Extortionate Telecom Prices Over

The lush years of European telecoms companies are soon to be a thing of the past. But, finally the consumer will benefit from greater harmonization as the European Commission is set on banning roaming charges that all Europeans have to put up with when travelling to foreign countries within the European Union. As from July 1st 2014 roaming charges for calls within the EU will be limited to just 0.19 euros per minute and if those calls are cross-border ones, then they will be fixed at no more than a domestic long-distance call.

Calls at the present time range from 0.35 to 1.19 euros per minute and have been a lucrative means of raking in cash from subscribers to telephone companies in the EU when people travel or call another country within the EU. The proposal has yet to be passed by the European Parliament but it looks very much set on becoming the future of telecoms companies in the EU, both to their dismay and to the pleasure of the subscribers.

The idea is that telephone companies will have to harmonize across the EU in the very near future with such measures. It will also open up competition and provide new markets for telecoms companies. However, profits for telecoms companies in the EU will most certainly suffer a blow when the legislation comes into effect. Just how they plan to recoup on those losses will be another matter since they may just increase mobile-phone contracts to subscribers.

EU Telecoms Laws to Change

EU Telecoms Laws to Change

However, given the present state of the market there are already too many telephone companies in the EU, with each country having at least four or five at their disposal to choose from. Each of them has different regulations regarding pricing policies when travelling abroad and roaming costs. A single market certainly may exist in theory in the EU, but there is little harmonization of the telecoms industry still today. But, that too may take money from strapped-cash governments, say some critics. Although, the example of Vodafone in the UK and the fact that they pay no corporation tax, can hardly be used as an argument by some that governments will lose out. Unless, of course, we consider losing out on something that is nothing is still tantamount to losing out.

As things stand at the moment if an EU telecoms company wants to move into another market within the EU they have to abide by new regulations of that country as each government has the right to fix regulations individually for the domestic market. The new legislation will allow harmonization and therefore greater competition. However, there are only a certain number of subscribers to go around and however many companies there are in a country, there will ultimately be casualties and telecoms providers that will disappear in the future.

Neelie Kroes, the Vice President of the European Commission spoke of ‘sour and sweet’ for everyone. Everyone will get a benefit and something will be lost. It all sounds like just a bit of expensive administration in the European Union that will cost a bomb to implement and just end up shuffling one paper from this pile to that pile over there. The outcome will be the same overall with some collateral damage along the way for some telecoms companies.

At least the telecoms subscribers will come out of it with something positive for once and not just the companies that rake in their cash charging extortionate roaming charges which should have been gotten rid of long ago.

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tothetick

Professional team of writers/analysts analyzing the financial markets.

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