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EU cracks down on mobile roaming charges
EU seeks to spur competition in mobile roaming, put caps on data, voice charges
By The Associated Press

BRUSSELS (AP) ' The European Union is introducing new rules that would make it cheaper to use mobile and smartphones abroad.

The proposals from the EU's executive Commission Wednesday seek to spur competition among providers and put new limits on roaming charges.

For the first time, the EU is also slapping caps on the price individuals have to pay for going online from a smartphone or tablet computer when moving from one country to another staring in July 2012. The new rules will be valid in the bloc's 27 members as well as Iceland, Liechtenstein and Norway.

While the caps will bring quick relief for consumers, many of whom still switch their phones off when crossing national borders, the European Commission wants to move beyond price limits and target what it sees as the root causes of the high roaming prices.

"We are proposing a long-term structural solution to get to the root cause of roaming rip-offs, namely the lack of competition," said Neelie Kroes, who is in charge of the EU's digital agenda. "By giving mobile users more choice, and by making it easier for alternative operators to gain access to the roaming market."

From July 2014 operators will have to open their networks to providers from another EU state, which would give consumers more firms to choose from, Kroes said.

That move could make it easier for existing operators to offer services in a different country or give opportunities to new providers that don't have their own networks.

Also from mid-2014, consumers will be able to sign a separate roaming contract, allowing them to take advantage of cheaper offers when moving about.

"If people do opt for a separate roaming contract, the phone will automatically switch to their preselected roaming provider when traveling ' using the same phone number and without changing their SIM card every time," Kroes said.

As long as EU states and the European Parliament ' which already indicated approval Wednesday ' sign off on the new rules, they will kick in when the bloc's existing regulation on mobile roaming expires at the end of June next year.

While the current rules have forced the price of making calls down to 35 euro cents (about 50 U.S. cents) a minute when traveling in another EU country and kept a lid on the cost of receiving calls and sending text messages, the Commission believes that charges remain way too high.

"We have examined the roaming market closely," Kroes said. "I'm sorry to say that we have been forced to conclude that the market has not moved on."

The Commission's goal is to bring roaming prices in line with national ones by 2015, an important step in getting Europe closer together and spurring business and freedom of movement in the EU's internal market.

The new caps on data roaming will be the first immediate benefit for users of smartphones or tablet computer. Using mobile Internet in another EU country can quickly drive up phone bills, with prices for downloading one megabyte of data averaging euro2.23 ($3.22) but sometimes going up to euro12 ($17.35), according to the Commission.

One megabyte is equivalent to about 100 e-mails without attachments or a few seconds of streaming video online. Under the new proposal, charges for data roaming would have to come down to 90 cents a megabyte by July next year and sink to 50 cents by 2014.

By that date, the price of making calls would be capped at 24 cents a minute, while incoming calls and text messages would cost 10 cents.

Industry representatives came out against the Commission's proposals.

"The market for mobile data traffic is still very young and should at this early stage only be regulated on the wholesale level," said Juergen Gruetzner, the head of VATM, a German trade association of telecoms providers, whose members also include the German subsidiaries of companies like U.K.-based BT Group PLC and Spain's Telefonica SA.

Gruetzner said plans to split roaming from national services "appear badly thought through on a technical and economic level and don't improve the situation of consumers."

He added that some providers already offer data roaming plans that fall below the Commission's cost caps.

Germany's minister for technology and the economy, meanwhile, welcomed the proposals. "Intensifying competition on the roaming markets is a good thing," Philipp Roesler said on a visit to Brussels. "If the planned measures work and intensified competition leads to more attractive offers, the rigid price provisions can become superfluous in the foreseeable future."

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