Vodafone abolishes roaming charges ahead of mobile phone price war

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Vodafone made the first move in an expected price war between mobile phone companies by abolishing roaming charges for British customers travelling in Europe.

Under the terms of the three-month deal beginning on June 1, Vodafone’s customers will be able to call and text phones in Britain from 35 European countries for the price they would be charged in Britain.

It is thought that the price cuts could be the first of many from mobile operators as caps on roaming fees are due to come into force on July 1.

The European Commission has targeted the often hefty charges for calling from abroad, dubbed the “roaming rip-off” by Viviane Reding, the EU Telecoms Commissioner, with a two-year plan to cut charges by an average of 60 per cent. This was approved by MEPs in April.

Some mobile phone customers have unwittingly run up bills of hundreds of pounds when using their phones on holiday.

The European Commission plans include limits on the cost of mobile phone texting and downloads when abroad, cutting the price of a roaming text message for a British customer by more than half from an average of 25p to a maximum of 10p. The current cap of 41p per minute for a call made to Britain from another EU country will drop to 31p by July 2011.

Vodafone said that a mobile phone user on one of its plans with 600 inclusive minutes and unlimited texts would be able to use these on holiday without paying any extra charges under the new arrangement.

It also said that pay-as-you-go customers on its Simply tariff would be able to call overseas numbers from Britain from 5p per minute, although tariffs will be as much as 30p per minute for some countries. It added, however, that after its three-month offer expired customers would remain on the Passport scheme and pay 75p to be connected when calling from abroad, before being charged at their normal call rate.

Vodafone’s rival operator O2 said yesterday that it would cut the cost of sending a text message from a British phone in Europe from 25p to 11p in July. It will not try to match Vodafone’s summer offer, it said, but will offer customers free incoming calls while in Europe and calls within Europe at 25p a minute through its My Europe Extra package, which costs £10 a month.

Orange said that it would also cut the price of texts in July, but did not say by how much.

Mobile phone companies will have to work hard to replace the lost revenue from higher roaming charges at a difficult time for the industry, with cost-conscious consumers cutting the amount they spend on their phones.

Earlier this week O2 said that its average revenue per user fell by nearly 4 per cent because people were cutting back on the number of text messages they sent. Vodafone is trying to cut about £1 billion from its £22 billion operating costs to fight the recession. Roaming charges accounted for €6.5 billion (£5.8 billion) in revenue for mobile operators last year, about 2 per cent of the €300 billion European telecommunications market, according to the Commission.

Ian Shepherd, the consumer director for Vodafone UK, said of its deal: “You can sit on the beach with your phone switched on knowing you can take and make a call just as you would if you were in your back garden.”


Source:TimesOnline