The European Union will cut the price mobile carriers such as Vodafone Group Plc (VOD) and France Telecom SA (FTE) can charge customers for checking e-mail and watching videos while traveling by 36 percent next week.
European mobile-phone companies can charge customers visiting other EU countries no more than 45 euro cents ($0.59) per megabyte plus tax starting on July 1, the European Commission said in a statement today. The existing limit of 70 cents was set a year ago. From July 2014, the maximum charge for data will be 20 cents.
The cuts are part of European Commission vice president Neelie Kroes’s agenda to make the market for European telecommunications companies more unified. Carriers have complained that her initiatives, while consumer-friendly, are too restrictive to phone companies and crimp investment in networks and technology. The commission said the EU has cut retail prices by 80 percent since 2007.
“The latest price cuts put more money in your pocket for summer, and are a critical step towards getting rid of these premiums once and for all,” Kroes said in the statement. “This is good for both consumers and companies, because it takes fear out of the market, and it grows the market.”
Outgoing calls will cost as much as 24 cents a minute, plus tax, which is a 17 percent cut from last year, while subscribers will be charged no more than 7 cents a minute, 13 percent less, for incoming calls, according to the statement. In July 2014, the cuts will continue, dropping to 19 cents a minute for outgoing calls, 5 cents for incoming calls and text message rates will drop to 6 cents each from 8 cents.
Kroes outlined the plan in a speech in Brussels on May 30 calling for a “single market” for telecommunications in Europe. Chief executive officers including Telecom Italia SpA (TIT)’s Franco Bernabe, Telefonica’s Cesar Alierta and Royal KPN NV’s Eelco Blok asked the EU to ease restrictions on pricing to help the carriers increase revenue and fund investments in their networks in a June 14 letter addressed to EU heads of state and Commission President Jose Barroso.
European wireless carriers get less than half of the amount their U.S. counterparts are able to charge every month, according to a May report from the GSMA industry group. The average European customer spent $38 per month last year on mobile subscriptions, compared to $69 in the U.S. Wireless phone bills in Europe have shrunk since 2000, while U.S. carriers were able to reverse the trend in 2010.
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