Vodafone lashes out as EU votes to cut roaming charges

European Union

Updated: For the last few years European regulators have been pushing mobile companies to slash the roaming charges they slap on customers who cross the continent’s borders. Although operators have grumbled and griped about lost profits, for the most part they have taken the hits. Apparently, though, the gloves are now off.

At a press briefing held at Mobile World Congress in Barcelona, Vodafone boss Vittoria Colao said that it was time for the cuts to stop. According to The Guardian, Colao told reporters that the more the regulation stops mobile companies charging users what they like, the less investment mobile companies will make in their networks.

“Does Europe need employment, or does Europe need rate cuts?” he asked. “We should stop having this continuous intervention on prices and let the industry reinvest the money.”

He then went on to describe what he saw as “hell”: a worst-case scenario in which profits fall, reinvestment is impossible, development ceases, jobs are cut, and a whole range of related industries — media, software, entertainment.

Hyperbole?

The prospect that terrified Colao so much was the upcoming vote by European parliamentarians over roaming charges, who wanted to cap the amount customers paid in order to prevent them being unfairly levied in what is, after all, meant to be a single market.

And it has come to pass. Just hours after Vodafone’s fit of pique, the vote went ahead and the agreement was made: now a proposals has been outlined suggesting that by July 2014, operators will not be able to charge roaming customers any more than €0.15 a minute for calls, €0.04 to text, or (perhaps most importantly) €0.20 a megabyte for data. It could soon be the law.

So will we see the “hell” Colao envisions?

That’s not going to be obvious for a while. But there are plenty of arguments to suggest that his anger is more than a little hypocritical. The biggest? That cutting roaming charges isn’t going to kill anyone. After all, Vodafone made nearly $12 billion in profit over the last six months.

Then there’s the fact that not every operator has the same issue with the proposals as Colao. Although Telefonica similarly argued that it would be counter-productive to cut roaming rates, British network 3 responded positively to the vote.

“The committee’s proposed data caps will pave the way for greater  competition and lower consumer prices,” said the business’s deputy chairman Christian Salbaing. “This proposal is a great result for smartphone and mobile data users across Europe.”

But perhaps the real trend to watch here is the pushback against regulators. After years of rolling over, corporates are now stinging — and making direct, targeted, public attacks. This could be the spark that sets a fire.

Update: Neelie Kroes, the European Commission’s vice president who has championed many of the regulations around mobile issues, has fired back at Colao on Twitter — saying she doesn’t believe it.

It’s also worth pointing out that some had been lobbying for roaming charges to be scrapped entirely, or made dramatically lower than those which made it through the committee. The ultimate vote, which would make the cuts law, is due to take place in April.

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