Court Upholds EU Caps On Mobile Call Charges Abroad

8th Jun 2010 09:15

By Mike Gordon Of DOW JONES NEWSWIRES LUXEMBOURG (Dow Jones)--Europe's highest court Tuesday upheld a Europe-wide law forcing mobile operators to cut the rates they charge for using a mobile phone abroad. Four of Europe's largest mobile telecom operators--Vodafone Group Plc (VOD), Telefonica's (TEF) O2, Deutsche Telekom's (DT) T-Mobile and France Telecom's (FTE) Orange--failed in their challenge to the legality of the European Union's roaming regulation, passed in 2007, which imposed a substantial reduction in charges on the operators. "The roaming regulation is valid. The community had the right to impose caps on the prices charged by mobile telephone operators for roaming calls in the interest of the internal market," the European Court of Justice said in a statement. The regulation initially set a EUR0.49 cap for making calls and EUR0.24 for receiving calls when traveling abroad, with further reductions annually to reach EUR0.35 and EUR0.11 respectively in 2011. It applies to all 27 countries in the E.U. as well as Norway, Iceland and Liechtenstein. Before the E.U. regulation, a call in the E.U. could cost around EUR1.70 a minute for a German traveling in Austria and EUR2.50 for a Belgian calling from Cyprus, according to European Commission data. Setting the tariff caps, Viviane Reding, the E.U.'s then-telecom commissioner, said the idea that consumers should pay more when they are traveling in Europe than in their home country goes against the principles of the European single market. The E.U. has since forced similar roaming rate cuts for SMS text messaging and mobile Internet downloads, as well as requiring operators to reduce the chance of "bill shock" by cutting off data downloads abroad at a pre-agreed cost level. While the rate caps have increased roaming calls, the rates are still much higher than consumers typically pay in their home countries. Despite this, mobile operators across Europe complained they lost a significant revenue stream. The four companies took their case to the U.K. courts, challenging the U.K. law that was brought in to comply with the Europe-wide legislation. The U.K.'s High Court sought a ruling from the European Court of Justice on whether the roaming regulation was passed on the proper legal grounds. It also asked whether proportions of the roaming law imposing the same rates across Europe are excessive or violate national sovereignty. -By Mike Gordon, Dow Jones Newswires; +352 691 180 766; [email protected] (END) Dow Jones Newswires June 08, 2010 04:15 ET (08:15 GMT)