UPDATE 1-EU consults on whether to cap SMS, data tariffs

(Adds industry reaction)

By Huw Jones

BRUSSELS May 7 (Reuters) - How mobile phone operators bill customers and the possibility of caps on the cost of surfing the Web on a laptop abroad were included in a public consultation launched by the European Commission on Wednesday.

The European Union adopted Eurotariff price caps last year on the cost of using a mobile phone outside a home state in the 27-country bloc and is now examining if the "roaming" caps should be extended beyond June 2010 when they are due to expire.

The consultation exercise will seek to find out whether the EU rules have been effective, whether their term and scope should be extended, and what impact they have had on billing practices, domestic tariffs and smaller operators.

EU Telecoms Commissioner Viviane Reding has given operators until June to cut the cost of texting outside a home state and for using a mobile phone or laptop to surf the Web or download emails and files while on the move, known as data roaming.

Unless operators comply, Reding has said she will propose adding texts and data roaming to the scope of the current EU rules which only cover voice calls.

The consultation paper said the regulation has been effective so far but more may need to be done.

The cost of making a call home while roaming has dropped from an average of 1.10 euros per minute to not more than 0.49 euro cents per minute, the cap imposed by the EU rules.

"The fact that most operators appear to have set Eurotariffs at the maximum levels allowed under the regulation shows that there is not much competition below the levels of the cap," the consultation document said.

"A further issue to be considered is the impact of per-minute as opposed to per-second billing practices," it added.

The GSM Association said data roaming services were in their infancy and mobile operators were making big cuts in tariffs and cutting voice roaming to below the EU caps.

ETNO, which represents operators like Deutsche Telekom (DTEGn.DE) and France Telecom (FTE.PA) said it would oppose "threats" from Reding to meet the end of June deadline for cutting roamed data and SMS fees.

"The market has become very competitive. It's market pressure that is reducing these prices not threats from the European Commission," ETNO director Michael Bartholomew told reporters.

Alfredo Acebal, director of EU affairs at Spanish telecoms group Telefonica (TEF.MC), told reporters that putting pressure on telecoms firms to collectively cut tariffs places them in a price-fixing situation which is against EU antitrust rules. (Reporting by Huw Jones; Editing by Stephen Weeks)