Channel 4 broadcast a hard-hitting report on Monday by its Dispatches investigative reporting team on the UK mobile phone business.
Allegations of sharp practices by mobile phone retailers (an outfit called Phones4U came under especially severe criticism), denial of responsibility by mobile operators when things go wrong with changing contracts, and government collusion to keep voice and text call rates artificially high were at the heart of “The Mobile Phone Rip-Off” report.
It’s that last point that struck me especially. An interview in the programme with European Commissioner for Information Society and Media, Viviane Reding, produced very clear criticism of the British government – and specifically Minister for Culture, Creative Industries and Tourism, Margaret Hodge – regarding lowering the costs of using a mobile phone in Europe for voice and text as set by the various mobile operators:
[…] In December 2006 Hodge vetoed a measure proposed by Reding aimed at putting a limit to roaming charges. At that time it cost 94p per minute to make an international call, estimated to be 400 per cent more than the cost to the operators.
“The Minister (Hodge) is playing, 100 per cent, the spokesman for the mobile phone industry,” said Reding.
“The prices were extraordinarily high 10 times, 15 times, 20 times higher than local national prices”, said Reding, “but there was no difference in the cost of connecting the calls. I saw also the cost for the operators was roughly 10 cents for a call and what they were charging was 400 per cent more than the cost.”
Brussels proposed 27p per minute for making an international call and 10p for receiving one. After lobbying from the wireless companies this was upped to 38p and 17p.
“The British government was very clearly doing a policy in favour of the telephone industry”, said Reding.
A 400 percent markup on voice and text calls. Now that’s a nice little earner.
I wonder what success Ms Reding will have about lowering data charges in Europe.
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