Vodafone and T Mobile have today pledged to slash the costs of using mobile phones abroad. The price war comes as the European Commission is planning to investigate roaming charges across all the networks.
Vodafone have promised to reduce roaming charges by up to 40% before April 2007. Although this is a significant reduction by the largest mobile operator it is understood the regulators will still investigate the issue and are likely to propose strong legislation.
T Mobile jumped ahead of the competition today by pre-empting Vodafone’s move and announcing a flat rate of 55p per minute to make and receive calls abroad. The new prices come into effect from 1st June in time for the summer holiday season.
Other mobile operators offer opt-in schemes and subscription services to access cheaper call rates but T Mobile are the first to make large discounts available to everyone.
T-Mobile UK managing director Jim Hyde said: “For a long time, we’ve said roaming rates are too high.
“We have not needed regulation to encourage us to cut roaming costs. True mobility means affordable mobility and, at present, too many mobile customers just don’t use their phones abroad. That makes no sense for customers and no sense for us.”
Vodafone has a monthly flat rate package called Passport, which excludes North America. Vodafone charges customers at their standard domestic rate when overseas, which makes calls cheaper than T-Mobile’s 55p flat rate, but there is an additional 75p connection fee payable for each call.
Orange announced last week a plan to reduce international call prices by offering a series of “bundles” of low-cost pre-pay minutes. While Orange believes these will cut bills by at least a quarter, to get the most out of them customers must use their full allowance.
The call charges levied by 3 and O2 are based on how a customer pays and which country they are calling from. An O2 customer calling the UK from France will be charged 85p a minute if they pay by contract or 99p to £1.50 on pre-pay. The same call on 3 is likely to cost 80p for contract customers and £1 on pre-pay.
The roaming market is worth an estimated £7 Billion per year and it’s clear the networks can’t keep charging the current rates without penalty from the regulators. One major issue that has not yet been addressed is the fact that all the networks charge users when they receive calls as well as when the make them.
