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The EU was entitled to cap roaming rates in 2007 as network operators pocketed huge profits but resisted less drastic ways to cut the sky-high costs of using mobile phones in Europe, the EU advocate general said Thursday.
The opinion by Advocate General Miguel Poiares Maduro now goes to the European Court of Justice, which often follows that advice.
The opinion is a setback for mobile phone operators Vodafone (NYSE: VOD), Telefonica O2, T-Mobile and Orange. They had challenged the validity of the EU roaming law in a British court, which referred the case to the European court.
However, it is boost for the European Commission, which cites the roaming law as an example of how the European Union works to help consumers from the Azores to Lapland.
Hefty Profits
Poiares Maduro said the EU was entitled to set maximum roaming rates for a three-year period to ensure uniform prices and conditions across the 27 EU nations.
He noted that if pricing been left to the bloc's 27 national regulators it would have taken a very long time for Europeans to see roaming rates decline.
Poiares Maduro said the European Commission failed repeatedly to get network operators to lower their rates, which varied widely and earned them profits of up to 400 percent.
That and the need for timely action made regulating prices reasonable, the EU advocate general said. He urged the EU high court to uphold the validity of the roaming rates law.
Roaming Robbery?
The EU sets prices for the agriculture and fisheries industries, but very rarely has for other sectors. Besides regulating roaming rates, it has curbed fees for cross-border bank transfers.
Before the roaming law took effect, the EU urged travelers to switch off their mobile phones while abroad because of "excessively high" prices for mobile phone calls from one EU nation to another.
A four-minute call from Cyprus to Belgium used to cost more than 12 euros (US$17.40). The roaming law has set a maximum price of less than half a euro ($.75) per minute for making a mobile phone call when abroad, and just under a quarter of euro ($.36) for receiving one, plus value-added tax.
© 2009 Associated Press. All rights reserved.
© 2009 ECT News Network. All rights reserved.
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