EC raids mobile firms

July 11, 2001 Posted: 1641 GMT

LONDON (CNN) -- Nine mobile phone companies across Britain and Germany have been raided by the European Commission probing possible price fixing.

The European Commission said on Wednesday it was focusing on charges levied for 'roaming'.

The Commission said in a statement it was looking for evidence of "collective fixing of consumer retail prices by mobile operators in both countries" and "to verify whether German operators have illegally fixed the wholesale prices they charge," Reuters reported.

In the UK, a spokesman for Deutsche Telekom's (FDTE) British unit, One2One, said that officials from Britain's Office of Fair Trading and the Commission had entered its office on Wednesday morning.

BT Cellnet and Vodafone also confirmed that they had received visits.

In Germany, Deutsche Telekom said its corporate headquarters and its T-Mobile unit had both been searched.

E-Plus, owned by Dutch telecoms operator KPN, also said its offices had been searched.

Shares in mobile phone operators and related companies tumbled in the wake of the news.

The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was down 1.4 percent, with the telecom and information technology sectors the main decliners, both falling more than 3 percent.

Deutsche Telekom fell more than 2.5 percent in Frankfurt, while Britain's Vodafone (VOD) group was down 4.9 percent.

France Telecom (PFTE) fell nearly 2 percent on the CAC 40 index, with its subsidiary Orange (POGE) down 1.7 percent..

Nokia, the world's biggest mobile phone maker, was down 4.5 percent while rival Ericsson was off more than 2 percent.

Roaming is where a mobile phone network operator "piggybacks" onto another company's network while a mobile phone user is abroad, and the service is charged back to the customer on his or her own mobile phone bill.

But the prices can be 10 times higher in Europe than of those in the United States.

EU competition commissioner Mario Monti said in April that mobile roaming markets "show an almost complete absence of competition with high and rigid prices."

He said then that the charges in many cases could be ripe for Commission action.

Brussels began an investigation into competition in the sector in July 1999 and said it would report by the end of 2001.

In his April evidence to the industry committee of the European parliament, the commissioner attacked "high and rigid prices" at  around the one euro per minute figure.

He also indicated Brussels was far from happy with the existing arrangements to standardise charges.

"We have identified around 10 member states where significant problems appear to exist at retail and at wholesale level," he said.

Vodafone and 10 other European operators had applied form exemption for their roaming charges from the EU's anti-cartel regulations.

Vodafone said at the time it was giving mobile phone users a pan-European tariff which was to the benefit of customers as they knew exactly what they were being charged.

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