Cost of using mobile phones abroad slashed by 60%

 

by SEAN POULTER - More by this author » Last updated at 18:32pm on 23rd May 2007 Comments (4)

The EU negotiators have agreed to cap mobile phone calls to 33p per minute

 

 

The rip-off cost of using mobile phones overseas is to be cut in a move that will deliver savings to millions of holidaymakers.

EU officials and MEPs heralded a decision to cap mobile charges - the equivalent of cutting them by 60 per cent - as evidence of the benefits of being a member of the 27 nation block.

However, consumer experts questioned whether the public will see any real benefit.

The scale of the cuts has been dramatically watered down and will only apply to the EU zone.

In addition, they will not come into effect until September, which would miss this year's summer holidays.

Meanwhile the big mobile phone networks - such as Vodafone, Orange, T-mobile and O2 - are expected to put up other charges to offset any lost income.

The British Government, in the shape of trade minister Margaret Hodge, has been in the vanguard of efforts to water down the price cut plans.

The minister backed industry complaints that price caps on so-called roaming charges were likely to bring rises in other areas.

The net effect of the opposition is that the controls are considerably more generous to the industry than first envisaged.

The cost of making a call will be capped at 33p a minute, plus VAT, which is higher than the original proposal of 27p.

The cap for receiving calls will be set at 16p a minute, plus VAT, which is way above the orginal plan of 10p.

Currently, UK customers can be charged up to 94p a minute both to make and receive calls if they on holiday or business overseas.

These high charges, repeated across the EU, allow the big mobile networks, such as Vodafone, Orange, T-mobile, O2, to make £5.7 billion a year.

The European consumer body BEUC complained that the price caps are not low enough and will allow the industry to continue to make huge profits.

A spokesman said: "Unfortunately, the price caps are still too high and are not linked to the actual costs for operators."

However, the body welcomed the fact that networks will be required to spell out charges more clearly.

They will have to send text messages to people informing them of the call charge when their phone is used in another EU state.

Mobile tariff expert at moneysupermarket.com Rob Barnes said: "While the new deal looks great ... the EU seems to have backed down when faced with stiff opposition from UK and European operators.

"The average cost of making a mobile call in the UK is between 3p and 10p per minute when on a contract, yet calling home from another EU state will still be up to 33p per minute, plus VAT.

"Costs will be forced down over time, but it seems we are a long way from fair call charges throughout Europe."

Karen Darby, of the price comparison company SimplySwitch.com, said: "Roaming charges have been far too high for far too long and something had to be done."

Mobile phone expert at price comparison company uSwitch.com Chris Frost said the move "may not be all it is cracked up to be".

He said: "This new legislation does not take into account popular holiday and business destinations outside the EU such as the US, Canada, Australia, Switzerland and Asia.

"We could potentially see roaming rates increased in these countries to recoup the fall in revenue."

The cap will fall over a three-year period through to 2009 and then be dropped unless EU states decide it is still necessary to protect consumers.

The controls were supported by a vote of MEPs in Stasbourg yesterday and final approval will be given by a meeting of the Council of Ministers on June 7.

However, UK consumers won't see reductions until September or, possibly, October.

Mrs Hodge said the final deal was good news for consumers. She believes the networks have been given sufficient room to make a profit without putting up other charges.

"Price cuts on roaming are likely to be in place by late summer. This will be great news for holidaymakers using UK mobiles abroad as well as bringing down costs for UK businesses when they travel overseas," she said.

EU Telecoms Commissioner Viviane Reding hailed the deal: "Today is a good day for consumers and business travellers in the EU.

"Mobile phone customers will start benefiting from substantially-reduced roaming charges when travelling from one EU country to another.

"Europe's internal market will finally become truly borderless, even for mobile phone bills."

Lib-Dem MEP and industry spokesman Fiona Hall was also enthusiastic: "Today we see a clear case of the practical benefits of the European Union.

"Action at an EU level has come to the rescue of consumers, who had been exploited and manipulated by the mobile phone companies for far too long."

However, the Euro-sceptic UKIP leader and MEP Nigel Farage dismissed the whole process as "a giant publicity stunt".

Oh joy, so the cost of using mobile phones at home will be risen to counter-act the lose of income from abroad people :(

Not before time, someone at work got a call from a friend in South Africa using their skype account.. the 15 minute call cost them about 15eurocents, thats 10p.

 

Make the comparison, and us Brits are getting ripped off even after these reductions.