EU Turns Its Eye To Roaming Charges
By Carlo Longino, Fri Dec 10 20:30:00 GMT 2004

European regulators have launched an inquiry into the high charges carriers levy on roaming users.


Operators can charge seven to 15 times as much as domestic calls for those made when in foreign countries, a practice the European Regulators Group, made up of national regulatory bodies, hopes to change. The group has announced it's launching an investigation into roaming charges in the EU's 25 member states by sending all operators a questionnaire asking for details on their pricing. The group hopes to act by May 2005, and could go so far as to enact price ceilings on the charges to lower consumer prices.

It's not the first time the EU has taken exception to roaming fees: in July, the European competition commission accused UK operators Vodafone and O2 of overcharging foreign carriers for the airtime they purchase on a wholesale level and abusing their dominant positions in the market to support their high prices.

This could turn out to be another one of those little things that weighs on operators' finances, like the British government's forced cuts in mobile termination fees, which carriers there are warning could push down their revenues. The Irish telecoms regulator said several months ago that O2 overcharged 136,000 customers there for overseas calls, forcing it to repay EUR 722,000 -- a drop in the bucket, really, but if a similar figure was extended across a carrier's entire user base, it could get pretty hefty.

But the real worry for carriers won't be penalties, but rather being forced to cut their rates significantly. The artificially inflated rates represent a chunk of revenues under threat.