Mobile roaming in Europe

The European Commission, so often pilloried for imposing abstruse regulations on unwilling member states, can occasionally be the champion of Joe Public.

Last year, officials in Brussels found a new way to the hearts of Europe's consumers: through their mobile phone bills. Its scrutiny of mobile phone 'roaming charges' struck an unexpected chord with consumers disgruntled with calls that quadrupled in cost as soon as a national border was crossed.  

Its Roaming Regulation, which saw the light of day this summer, imposed ceilings on the amount mobile operators can charge for overseas calls. After winning this battle in the face of shrill opposition from mobile phone corporations, Telecoms Commissioner Viviane Reding set herself a sterner test: she announced plans on November 13 for an overhaul of the sector's rules.

Functional separation

Reding proposes a new entity -- the European Telecoms Market Authority -- to tie together the actions of national regulators, and decide on policy through majority votes.

• The body would have powers to push for 'functional separation' -- a form of market remedy that is sending shivers down the spines of telecom chiefs -- where it feels that competition is too scanty.
• The policy will target the network of copper cables that connect homes and businesses to telecoms exchanges, from whence their voice and data calls are passed on to the rest of the world.

UK testing ground

Commissioner Reding's favoured medicine has proved a success in the one European country that has swallowed it. BT, the former UK telecoms monopoly, has hived off its network maintenance business into an autonomous division, which remains part of the overall group but is highly insulated from it.

BT's new subsidiary Openreach looks after this network, renting it on precisely equal terms to BT's retail division and to voice and data competitors like Carphone Warhouse and AOL. To ensure impartiality, Openreach works from a different HQ, sets its pay packets independently, and undertakes to prevent sensitive information from seeping to the other divisions. Since making the change in January 2006, BT's share price has thrived and UK broadband access has forged ahead.

Kicking and screaming

Some progress has been made: Reding claims that voice roaming charges have been reduced by more than 60% on average since the implementation of regulation.

Brussels' plans to split up many of Europe's biggest utilities have foundered against the stiff resistance of the firms themselves and their allies in national capitals. The same tooth-and-nail fight can be expected in telecoms. France Telecom has said that the plans would curb innovation and investment, while the European Telecom Network Operators Association called it a "terrible idea."

Now attentions will turn to the challenge of regulating roaming data services such as SMS or MMS. But removing the stigma attached to using one's mobile phone abroad may take considerably longer.