(Associated Press via NewsEdge) Phone firms claimed that an EU plan to end fees for receiving a call on a mobile phone abroad was a 'regulatory straitjacket' that could force them to offer services at a loss.
Saying mobile phone operators had failed to heed repeated warnings to cut the 'unjustified' high costs, the European Commission will next month come out with a draft law that will stop firms from charging customers for receiving a call when abroad and set an EU-wide price cap for making calls outside their home country.
The maximum price limit for roaming includes a 30% profit margin and replaces EU plans to see travelers who make calls when they are abroad pay the same price they would face at home.
But the GSM Association, which represents most of the world's mobile phone companies, said the forced abolition of the 'receiving party pays' standard would cause some operators to stop offering roaming to all customers.
'They would otherwise make a loss,' it said. 'There is no justification for any operator to be forced by regulation to provide services below cost.'
Phone companies make about 10 billion euros ($12 billion) a year from roaming charges in the EU, according to Commission figures.
They say roaming fees form part of a complex pricing model that allows them offer cheaper rates for other services and subsidize the high cost of phones.
However, the EU threat has already scared them into curbing roaming charges.
c 2006 The Associated Press
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