EU Oks Cap On French Wholesale SMS Fees

BRUSSELS -(Dow Jones)- The European Commission has endorsed a request by the French authorities, who want to put a ceiling on wholesale fees for text messages sent between mobile telephone operators in that country, a spokesman said Thursday.

Under the approved deal, France's national telecom regulator will cap wholesale fees at France Telecom's Orange and Vivendi's SFR at EUR0.03 per incoming text message. Bouygues, a newcomer to the French mobile phone market, can charge no more than EUR0.035 per incoming text message, EU telecoms spokesman Martin Selmayr told Dow Jones Newswires.

The commission expects the French authorities to introduce the price caps "in the weeks to come," the spokesman added.

French telecoms regulator ARCEP is the first national regulator to try to rein in Short Message Service fees.

With the European taste for sending and receiving SMS messages booming, mobile operators are raking in a large part of their profits from this product. But so far, regulators have been careful not to load too many rules onto this market.

"The commission believes SMS has become a mature market. There is a strong case that from next year onwards (capping wholesale fees) will become a more routine excercise," Selmayr said.

The French regulator's request was for permission to cap fees that an operator can charge for ensuring the safe arrival of a text message sent from a phone managed by a different operator.

Orange and SFR have been charging an average of about EUR0.053 for this service, but sometimes fees have been as high as EUR0.15, the French regulator found.

French mobile phone operators aren't expected to put up a fight against a nascent trend to regulate this element of their industry.

A spokesman for France Telecom insisted Orange offers "attractive SMS rates" in France.

Europe's GSM Association, which represents the interests of the mobile phone industry, wasn't available for comment.

-By Juliane von Reppert-Bismarck, Dow Jones Newswires; +32-2-741-1487; juliane.vonreppert@dowjones.com

(Nina Sovich in Paris contributed to this report.)

(END) Dow Jones Newswires"

Posted to the site on 20th July 2006