Neelie Kroes, Vice-President of the European Commission responsible for the Digital Agenda, has pulled no punches as she outlines the EC’s position on roaming charges.
She said the EC intends to introduce "profound structural market changes" by stimulating competition and continuing to cap retail prices up until 2016.
Here, in full, are her opening remarks at a press conference this morning:
"The European Commission has decided to propose a fundamentally new approach to tackling the very high prices paid by consumers and businesses when they use mobile networks in another EU country.
We are proposing a long-term structural solution to get to the root cause of roaming rip-offs, namely the lack of competition. By giving mobile users more choice, and by making it easier for alternative operators to gain access to the roaming market. For voice, for text, and for data.
Just as structural measures to increase competition in air travel have brought down air fares and increased choice very substantially, I am confident that structural measures to increase competition on the roaming market will ensure customers get a significantly better deal in terms of prices and choice of services.
In other words, these proposed structural measures would be the most effective and most sustainable way of reaching the Digital Agenda target of ensuring that the difference between roaming and national tariffs should approach zero by 2015.
Until these structural measures make their impact on prices, we need to give consumers a safety net. We are therefore proposing to introduce retail price caps for data roaming and to keep in place retail price caps for voice calls and text messages. These price caps will come down over time.
Within a few years, our structural solutions to boost competition will kick in to bring prices below the level of the caps, bringing sustainable benefits to European consumers and businesses.
Ladies and gentlemen, a mobile should be mobile. But many people currently switch off their phones, smart phones and other mobile devices when travelling to another EU country because the current prices for roaming calls, texts and data access are so high.
We have examined the roaming market closely. We have consulted publicly, and we have looked at market data.
I'm sorry to say that we have been forced to conclude that the market has not moved on.
Competition is still very weak. Customers still get a raw deal when they cross borders. Operators still enjoy outrageous margins, particularly on data downloads.
Within a Single Market, there is simply no justification for huge mark-ups, just because you've crossed an invisible internal border that is supposed to have disappeared. And just because customers have little or no choice in the matter.
For example, people often pay over 2 euros per megabyte of data downloaded when roaming, whereas operators typically charge each other substantially less than 50 cents.
Thi s has got to stop.
We have already taken measures to protect the consumer against this. We have 'contained' the problem through price caps, wholesale and retail. And consumers are also better protected from unpleasant "bill shocks" through the cut-off limit on data roaming.
But these have been temporary stopgap measures, not a durable solution. Our latest evidence shows that operators are still pricing close to the maximum safeguard levels, and that consumers are not getting the benefit of lower wholesale prices. The retail price caps have become price floors because, given the current lack of competition, operators have no incentive to offer prices significantly below the regulated caps.
We are proposing to introduce profound structural market changes because the time has come to tackle the root cause of the problem, the lack of competition, rather than trying to regulate prices forever. Until now, we have merely treated the symptoms of high prices - our new solution will introduce competition and cure the patient for good. To mix my metaphors, you can try to plug holes in the dyke with your fingers for a limited period but ultimately you have to repair the dyke.
These structural measures will stimulate both supply and demand for roaming services.
On the supply side, our proposals would make it easier for alternative operators to enter the roaming market. In particular, network operators would have to give network access to alternative operators from other Member States at regulated wholesale prices. This would make it easier for alternative operators to offer competitive roaming services.
On the demand side, we want to give consumers more transparency and more choice. Our proposals would offer them the right to choose an alternative provider for EU-wide roaming services, benefiting from lower prices, while keeping their usual provider when they're at home.
If people do opt for a separate roaming contract, the phone will automatically switch to their pre-selected roaming provider when travelling - using the same phone number and without changing their SIM card every time.
This proposal would provide a sustainable solution which would stop at source the fundamental problem of roaming rip-offs: for voice, for texts, for data. It would stop operators taking advantage of market dysfunction to make a quick profit at the expense of consumers. And it would make it cheaper and easier to use your mobile when you are travelling within the EU.
As for the 'safety net' price caps, we are proposing to bring them down significantly within a short space of time.
For those downloading or browsing the Internet, we will also introduce a new retail cap on data roaming. A cap which will also decrease over time.
We are proposing that by July 2014, retail caps before VAT would reach:
- 50 cents per megabyte of data
- 24 cents per minute for a call made
- 10 cents per minute for calls received and
- 10 cents for a text.
These retail price caps would remain in place until 2016 as a safety net. By then at the latest, the structural measures to enhance competition will have delivered innovative pan-European roaming offers and cheaper prices significantly below the caps.
The proposals must be agreed by Council and European Parliament before they can take effect. I look forward to constructive debate with them, with a view to ensuring adoption of these proposals before the expiry of the current rules in June 2012.
I am sure we can count on the support of these institutions. For the sake of a competitive single market, and for the sake of the European consumer."