BRUSSELS -(Dow Jones)- A proposed European Commission regulation on roaming mobile phone charges could cost operators EUR4.3 billion in lost sales and EUR2.3 billion profits, the GSM mobile phone operators' association said Monday.
Operators with the lowest domestic rates or operators which are only marginally profitable could see their profits fall by as much as 20%, the trade grouping said.
The associaton, which representing more than 690 GSM mobile phone operators across 213 countries, made the calculations in its formal submission to the commission.
European Information and Communication Commissioner Viviane Reding announced plans in April for a cut of up to 40% in the fees, which are added to calls dialed or received abroad.
The GSM Association says its members are voluntarily cutting roaming tariffs and this "downward trend" will "accelerate this year."
Vodafone Group said last week that it will cut roaming charges by 40% by April 2007 and Deutsche Telekom T-Mobile announced a 55 pence flat roaming rate for its U.K. customers.
The Association estimates that implementation of the commission's reform could see operators facing a situation where they are offering outbound roaming services at up to 19% below cost.
In response, operators said they would have to raise domestic prices by more than 7% on tariff plans that continue to allow roaming. Only the small minority of mobile users that make large volumes of roaming calls - primarily business travellers - would benefit, at the expense of those who travel less frequently, the association said.
"The European commission's draconian proposals run the risk of limiting access to roaming and reversing the steady and significant declines in the price of domestic and international voice calls that have occurred over the past decade," Rob Conway, chief executive of the GSM Association said.
"Roaming tariffs are falling rapidly. Competition, not regulation, is the way to deliver lower retail prices."
-By William Echikson, Dow Jones Newswires; 32-2-741-1480; william.echikson@dowjones.com
(END) Dow Jones Newswires "
Posted to the site on 15th May 2006
Posted to: www.cellular-news.com/story/17374.php