newswires

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