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EU to limit mobile roaming charges
 EU regulations could cut mobile costs for people traveling to other parts of Europe. YOUR E-MAIL ALERTS(CNN) -- The European Commission is set to limit the amount consumers can be charged for using mobile phones outside their home countries. EU Information Society and Media Commissioner Viviane Reding on Tuesday proposed a regulation that would cut international roaming cost imposed by mobile operators. "It's unacceptable that consumers are punished on their telephone bill simply for crossing a border," Reding told reporters in Brussels. "This regulation I intend to propose will end international roaming charges as we know them today." The change would mean calls made aboard -- which can vary from as little as 20 euro cents (24 US cents) for a four-minute call to more than 13 euros cents -- would cost the same as if they were made back home. "The cost of using your mobile phone abroad is hard to believe," Reding said. Reding hopes the plan will be formally adopted by the European Commission in June and come into effect in the summer of 2007. The legislation must also be approved member states and the European Parliament. "The ludicrous cost of receiving calls or calling from a mobile phone abroad has been burning a hole in consumers' pockets for far too long," said Liberal Democrat MEP Sharon Bowles. "This regulation will ensure that operators cannot charge and international roaming charge that is higher than that imposed nationally," the UK's Press Association quoted her as saying. The move follows a probe by the Commission into roaming charges in December 2004. It later accused Deutsche Telekom's T-Mobile unit and British-based Vodafone with overcharging consumers using mobile phones when visiting Germany. New rule could hurt earningsSome mobile phone operators claim they have already acted to keep down roaming costs. Vodafone, Europe's biggest mobile phone operator, says its charges fell 30 percent in the last year for customers using its Passport roaming scheme. "The normal reason why you regulate is that markets are failing in some way," Richard Feasey, Vodafone's director for public policy, told Reuters. "They will need to explain, given that national regulators have looked at this market and not found any market failure, why the Commission comes to a different view." In an earlier submission to the Commission, Vodafone said: "Although it might appear to be an attractive and politically popular objective, there is no reason why retail prices for roaming and those for domestic mobile calls should be expected to 'converge' or be exactly the same." T-Mobile spokesman Christian Schwolow says market forces are more effective than regulation in lower charges. "We think sinking prices will eventually lead to higher use and that is certainly good for all," Schwolow told The Associated Press. "We are convinced that the competition itself is bringing the prices down." Mobile operators also argue that charges for international use must be higher than domestic calls because of the additional costs involved in delivering service through foreign networks. But MEP Bowles said it is "a myth that the cost of processing this (international charges) is more, and it is outrageous that mobile operators have got away with it for so long." Roaming charges are also a big source of revenue for mobile operators and analysts caution that the move could cut into earnings of the phone companies. "An outright scrapping of international roaming surcharges for intra-EU roaming would cause a loss of up to 7-9 percent of European mobile operator revenues, and about 15 percent of earnings overnight, well beyond the downside currently already factored in," Reuters quoted an analyst at Swiss bank Credit Suisse as saying. Another analyst, John Davies at Dresdner Kleinwort Wasserstein, said roaming income accounted for 8 percent to 15 percent of operators' revenues and typically carried higher margins, with inbound roaming margins typically higher than outbound roaming margins. 
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