c.2014 New York Times News Service
c.2014 New York Times News Service
LONDON — The European Union on Tuesday cut cellphone roaming charges across the region by as much as 50 percent in the latest move to revamp how people communicate across the 28-country bloc.
The changes mean that people with mobile contracts from European providers will be charged less to make calls, send text messages and browse the Internet when using their smartphones in countries within the union. Companies have already increased roaming charges for European clients traveling outside the EU as a way to offset the lost revenue.
The reductions are part of plans by Europe’s policymakers to transform the region’s telecommunications infrastructure from one based on national borders into a pan-regional network in which consumers are not charged extra for using their phones when traveling in other EU countries.
While consumer advocates welcomed the price cuts, some analysts said the reductions would not be felt in many parts of Europe? because the majority of consumers still did not use roaming when traveling for fear of heavy charges.
“The new ruling won’t have a massive impact on the market,” said Jessica Ekholm, an analyst with the technology research firm Gartner, who added that 40 percent of Britons did not use roaming services while traveling overseas. “People still haven’t got used to using roaming abroad.”
The changes will only affect people in Europe who have contracts with local operators like Vodafone of Britain and Deutsche Telekom of Germany. International carriers, including U.S. giants like AT&T and Verizon Wireless, will still be able to set their own roaming charges for customers traveling in the EU.
As part of the cuts, data roaming charges — incurred, for example, when checking Facebook or streaming online videos — have been pared by 56 percent, to 20 euro cents (27 cents) per megabyte. Roaming charges for calls made in another EU country will cost 19 euro cents a minute, a reduction of 21 percent.
The changes are part of a nearly decade-long battle by the European Commission, the union’s executive arm, to reduce the amount that individuals pay for their mobile phone contracts. That fight included the adoption of tough competition rules that have limited mass consolidation by telecom operators across the region, leading to price wars between domestic carriers.
Europe’s policymakers are trying to phase out all cellphone roaming charges in the region by the end of next year, though they face stiff opposition from carriers and some politicians.
“This huge drop in data roaming prices will make a big difference to all of us this summer,” Neelie Kroes, the European commissioner in charge of the region’s digital agenda, said recently in a statement. “But it is not enough.”
While consumers are set to benefit from the price cuts, telecom operators warn that they will not be able to make investments needed to upgrade their mobile infrastructure if they cannot be sure to profit from the multibillion-dollar projects.
The European Union has lagged other places, including the U.S., in introducing so-called fourth-generation cellphone networks. And as other parts of the world, notably parts of Asia, look to extend their lead in fast mobile phone coverage, Europe’s carriers say they may have to raise domestic prices to offset the lost roaming-based revenue.
In 2016, telecom operators’ revenue from charges linked to international roaming may fall as much as 20 percent, according to Nitin Bhas, an analyst with Juniper Research.
In addition, a consortium of local telecom operators recently warned of the risk that domestic tariffs would rise for European consumers.
Despite the danger of increased prices, analysts say that carriers, particularly those with operations across Europe, already offer cellphone contracts without any roaming charges across the region. The packages are aimed at winning customers from rivals that still charge extra for making calls or using the Internet when traveling within Europe.
And because competition remains tough between local carriers, analysts say, the cuts in roaming are unlikely to lead to price increases within Europe.
“There’s little sign that domestic charges will go up,” said Luca Schiavoni, an analyst at the technology research company Ovum. “Carriers need to do more to convince customers to use roaming. Many people still just keep their smartphones switched off.”