When the European Parliament voted on May 10 to place new caps on roaming charges, they included data services for the first time.
Telefonica was the first major carrier to respond. The very next day, the Spanish-owned carrier, known as O2 and Movistar to many European mobile users, announced its first standard pan-European data roaming tariff. Under the new plan, Telefonica’s smartphone customers can use 25 megabytes of high-speed Internet anywhere across the 27 European Union member states for $2.55 (€2) per day.
“You no longer need to switch off your smartphones when travelling within the EU, and neither do you need to worry about bill shock when you get home,” said José María Álvarez-Pallete, chairman and CEO of Telefónica Europe.
Telefonica’s plan is already in effect in Germany and will be available this summer to customers in Spain, United Kingdom, Ireland, Czech Republic and Slovakia.
Telefonica said its new tariff is well below the caps announced by the European Union.
Taking effect on July 1, the new EU rules cap the cost of 1 MB of data at 89 cents (70 cents Euro) plus VAT (value added tax), which works out to $22.34 (€17.50) for 25 MB. Other caps include a maximum of 37 cents (29 cents Euro) per minute for making a call, 10 cents (8 cents Euro) per minute for receiving one 12 cents (9 cents Euro) to send a text message.
So far, other major European carriers including Vodafone, Orange and Three have not yet announced new roaming plans.
The new caps are just the latest in a series of moves the EU has made toward regulating roaming costs. The EU has been placing caps on calling and texting since 2007 with the latest restrictions including data as well.
The European commission also plans to deliver a permanent solution to the roaming issue by 2014, cutting prices further. Under that plan, downloading data will fall to 26 cents (20 cents Euro) per MB.
“By putting price caps on data we have created a roaming market for the smart phone generation,” said Neelie Kroes, VP of the European Commission in a statement. “More than that, we have ended the rip-offs familiar to anyone who has used a mobile phone while travelling abroad.”
Kroes also argued that the measures would ultimately increase competition creating a better guarantee of lower prices for consumers. By 2014, the new rules will allow consumers to switch providers when roaming if they find a better deal.
Bottom Line:
Telefonica’s move will put pressure on its rivals to follow suit. While the idea of lowering roaming charges could be daunting in the face of rising data traffic on networks, Telefonica’s move should force rivals to lower roaming tariffs in order to remain attractive, especially with high end smartphone users.
