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  5. Special report: EU-wide SMS and internet usage price cuts edging closer

Special report: EU-wide SMS and internet usage price cuts edging closer

Price caps for using mobile phones to send text messages and surf the internet in the EU have come a step closer to reality after the European parliament voted overwhelmingly in favour of the proposals.

Under the moves, the price of transferring a megabyte of data will be pegged at a maximum of one Euro as of July this year. This will then be followed by further staggered price drops. By July 2010, the price will be capped at 80 cents and will fall to 50 cents a year later. This compares with the current limit of 1 Euro and 68 cents.

The enforced limit on charges comes after a number of high-profile stories hit the headlines which told how consumers had been hit with punitive charges for mobile web browsing overseas. The European Commission, which had lobbied for the changes, drew attention to a number of these instances. These included the case of a German consumer who was left facing a bill of 46,000 Euros after he downloaded a TV programme while he was in France.

Cuts to maximum SMS message and call charges were also endorsed by the European parliament. Once these become law, the price of sending a text message will fall to 9p, compared with some networks’ current fee of up to 41p. Meanwhile, call costs will be reduced less dramatically, from their current level of 0.45 cents per minute to 0.43 cents. However, additional incremental cuts are to be enforced in 2010 and 2011 to bring down costs further.

Fiona Hall, a Liberal Democrat MP, welcomed the regulations and claimed that government intervention to limit charges had been necessary only after mobile phone companies had resisted voluntary caps.

She told the Guardian: "The new regulation on data charges will put a stop to the nasty shocks that people have received when they return from holiday, open their bills and see they have been charged a small fortune for simply checking the football scores on their mobiles.

Despite the warm welcome thus far given to the changes, a number of consumer groups are unlikely to be wholly satisfied by the EU’s actions, however. This is because although price caps are now in place, the lack of a usage limit could still mean that people may unwittingly rack up huge bills.

This is especially worrying given UK consumers’ increasing reliance on mobile broadband on their handsets. The trend has been driven by the appearance of high-end 3G enabled mobile phones such as the Apple iPhone and the T-Mobile G1, whose owners regularly download applications and software.

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