BRUSSELS (Reuters) - The cost of sending a text message from the bar or the beach when mobile phone users are outside their home state in the European Union will be cut by 70 percent from next year under new plans, an EU source said.
EU Telecoms Commissioner Viviane Reding will announce outline plans on Tuesday that include extending price caps on roamed voice calls for another three years, the source added.
After the "No" vote in the Irish referendum on the Lisbon Treaty in June, Brussels is keen to show it has a role to play in the lives of the blocs 490 million citizens.
Price caps on roamed voice calls introduced last year by Reding were one of Brussels most popular policies ever.
A formal legislative proposal will be made in the autumn and could come into force by the summer of 2009.
As the European summer holiday season is getting under way, Redings proposal for extending the legislation to cap the price of texts will also help cut bills landing on doormats back home.
Some 2.5 billion roamed text messages are sent each year.
National telecoms watchdogs in the EU say the average retail price of sending a text when roaming in the bloc is 29 euro cents (46 U.S. cents) and a retail "Eurotariff" of 11 to 15 cents would allow for full recovery of costs and give operators a reasonable return.
Reding gave operators a retail target of 12 cents per text but a study for the Danish government recommended 4.2 cents. The retail cap would be around the 12 cents level and a wholesale cap probably between 4 and 8 cents, a Commission source said.
In data, operators will get more time over the summer to cut prices further otherwise caps may be included in the autumn proposal, the source said.
Data roaming is when a customer uses his laptop or mobile phone abroad to send emails or download a song.
On Tuesday, Reding will also call for greater transparency in data roaming tariffs to avoid "bill shock."
The text market is mature but data roaming is still in its infancy. Telecoms regulators and operators have insisted that price caps would not be appropriate.
Mobile phone industry officials said the price of roamed data and texts was falling fast while the voice roaming regulation introduced last year "has given consumers little benefit and stifled market growth."
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The measures will need approval from EU governments and the European Parliament to come into force.
Reding warned mobile phone giants such as Vodafone (VOD.L), O2 (TEF.MC), T-Mobile (DTEGn.DE) and Orange (FTE.PA) in February that she would propose price caps unless they slashed the cost of roamed texts and data transfer.
Operators say they could not introduce coordinated price cuts to similar levels for fear of triggering antitrust probes. Many have cut the price of data roaming and say they offer free texts as part of packages in some cases.
"European mobile operators are improving transparency around data roaming prices and reducing the likelihood of unexpected bills," a mobile phone industry official said.
Reding is set to say a three-year extension on roamed voice caps to 2013 is needed as operators have cut prices to just below the ceiling, a sign Reding and telecoms regulators say shows a lack of vigorous competition.
Commission officials have indicated that the cap on making a roamed call could fall from 46 cents this year to 32 cents by 2013.
For a big operator like Vodafone, texts and data roaming represent about 1 percent each of revenues and Redings proposals will have a minor impact compared with voice caps.
"It makes great headlines in the short term but the consequences wont be seen for some time. Its naive to think companies can keep taking it on the chin," a senior operator official said.
The biggest hit operators face comes from separate proposals Reding is due to finalize in the autumn to cut by 70 percent termination fees operators charge each other for handling calls.
This sector is five times the size of roamed services.
Vodafone has said slashing termination fees would inevitably make it more expensive for customers to own a mobile phone as costs are recouped through introducing an effective fee.
(Editing by Sue Thomas)
EU Telecoms Commissioner Viviane Reding will announce outline plans on Tuesday that include extending price caps on roamed voice calls for another three years, the source added.
After the "No" vote in the Irish referendum on the Lisbon Treaty in June, Brussels is keen to show it has a role to play in the lives of the blocs 490 million citizens.
Price caps on roamed voice calls introduced last year by Reding were one of Brussels most popular policies ever.
A formal legislative proposal will be made in the autumn and could come into force by the summer of 2009.
As the European summer holiday season is getting under way, Redings proposal for extending the legislation to cap the price of texts will also help cut bills landing on doormats back home.
Some 2.5 billion roamed text messages are sent each year.
National telecoms watchdogs in the EU say the average retail price of sending a text when roaming in the bloc is 29 euro cents (46 U.S. cents) and a retail "Eurotariff" of 11 to 15 cents would allow for full recovery of costs and give operators a reasonable return.
Reding gave operators a retail target of 12 cents per text but a study for the Danish government recommended 4.2 cents. The retail cap would be around the 12 cents level and a wholesale cap probably between 4 and 8 cents, a Commission source said.
In data, operators will get more time over the summer to cut prices further otherwise caps may be included in the autumn proposal, the source said.
Data roaming is when a customer uses his laptop or mobile phone abroad to send emails or download a song.
On Tuesday, Reding will also call for greater transparency in data roaming tariffs to avoid "bill shock."
The text market is mature but data roaming is still in its infancy. Telecoms regulators and operators have insisted that price caps would not be appropriate.
Mobile phone industry officials said the price of roamed data and texts was falling fast while the voice roaming regulation introduced last year "has given consumers little benefit and stifled market growth."
HEADLINE GRABBING
The measures will need approval from EU governments and the European Parliament to come into force.
Reding warned mobile phone giants such as Vodafone (VOD.L), O2 (TEF.MC), T-Mobile (DTEGn.DE) and Orange (FTE.PA) in February that she would propose price caps unless they slashed the cost of roamed texts and data transfer.
Operators say they could not introduce coordinated price cuts to similar levels for fear of triggering antitrust probes. Many have cut the price of data roaming and say they offer free texts as part of packages in some cases.
"European mobile operators are improving transparency around data roaming prices and reducing the likelihood of unexpected bills," a mobile phone industry official said.
Reding is set to say a three-year extension on roamed voice caps to 2013 is needed as operators have cut prices to just below the ceiling, a sign Reding and telecoms regulators say shows a lack of vigorous competition.
Commission officials have indicated that the cap on making a roamed call could fall from 46 cents this year to 32 cents by 2013.
For a big operator like Vodafone, texts and data roaming represent about 1 percent each of revenues and Redings proposals will have a minor impact compared with voice caps.
"It makes great headlines in the short term but the consequences wont be seen for some time. Its naive to think companies can keep taking it on the chin," a senior operator official said.
The biggest hit operators face comes from separate proposals Reding is due to finalize in the autumn to cut by 70 percent termination fees operators charge each other for handling calls.
This sector is five times the size of roamed services.
Vodafone has said slashing termination fees would inevitably make it more expensive for customers to own a mobile phone as costs are recouped through introducing an effective fee.
(Editing by Sue Thomas)
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