EU Officials Reach Compromise On Roaming Rules -Source

BRUSSELS -(Dow Jones)- Senior European Commission officials Monday reached a compromise on a controversial proposal to regulate mobile phone operators' roaming fees, a commission official familiar with the matter said.

Under the compromise, mobile phone companies will have a three-month grace period to implement the new rules after they come into force.

The grace period is designed to let mobile operators keep their current rates until after next summer, the official said. After that, the operators will have to cut their charges.

Summers are the most lucrative time of year for mobile operators, since many Europeans cross borders to reach vacation destinations, incurring higher mobile phone charges while they travel, according to the commission's top telecommunications regulator, Viviane Reding.

Reding wanted to have the new roaming rules in place by next summer, but faced fierce opposition from mobile phone companies and other EU regulators.

In Monday's meeting, senior officials working under the E.U.'s 25 commissioners - the regulators who oversee everything from phone calls to fishing - agreed to a slower timetable for cutting mobile roaming rates. The commission's president, Jose Manuel Barroso, brokered the deal, according to the commission official who knew about the meeting.

The 25 commissioners, who each represent an EU member state, will meet Wednesday to vote on the proposed rules. Several commissioners, including British trade chief Peter Mandelson, German industry commissioner Guenter Verheugen and the Irish commissioner who oversees the internal market, Charlie McCreevy, are against the plan.

The commissioners will debate Reding's compromise proposal Wednesday and could make further last-minute changes. But as things stand, the rules likely will have the backing of 20 out of the 25 commissioners, the official familiar with Monday's negotiations said.

The proposed rules only need majority support at the commission level to move on to a parliamentary review.

"The roaming regulation is on track for adoption Wednesday. There is a strong consensus at the commission," said Reding's spokesman Martin Selmayr.

E.U. lawmakers could pass the new regulation as soon as next spring, though fierce debate and mobile operators' lobbying efforts could delay that timetable, a lawyer familiar with the planned regulation said.

Operators are fuming about the forced price cuts. They say roaming charges reflect the real costs of building and running the infrastructure that supports cross-border phone calls.

Some operators have voluntarily cut their prices, hoping the commission will back down. T-Mobile, a unit of Deutsche Telekom; Orange, a unit of France Telecom; Telecom Italia; Telenor; TeliaSonera; and Wind - which together have almost 200 million mobile users across Europe - have agreed to cap the average wholesale rates they offer each other for providing roaming services at EUR0.45 a minute from October and EUR0.36 a minute from October 2007.

Current wholesale rates are closely guarded by the operators and vary between them. But analysts say that charges from wholesale rates can make up as much as 10% of an operator's revenue.

-By Adam Cohen, Dow Jones Newswires; +322 741 1486; adam.cohen@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 10th July 2006