? European commission wants to reduce gap between domestic and overseas rates by 2015
? Orange and Vodafone announce big rises in UK mobile costs
The European commission has ordered mobile telecommunictions companies to cap the cost of making and receiving calls while abroad.
From today customers should pay no more than 32p a minute for calls made ? a 3p reduction ? and 10p a minute for calls received while within the EU.
However there are fears that firms are passing on the EU costs to UK consumers in the form of domestic price rises, with Orange and Vodafone introducing increases of up to 66% in pay as you go costs for calls and text.
The move is part of the commission's goal to narrow the gap between domestic and overseas call rates to virtually nothing by 2015. New regulation on data pricing and competition practices is to be announced on Tuesday 5 July.
Compulsory maximum roaming rates were first imposed on mobile network operators four years ago to tackle what the commission called the "roaming rip-off" ? network operators were said to be making profits of more than 200% for mobile calls made while in another EU country, and 300% or 400% for calls received.
Today's additional price drop means mobile roaming charges are about 75% cheaper on average than they were six years ago when the commission first urged operators to cut their rates voluntarily.
Existing rules to prevent bill shock for those using the internet via a mobile phone while abroad remain: operators must apply an automatic ?50 (�45) cut-off limit on accounts unless the customer explicitly agrees otherwise.
Monique Goyens, director general of the European Consumers' Organisation, said: "These new caps are slowly chipping away at the extortionate roaming prices some telecoms operators have been driving for years. These high prices need to be brought down so European phone owners' confidence can rise.
"A remarkable 72% of travellers still limit their roaming calls because of high charges. Such pricing is a denial of the very idea of the EU single market and free movement. It's logical legislation."
Nick Wright of billmonitor said: "While any reduction in extortionate roaming prices are of course welcome, the latest price cuts will leave few regular roaming customers rushing to make calls while on their summer holiday.
"The 10% cut in outbound roaming call prices will certainly help, but as the 40% of us who make roaming calls well know, it will be a drop in the ocean relative to already very high costs."
Double whammy of price increases
Earlier this week at least nine million Orange and Vodafone customers were warned they face steep rises in pay as you go costs of up to 66% for calls and texts.
From today, Orange customers will be charged an extra 25% on calls to mobiles, landlines and voicemail, while the cost of texting increased by 20%. From 14 July Vodafone customers on its Simply tariff will see the cost of their calls to mobiles, landlines and voicemail rise 19% and the cost of texting rise 20%. But Vodafone pay as you go customers not on the Simply tariff will see their minimum call charge rocket to 66%.
Ernest Doku of uSwitch.com said: "Pay as you go customers are being hit with a double whammy of price increases ? with both calls and texts going up they will be counting the cost whenever they pick up their mobile phone.
"Orange and Vodafone are two of the biggest networks and it's our only hope that the others don't follow suit. As it stands we expect around nine million prepay customers to be affected by these hikes. It's a real kick in the teeth for cash-strapped consumers that are already struggling to make ends meet."
Billmonitor's Wright said: "The networks might have made an anticipatory move to raise pay as you go costs knowing the EU ruling was coming, but these rises are also a direct result of Ofcom placing a cap on mobile termination rates earlier this year.
"The likes of Vodafone and Orange told Ofcom they would have to raise prices if they brought in the mobile termination rate cap, and that is what has happened.
"The impact of this new cap remains to be seen. We could see further price rises with the networks raising the cost of bundles so they are less of a bargain. Of course, they were making so much money from roaming charges that we might see no rise, but that's probably pie in the sky."
Doku said the best advice for pay as you go users worried about spiralling bills is to analyse whether they would be better off moving on to a lower value contract, depending on their average phone usage.
"A good solution for anyone nervous about getting tied in could be to keep your existing handset and take a 30-day sim-only deal, which currently start from just �10 a month for 100 minutes and 500 texts," he suggests.
"If you are happy to sign up for longer, there are some great pay monthly options out there and you could even land yourself with a free smartphone."
Source: http://www.guardian.co.uk/money/2011/jul/01/mobile-firms-cap-eu-roaming-costs
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