European Competition Commissioner Neelie Kroes talks at a news conference on roaming charges at the European Commission headquarters in Brussels July 6, 2011.
Credits: REUTERS/Yves Herman
Neelie Kroes, vice-president of the European Commission, said Wednesday the new plan allows consumers to shop for separate roaming packages from providers other than their usual providers. Out-of-country plans will automatically kick in when a European crosses a state line, without having to insert a new SIM card.
"A mobile should be mobile," Kroes said in her prepared remarks to a crowd in Brussels.
"But many people currently switch off their phones, smartphones and other mobile devices when travelling to another EU country because the current prices for roaming calls, texts and data access are so high."
New competitive forces will take a while to kick in, so in the interim Kroes plans to lower retail price caps to 50 cents per megabyte of data, 24 cents per minute for a call made, 10 cents per minute for calls received and 10 cents for a text.
Last month, the OECD gave Canada the dubious distinction of being the most expensive mobile-data roaming country in the industrialized world.
It found Canadians pay an average of $24.61 for a single megabyte of data abroad, more than double the OECD average of $9.48. The Greeks pay just $4.17 and Icelanders pay $4.42.
Roaming fees are a priority in the EU because the interconnected marketplace means high rates act as a drag on cross-border economic activity, said Michael Geist, e-commerce chair at the University of Ottawa.
"From a Canadian perspective, we've been complacent for far too long about our uncompetitive wireless marketplace," he said.
New entrants have helped, but foreign ownership restrictions, onerous contracts and little consumer protection remain real barriers to competition, he said.
"A more aggressive strategy to foster greater wireless competition is needed."
Kroes said existing roaming data caps which limit downloads to 50 euros a month (unless consent is given by the user) are already helping to stop "bill shock" and will remain in place.
"This proposal tackles the root cause of the problem -- the lack of competition on roaming markets -- by giving customers more choice and by giving alternative operators easier access to the roaming market," she said.
"It would also immediately bring down prices for data roaming, where operators currently enjoy outrageous profit margins."