Operators with the lowest domestic rates and operators that are only marginally profitable could see their profits fall by as much as 20% the association said. The Association made the calculations in its formal submission to the commission.

In April, European Information and Communication Commissioner Viviane Reding announced plans to reduce roaming charges by up to 40%. The Association says its members are voluntarily cutting roaming tariffs and the tariff cutting will increase this year. Vodafone Group said last week that it will cut roaming charges by 40% by April 2007 and Deutsche Telekom T-Mobile announced a flat roaming rate for its U.K. customers.

The Association estimates that implementation of the commission's proposed reforms could result in operators offering outbound roaming services at as much as 19% below cost.

Operators estimate that they would need to increase domestic rates by over 7% on calling plans that allow roaming. Only the small minority of mobile users who make large volumes of roaming calls would benefit, at the expense of those who travel less frequently.

"The European commission's draconian proposals run the risk of limiting access to roaming and reversing the steady and significant declines in the price of domestic and international voice calls that have occurred over the past decade," Rob Conway, chief executive of the GSM Association said.

Source: Dow Jones - WDR/Intelecon Regulatory News