EU gives companies July 1 deadline to cut Internet fees for travelers roaming abroad

Eds: Moving on financial services.

By AOIFE WHITE

AP Business Writer

BRUSSELS, Belgium (AP) -- A European Union official told mobile phone operators Monday their charges for wireless Internet and text messages must drop by July 1 to avoid EU intervention.

Vodafone Group PLC, Royal KPN NV of the Netherlands and Germany's E-Plus -- under threat of a price cap -- all cut some prices last week to bring the cost of using one's phone abroad closer to the cost at home.

EU Telecommunications Commissioner Viviane Reding said this was a good first move. But she said costs faced by tourists and business travelers sending text messages or checking e-mail on wireless devices must be cut further.

"The EU cannot accept that mobile operators make up to 20 times more profit on roaming customers than on their domestic customers," she said in a meeting with mobile phone company chief executives in Barcelona.

"To avoid regulation, the industry will have to show its responsiveness to consumer concerns by credible reductions," she said.

Costs people pay for making mobile phone calls outside their home countries have dropped by up to 60 percent since the European Commission capped fees on voice service last year. That cap doesn't cover mobile Internet or some 200 billion text messages that are sent annually in western Europe.

Mobile operators draw between 10 percent and 18 percent of their revenues from international roaming charges, according to research firm Evalueserve.

Reding said she would accept a premium of 2 or 3 euro cents -- 3 or 4 U.S. cents -- above domestic texting charges but anything more was unjustifiable.

Crossing a border within the EU's 27 nations can hike the costs of sending a text message by up to 25 times, according to a European regulators' report last month.

Sending a text at home costs 7 to 14 U.S. cents, but the average cost of sending one from abroad is 42 U.S. cents, and it can go as high as 73 U.S. cents.

Reding said she would be more reluctant to intervene in data downloading because the market is still growing and operators are testing different price models to boost uptake.

But mobile operators need to be clearer about what they do charge consumers to avoid "shock bills" of several thousand euros for accessing the Internet from a phone. She also called for all companies to offer a cheap data roaming package based on a single extra fee.

Downloading 1 megabyte of data on a mobile phone costs an average of $7.60 -- but as much as $16 in Poland and Luxembourg, the European Regulators Group said. So grabbing a song from a mobile phone can cost $21.77 and downloading a PowerPoint presentation can cost $14.51 and a single newspaper article can cost $1.45 to $2.90.

Reding said she had to act because high charges are to blame for disappointing growth in mobile Internet use in Europe.

Europe's love affair with mobile phones is unrivaled, however, with handsets in use here outnumbering the 490 million residents.