The price to text/call from mobile to 
mobile, across national borders, when both phones are on different networks, is by no means cheap. The EU has resolved to act to change this. The EU has stepped in to cap roaming charges. The average charge will fall by 60 per cent from 23 pence to 8.7 pence per minute. If only it were so simple to reduce the cost to the consumer.
What an effective and welcome measure you might say. We all like lower prices. But wait there is a catch. It seems that mobile operators still need to make a profit. It also seems that companies still need to pay their workers and invest in product development. In short, the mobile companies will need to make up the money lost from these cuts in call charges elsewhere. Consequently industry experts predict that this regulation’s main effect is actually to end the provision of free handsets to customers. Consumers will stay pay but in a different way.
The EU does not seem to recognise that they cannot legislate lower prices. Sustainable lower charges will only come about as the result of more competition in the mobile phone market and clear publication of the differential charges on offer. Consumers have already reacted to the high costs of international calls. They have begun to turn to Skype and Sms messaging to cut the cost of making calls and sending texts in response. The EU could simply require mobile phone companies to reveal the call cost per minute to the consumer prior to them agreeing to make it. Consumers could then make an informed choice as to whether to call and for how long. Instead, the EU has decided to set the prices mobile phone companies can charge. This is both unnecessary and detrimental.
These measures are unnecessary because consumers are already revealing their preferences to companies in the choices they make. They are best placed to judge whether they prioritise having a free handset or lower international call charges. Everyday they judge which company offers the best call costs and choose appropriately. Each day many of them change between operators to companies which offer packages more suited to their needs. The weight of their combined decisions forces companies to provide extra value or charge lower prices. This is why it is unnecessary for the EU to regulate prices and I will now explain why the efforts to do so are detrimental.
Mandated cuts in charges do not cut the costs of operating mobile phone networks. Therefore mobile operators have to make up these losses elsewhere. Many are already suggesting charging for the provision of handsets for those on contracts. Companies could also reduce investment in their mobile phone network reducing service provision to Europeans in outlying areas. Such measures could also result in cuts in the dividends paid to shareholders. This at a time when the stock market is weak and companies do not need further burdens imposed on them. In short the EU is engaging in a populist measure which will yield few benefits to the consumer and imposes great costs on the companies concerned and their customers. The British Government and OFCOM the UK telecoms regulator both oppose this measure. They are right to do so.
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