EU Nears Verdict In Mobile Roaming Charges Case-Sources

BRUSSELS -(Dow Jones)- European regulators are nearing a decision on a possible fine in a long-running case investigating mobile phone operators for overcharing customers on roaming calls, two people close to the case said Thursday.

Vodafone, Deutsche Telekom's T-Mobile unit, and Telefonica's 02 division have been under investigation for more than five years.

"From what we can determine, the time looks right" for a decision in a few weeks' time said one person close to the case.

The telephone companies met several weeks ago with regulators to discuss the case, he said.

Back in 2001, regulators raided nine mobile phone companies in the UK and in Germany searching for evidence. The stated aim was to bring down roaming charges which at that time it suspected could be up to 500% above costs.

After the raids, however, officials say the investigations became bogged down and uncovering clear evidence of cartel behavior proved difficult. The investigators then changed tack, the people said.

The regulators then considered each operator a monopoly by itself because consumers had almost no choice when they roamed outside their home countries. Operators asking for connections, primarily in Germany, had to get coverage from all operators, who the regulators believe may have used their monopoly powers to charge them.

This approach, or legal theory, is innovative and untested, lawyers say, and they expect the companies to appeal any verdict which depends on it.

The battle over roaming fees is one of the most fierce in EU regulatory history. In addition to their antitrust investigation, the EU unveiled proposals earlier this year to force mobile-phone operators to cut charges customers pay while traveling elsewhere in Europe by up to 60%. The commission said the company were gouging consumers.

Analysts estimate European mobile operators make as much as 10% of total sales from roaming fees. The GSM association, representing more than 690 GSM mobile phone operators, has lobbied to get the regulation weakened. They argue that they have made significant voluntary cuts and that the E.U. regulation could hurt investment in the industry.

The EU parliament and 25 EU governments are considering the regulation.

-By William Echikson,Dow Jones Newswires;32-2-741-1480; william.echikson@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 5th October 2006