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O2 set for up to 130% hike in non-EU roaming charges

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O2 has announced a major increase in the cost of using its services outside of Europe for its 18 million UK customers, including a 130% rise in what it charges for receiving calls in the US and Canada.

During the summer, the European Commission imposed new protections against excessive charges for calls, texts and using mobile data in other European Union countries.

An o2 shop in London's Oxford Street

© PA Images / Sean Dempsey/PA Archive

Man with a mobile phone

© Rex Features / Image Broker



But while the EU market is now more tightly regulated, there are still no controls on roaming charges in the Rest of the World, prompting one expert to brand it a "wild west' for operators.

In a statement on its website, O2 said that from November 28 it will increase its charges for making calls in the US and Canada from 90p a minute to £1.10.

The charge for receiving calls in those countries will rise from 39p to 90p a minute, an increase of around 130% on the current charge of 39p.

Any O2 customers travelling to the US and Canada will have to pay 40p for a text, an increase of 60% of the current levels of 25p.

Using data anywhere outside of Europe on O2 will remain at the very expensive rate of £6 for 1MB, compared to just 69p within Europe.

Making and receiving calls in the Asia Pacific region will actually be cheaper than the US and Canada, at 80p per minute for both. But that is up from the current rates of 60p and 43p respectively.

In the Rest of the World, it will cost O2 customers £1.50 to make a call and £1.25 to receive one, up from £1.20 and 85p respectively.

Texts in the Asia Pacific and Rest of the World regions will also cost 40p.

In July 2012, the European Commission forced mobile operators to cut the costs of making a call in another EU country to 28p per minute. The cost of receiving a call fell to 7p a minute and texts dropped to 8p each.

O2 has been accused of attempting to offset the price cut in the EU by ramping up its international charges.

However, a spokesman for the firm said that the roaming charges were still competitive against rival operators.

"This is the first time we have changed these prices in over five years and we've ensured they remain competitive," he said.

O2 logo
But Tomas Mendoza, the managing director of Tep Wireless, said that O2 is increasing the charges "simply because it can".

"The roaming market is now regulated within European mobile operators - but there is no cross-continental regulation or body with jurisdiction. It's the 'wild west' where phone operators can charge what they want," he said.

"Operators nowadays are struggling with the 'triple whammy' of falling SMS and voice traffic, and the EU roaming regulation.

"However, roaming outside of the EU is clearly a source of growth. However, we at Tep believe operators should drive prices lower to encourage the public to stay online when overseas - currently only 6% of travellers remain connected to mobile networks while abroad."

Mendoza said that the "biggest rip-off" today is the cost of using the internet on a mobile device while travelling outside of Europe.

He said that operators are focusing on data rather than calls and texts to make money, as the average smartphone user spends 80% of their time on internet related activities.

According to Mendoza, the cost of 1MB of data on roaming (involving a carrier using another firm's network to connect its customers) is anywhere between 25p and £2.50 outside the European Union.

This means that at the cheapest buying price O2 is making a 2,400% profit margin on every MB used by its customers.

"1MB is just enough for sending between five and seven emails - to upload a picture you'll probably need between two and three MB," he said.

"Based on the average smartphone daily usage of 30MB - a number that's constantly increasing - the cost while overseas with O2 would be £180 per day. The average cost for a laptop user will be £1,200 per day and tablet will be £600 per day (100MB/day)."

UPDATE: O2 has countered Mendoza's claims, stating that its data shows O2 smartphone users actually consume an average of 11MB of data a day, rather than 30MB.

The firm also said that it caps the amount of data customers use while abroad at £40 per day, and they can use up to 50MB for that cost.

A spokesperson for the firm also countered Mendoza's claims about how much it costs O2 to buy data outside the European Union.

In terms of the non-EU price rise, he added: "This is the first time we have changed our prices in over five years and data costs have not changed.

"We've made the changes to simplify charging and to align ourselves with the competition and yet still remain competitive."

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