EU pressures mobile operators to lower data roaming rates

BARCELONA, SPAIN: After forcing Europe's mobile operators to cut rates for making and receiving phone calls abroad, the European Union's top telecoms regulator has set her sights on prices for downloading and surfing the Web wirelessly.

EU Commissioner Viviane Reding has already warned carriers that prices for so-called data roaming have to fall by the summer or else -- a message she will likely repeat at the industry's main trade show, the Mobile World Congress in Barcelona, which starts on Monday.

"Industry claims they don't need regulation. I say get it done," Reding said last month.

The 27-nation EU adopted a proposal from Reding last year to cut the cost of making and receiving voice calls outside a person's home country but the proposal did not include data and text messages.

A study by the European Regulators Group published in January found that transferring one megabyte of data -- the size of a large spreadsheet -- while roaming on average cost 5.24 euros ($7.59) in the EU in the third quarter of last year.

By contrast, several operators offer domestic data plans that include a gigabyte of data, or roughly a thousand megabytes, for less than 50 euros.

Telecoms consultant John Strand said the margins on data roaming were "sky high", but he estimated it only represented around 2 to 4 percent of an operator's revenue.

Vodafone, the world's largest mobile phone company by revenue, said last month that data roaming was less than 1 percent of revenue.

The industry argues that the market for data roaming is still young and that operators are already cutting prices.

Vodafone said on Friday it would reduce prices by up to 45 percent on its monthly data roaming tariff for European business travellers to make it cheaper to use laptop computers wirelessly when abroad.

The carrier will charge a maximum of 60 euros per month for 150 megabytes of data.

KPN, 3 Group and Polish operator Play said this week they had agreed to cut the price they charge each other for one megabyte of data roaming to 0.25 euros, a quarter of the lowest currently available wholesale rate in Europe.

Spanish firm Telefonica has also cut its roaming data fees in the past month.

Operators may be able to at least partially recoup the profits they forgo by increased usage.

Strand said there was no exact data on whether consumers had made more calls abroad after voice roaming prices were cut, but added: "Many operators tell me that traffic is going up and they look forward to the next holiday season."