Mobile phone roaming fees slashed

location based services


Some of Europe's biggest mobile phone operators, including the UK's Orange and Germany's T-Mobile, have agreed to slash mobile phone roaming charges.
Other firms involved include Italy's Wind and Telecom Italia, Norway's Telenor SA and Sweden's TeliaSonera.
The decision comes after the European Commission targeted what it said were excessive tariffs for users when they made and received calls from abroad.
About 200 million mobile phone users in the European Union will benefit.
It's good to talk
The EC had threatened to draft a law that would have seen mobile phone users charged the same rate abroad as they were at home.
MOBILE COSTS ABROAD
Sample tariffs for four-minute peak time call in March 2006. Prices vary according to which UK network and host network are used. Source: European Commission
Calling the UK from Italy: 3.5-5.81 euros (£2.42-£4)
Receiving a call in Italy from the UK: 1.75-5.50 euros (£1.21-£3.80)
Calling the UK from Malta: 3.5-7.34 euros (£2.42-£5.06)
Receiving a call in Malta from the UK: 1.75-5.50 euros (£1.21-£3.80)
Calling France from Germany: 4 euros (£2.76)
Receiving a call in Germany from France: 1.36-1.88 euros (94p-£1.30)
Rene Obermann, chief executive officer of T-Mobile International, said Thursday's agreement "show that market forces in the mobile industry function and do not need regulatory intervention".
The companies said they would cap the average wholesale rate they charge when a client from another provider uses their network at 45 euro cents (31 pence) per minute from October.
They plan to reduce the cap to 36 euro cents a minute from October 2007 - a cut of almost half from the current wholesale prices.
The companies said they aimed to make sure customers were the winners from the reductions.
"The operators commit to pass the benefits of these wholesale reductions on to customers through market-driven reductions in retail prices as fully and quickly as possible," they said in a statement.
More to come?
Analysts estimate that roaming charges account for up to 15% of a mobile phone company's annual revenues and often carry higher margins than wholly domestic traffic.
When the EC fired its first shots across the bows of phone operators, the industry's global trade body, the GSM Association, argued that roaming charges had already fallen by 8% across Europe last year.
Operators complained that it was normal for making and receiving calls to cost more from abroad because there were additional costs.
A number of firms are expected to sign up to Thursday's agreement in coming years.
The EC is still continuing its investigation into the level of charges.