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EU Sets July Deadline for Data Roaming Cuts

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BARCELONA (Dow Jones) European mobile phone operators must cut how much they charge customers for sending texts or downloading data while traveling abroad by July 1 or incur regulation, the European Union's telecommunications commissioner warned Monday.

The announcement drew mixed reactions from Europe's mobile phone operators.

European Commissioner Viviane Reding said that operators must slash the cost of sending text messages within the European Union's 27 states to prices similar to local rates, and also agree to lower wholesale prices when it comes to charging each other for customers roaming onto rival mobile data networks abroad.

"Sending a text message or downloading data in another country should not be substantially more expensive within another country than when at home," she told reporters at the Mobile World Congress in Barcelona.

"Higher roaming charges abroad must be justified by additional costs of operators. Otherwise, they will have to disappear," she said.

If the European mobile phone fraternity doesn't respond by bringing in "credible, but doable" savings for customers by July 1, they could risk having price cuts enforced upon them by European governments, Reding said.

"There should also be transparency, where consumers are warned by appropriate mechanisms. They should not receive shock bills of several thousands of euros," she said.

"Any move to intervene in this market by regulators could stifle innovation and stunt the development of new data offerings for roaming," said Tom Phillips, chief government and regulatory affairs officer at the GSM Association, a trade body representing most of Europe's mobile operators.

"We don't believe that regulation, particularly of retail prices, is an appropriate move in a competitive and fast-evolving market," said Phillips.

Vodafone Group spokesman Simon Gordon said the company was "taking stock of today's comments" and would continue dialogue with the European Union. Telefonica O2 spokesman Simon Lloyd said the company had already led the way with retail price cuts and doesn't object to changes in wholesale fees.

"We would welcome wholesale price changes, but it isn't just us that has to cooperate on interconnection," said Lloyd.

Kevin Russell, chief executive of Hutchison Whampoa Ltd.-owned mobile operator 3 UK, called for wholesale prices to be cut by at least 70%.

"There are inconsistencies in the wholesale market with a few large operators holding on to high wholesale prices. These impact other operators' ability to reduce prices for customers roaming onto other networks and reduces their ability to offer competitive prices at the retail level," said Russell.

-By Daniel Thomas, Dow Jones Newswires; 44-20-7842-9264; dan.thomas@dowjones.com

(END) Dow Jones Newswires

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