The European Commission is close to resolving its long-standing concerns about mobile phone operators overcharging people for using their phones abroad.
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Mobile phone users pay anything between €0.10 and €1 a minute to make phone calls in countries other than their own. They have no choice of which local mobile phone operator handles these calls nor any way of knowing how much their own operator is charged for making the connection.
The commission has been investigating these so-called roaming charges since 2000 in the UK and Germany, where the charges are believed to be the highest. The probes focus on the four operators in each country: Vodafone Group, O2, T-Mobile and Orange in the UK, and Vodafone, T-Mobile, O2 and Dutch mobile operator KPN Mobile in Germany.
Last December, two alliances of mobile operators, including nearly all the companies under investigation, notified the commission of their plans to team up to offer their private and business subscribers a cheaper way to use their phones abroad.
One alliance is made up of Germany's T-Mobile, Spain's Telefónica Móviles, Italy's Telecom Italia and France's Orange. The other is composed of O2 of the UK, Italy's Wind, Spain's Amena, Norway's Telenor, Hungary's Pannon and Switzerland's Sunrise.
The commission official, who asked not to be named, said these alliances aim to compete with British mobile operator Vodafone's Eurocall service, which offers subscribers the chance to programme their mobile phone to seek a connection abroad from one of Vodafone's own European divisions, at a reduced price.
The alliances have told the commission that their subscribers will be able to direct their phones to search for the network of another alliance member when they are abroad so that the subscriber can benefit from a prearranged, reduced rate.
Vodafone is unique in having its own subsidiaries across most of Europe. The two alliances aim to provide the subscribers of all participating mobile phone operators a similar service.
Commission competition regulators will examine the alliances alongside their antitrust probes of the British and German markets, the official said. "These alliances may provide the answer to inflated roaming prices in the European Union."
Formal charges against the British mobile phone companies will be filed in the coming months, and the companies may be fined for having overcharged until now, the official said, but he added that the fine would be modest if it turns out that the overcharging has ended.
Vodafone introduced its Eurocall service in 2001. The official said the company faces fines for overcharging before launching the service, adding that the regulators will also examine the changes in roaming charges since Eurocall was launched.
Charges against operators in the German market may follow later, the official said, but the official declined to give a time frame.
Consumer groups gave a guarded welcome to the developments in the mobile phone market. Dominique Forest, an economic advisor at BEUC, a Brussels-based European consumer association, said that any initiative from the industry to do away with exorbitant roaming charges must provide complete price transparency to consumers.
"Right now it's impossible to know how much you are paying," Forest added.
Consumers who live near national borders are often charged for roaming even when they are close to home. "Any solution must put an end to charging for this type of involuntary roaming," Forest said.
Paul Meller writes for IDG News Service