Mobile data-roaming charges for smartphones look set to drop to as low as 16p per megabyte if binding EU legislation is passed in a vote today at the European Parliament.
In a blow to the bulging profit margins of mobile phone carriers such as O2, Vodafone and Orange European legislators today vote on enforcing caps on data-roaming across the continent.
The bill to cut bills is aimed at reducing roaming charges for mobile data, voice and text messages in EU countries.
Today’s vote is the final stage in passing the EU data-roaming legislation.
EU Digital Agenda Commissioner Neelie Kroes describes high roaming charges as "an irritant for citizens, and an obstacle to the single market".
Last year she declared war on the big mobile carriers, who "currently enjoy outrageous profit margins".
"These days, mobiles are everywhere. People expect to use their phones wherever they go. Especially across internal borders that are supposed to have disappeared. And better smartphones, tablets and online content mean a boom in mobile data," she told the EU Parliament.
The current legislation capping roaming charges for phone calls and SMS messaging expires on 30 June 2012. After “a thorough review and extensive consultations,” the European Commission concluded that the roaming market is “not competitive enough and that consumers are paying too much”.
On 28 March, the European Parliament and the Council of Ministers reached a first-reading agreement on the new regulation on roaming, which includes price ceilings lower than those set by the European Commission in its original proposal, as requested by the Industry, Research and Energy Committee.
If passed the legislation will introduce retail price caps on roaming data. From this July the maximum per megabyte charge will be 56p (70 euro cents). This will drop further to 36p (45 cents) in July 2013, and 16p in July 2014. All prices exclude VAT.
The legislation is intended to introduce more competition into the mobile network market, by decoupling roaming packages from standard domestic packages.
Domestic mobile service suppliers would also have to enable their customers to access mobile local data services while abroad without having to unsubscribe from their existing data roaming contract or arrangement, and while keeping their mobile number.
Such separation of domestic and international roaming packages won’t come into force until 2014, but as from 1 July 2012 virtual mobile network operators (MVNOs) that don’t have their own networks will have the right the access other operator's networks at wholesale prices in order to provide roaming services. This will encourage more operators to compete on the roaming market, says the European Parliament.
Kroes is hopeful that the legislation will create a “future-proof solution".
"Injecting competition into roaming markets will mean, for the first time ever, a structural, sustainable way to protect consumers.
"This agreement removes that constraint, by capping data charges, and by letting people choose their data roaming provider – perhaps just as easily as they'd choose a Wi-Fi network," she said.
Under the proposal, caps on prices operators charge each other would fall annually until 2014, reflecting the declining costs of providing roaming services.