Starting as early as next month, the country's major mobile operators will begin reducing prices for making and receiving mobile phone calls abroad, known as roaming fees.

Eurotel, T-Mobile and Vodafone ČR have all announced that they will follow in the footsteps of their international parent companies by slashing roaming fees, which can be as much as 10 times higher than in-country calling rates, as requested by the European Commission (EC).

Vodafone was the first to make the move, saying May 8 it would cut roaming prices by 40 percent within a year. Telefónica of Spain, which owns Czech fixed-line operator Český Telecom and its mobile arm, Eurotel, subsequently said it would introduce lower rates this summer.

Pavel Kaidl, spokesman for Eurotel, said the company will begin offering Telefónica's new "My Europe" roaming plan in June, but would not comment on its details.

However, Peter Erskine, CEO of Telefónica 02, the company's UK arm, has said the plan will offer clients the same in-country rates across Europe, so they won't be charged more when making calls abroad.

"Also," Erskine added, "the charge levied by all operators in the past for receiving calls when abroad will be scrapped."

EU pressure

Though Czech mobile operators have in the past taken the initiative to offer clients packages with price discounts, especially after number portability was introduced earlier this year, the push to lower roaming rates is being driven by the European Union.

The EU wants to reduce rates throughout Europe, and in late March Viviane Reding, information society and media commissioner for the EC, unveiled a plan to eliminate what she referred to as "unjustified roaming prices."

"It's high time the EU's internal market delivered substantially lower communication charges for consumers and business people traveling abroad," she said. "There is no reason that a Czech pays almost 7 euros [$9/730 Kč] when making a regular four-minute phone call home from Italy and that he or she is charged a fee for answering calls abroad."

According to the EC, a four-minute call from the United Kingdom costs Czechs as much as 228 Kč. Making the same call in Austria or Germany could reach 150 Kč. These figures put the Czech Republic in the middle of the EU roaming-fee ranking.

Reding's plan, preliminarily approved by the EC May 12, would impose a "home pricing" scheme throughout Europe. In other words, even when roaming, callers would be charged whatever they would normally pay in their home countries. Charges for incoming calls would be abolished.

This plan, or some variant of it, could come into effect as early as the second half of 2007 if approved by the European Parliament and national governments.

Opportunity knocking

The three major Czech mobile operators have been reducing roaming prices this year and taking steps to make pricing lists more transparent, but they are nevertheless unenthusiastic about the EC's plan.

"Flat regulation is not the best solution," Eurotel's Kaidl said.

And Jiří Hájek, spokesman for T-Mobile, said roaming prices don't need to be regulated because there's enough competition on the market.

But reducing fees might actually be an opportunity for telecom operators, according to analysts.

Fees from international roaming represent about 5 to 6 percent of Czech operators' revenue, said Tibor Bokor of Wood&Co. He pointed out, however, that most of this revenue comes from foreigners, who tend to use mobile phones much more than Czechs.

"The Czechs are more price-sensitive, and they avoid making or receiving phone calls when abroad," he said.

As a result, lowering roaming fees could prompt Czechs to start making more international phone calls, boosting revenues.

There's even another potential upside for telecoms.

If the flat reduction of rates is introduced in Europe, callers will have the opportunity to sign up with operators in foreign countries to take advantage of lower prices.