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EU: Mobile Roaming Charges

Volume 712: debated on Monday 29 June 2009


Asked By

To ask Her Majesty’s Government what representations they are making to the European Union to reduce the cost of mobile roaming charges on data within the European Union.

My Lords, an amendment to the 2007 European roaming regulation will put an upper limit on operators’ wholesale charges of €1 per megabit of data transmitted from 1 July this year. This will reduce to 80 cents and 50 cents per megabit on 1 July 2010 and 2011 respectively. Consumers will also benefit from obligations to provide greater transparency on pricing on the cost of data roaming.

My Lords, I thank the Minister for that Answer. It is encouraging that these prices are coming down, but data roaming charges in the EU are still twice those of voice roaming charges, which are significantly more than domestic prices. It strikes me that that is something of a rip-off. In a world of Twitter, YouTube, Facebook and all the rest of it, it is essential that these prices are brought down. First, what are the plans to have these prices reduced further? Secondly, it appears that these network operators are acting in concert. Are there any plans within the EU to investigate their activities?

My Lords, the noble Lord makes a number of points. He is right in his observation that there are an increasing number of alternative sources of communication across this country and Europe. He is also right to identify that, while voice roaming prices are coming down significantly in some areas, data roaming prices are still higher. During the current framework review, there was a debate across Europe as to whether retail price capping should be introduced on data roaming in the same way as it has been on voice roaming. A decision was made not to do that but to apply regulation on the wholesale rates in the first instance to see whether that brought the necessary competitive benefit at the retail level. At the retail level on voice charging, we are seeing significant increases in competition and lower prices. Many Members of this House will have seen advertisements from a range of operators advertising free roaming across Europe this summer. As to the suggestion of collusion between operators, that would be a serious breach of competition law and I believe that action would be taken if it had been happening.

My Lords, I appreciate that this is a structural problem in the department that the noble Lord is about to leave, but does he accept that there is a problem when one department protects, on the one hand, the interests of the mobile phone operators, whose interest is to maintain higher roaming charges—and mobile phone operators are a significant player in UK business—and, on the other hand, the interests of the consumer, who has an interest in those charges being dropped? How can one department look after the interests of both?

My Lords, I am not sure that I recognise or accept the conflict as described. As the noble Lord is aware, this sector is regulated by an independent statutory regulator, which is a competition authority in its own right and can therefore not only apply forensic regulation for the sector but do so within the frame of competition law. As far as the department is concerned, it is perfectly possible for it to recognise both the industrial strength and advantage that we have in this sector and, at the same time, the fact that there are consumer interests that need to be protected.

My Lords, while everyone will, I am sure, welcome cheaper roaming data and call charges, have the Government given any thought to whether putting a cap on charging in one area might risk the communications companies increasing charges elsewhere in their businesses or reducing quality to compensate? What discussions have been held with the EU about this?

My Lords, the noble Lord raises a relevant point, which was central to the Government’s decision not to support the imposition of retail price caps on data roaming at this stage, because, as he rightly observes, regulation applied in one area can have a displacement effect in another. In relation to voice roaming charges, many of the mobile network operators argued that we would see a significant increase in the price of handsets or increases in other prices, but the evidence is that this has not happened. However, that does not mean that we should not keep an eye out for it happening in other examples.

My Lords, does this not mean pan-European price control? Could that set a precedent for the control of other prices throughout the EU?

My Lords, it undoubtedly is a piece of pan-European price regulation, but it would be fair to say that the specifics of voice roaming charges across Europe lend themselves almost uniquely to the requirement to have a pan-European solution. Indeed, many voices—including my own, in other lives—argued strongly for the European Commission to take a lead on this, because it would be invidious for any individual country to take a leading position, as that country would have ended up doing what the noble Lord, Lord Razzall, was suggesting, and disadvantaging its own commercial interests in favour of other European country players. Therefore, this requires a European approach. As to whether it sets a precedent for others areas, I think that there are few other markets with the same characteristics.

My Lords, Does my noble friend agree that, if this sets a precedent, it sets a wholly desirable precedent that everybody in this House should welcome?