The mobile phone industry can protest all it likes about the European commission introducing regulation to try to reduce the cost of using a mobile abroad, but the commission is going to press on regardless - that was the message Credit Suisse said it had received from Brussels on Friday. The news contributed to a 1.75p decline in Vodafone yesterday. Shares in the company, which some in the industry reckon earns £500m a year from roaming traffic, closed at 125p.
In a note on Vodafone, Credit Suisse said it met representatives of InfoComm, the EU body responsible for European telecoms regulation, who said the commissioner, Viviane Reding, still intended to push for legislation despite moves by the mobile phone firms to put their own house in order. The past few weeks have seen reductions in roaming charges from O2, Vodafone, 3, T-Mobile and Orange, which led some rivals to fear that the move could be seen as price collusion. The mobile phone industry is lobbying hard in Brussels to prevent Ms Reding introducing a law that would ban roaming charges altogether.
The final draft of the roaming law will appear in the middle of next month, according to Credit Suisse. It will call for wholesale rates to be reduced and place a price cap on retail rates rather than opt for the "home tariff" that Ms Reding had originally suggested.
Credit Suisse had been forecasting a cut in roaming tariffs of 20% to 25% over the next three years.
Overall, the FTSE 100 index closed down 2.5 points yesterday at 5762.1 with traders looking in vain for a sense of direction for the market. The index of leading shares opened lower and pulled itself back into positive territory around lunchtime. But the rally never looked as though it had any serious enthusiasm behind it; trading volumes were low.
Wall Street's subdued opening also did little to give dealers in the square mile a sense of longer-term direction.
BAA was the day's best performing stock, up 23p at 928p, as the airports operator admitted it was in talks with Spain's Ferrovial as well as another bidder - a consortium led by Goldman Sachs - about a possible takeover.
The rising oil price, which topped $73 a barrel, proved something of a double-edged sword. While the price increase pushed shares in Royal Dutch Shell higher (its A shares closed at £17.71, up 16p, and B shares were £18.45, up 21p) and BP was up 2.5p at 636p, British Airways dipped 7.25p to 340.5p on fears that rising fuel costs would hit earnings.
Metals prices also held up, helping BHP Billiton add 14p to £10.39, while Lehman Brothers' decision to start coverage of Xstrata with an "overweight" stance pushed shares in the company up 8p to £20.58.
Shares in PartyGaming were down 4.75p to 122.5p, on continuing fears that two of the online gambling firm's founders were about to sell 500m shares, or more than 12% of the firm. Vikrant Bhargava and Anurag Dikshit, who left the board last month, hold 30.4% and 8.6% of the firm respectively.
Merrill Lynch's support helped Diageo gain 9p to reach 898.5p. The broker has raised its recommendation on the drinks group to buy from neutral with a share-price target of £10.50.
The FTSE 250 meanwhile closed down 95.8 points, to 9,351.9, and the small cap index was up 2.1 points at 3,438.3.
Shares in iSoft continued to fall - down 3.25p at 86.25p - on fears that the healthcare software company was about to lose its place on the lucrative revamp of NHS computer systems.
But shares in Carphone Warehouse added 4.25p to 331.5p ahead of today's annual results. The focus of many in the Square Mile will be on the success to date of the company's free broadband offer from its TalkTalk residential telephony business. Launched just over a month ago, TalkTalk's free broadband offer has been a big hit with consumers and it remains to be seen whether the company can actually cope with consumer demand.
SCi Entertainment, the computer games group, added 2p to 554p as talk continued that it is about to receive a bid, but shares in the drugs group Antisoma dropped 3.5p, or 15%, to 22.25p, after the company admitted that its partner, Roche, had walked away despite relatively encouraging phase-three trials for two of its cancer drugs. The company said it was regaining all rights to the drugs from Roche and was looking for new partners. Analysts reckon Antisoma will miss out on an estimated $15m payment from Roche and might have to raise more cash.
Finally, Aim played host to a new issue yesterday. Macau Property Opportunities Fund was listed at 100p a share. The company, which plans to focus on investing in property in Macau and the Western Pearl River delta region of China, has raised £105m through a placing with institutions by Collins Stewart.
Macau is currently the only Chinese city where gambling is legal, so its property market is booming and the area is attracting investment. The fund intends to invest in what it terms niche developments and it already has some potential targets in mind. The shares closed at 100.25p.
Peach blossoms
A seven-year-old girl and a fire fighter will today provide a boost to Singaporean-based TV production company Peach Blossom. The Ofex-listed company, which was brought to market late last year by Aim-listed investment house London Asia Capital, has won a contract to produce a 26-part animated children's series called The Incredible Adventures of Kika and Bob - the girl and fireman in question - worth more than £350,000. It has also won a contract with the World Bank. Though the contracts appear small they bring to three the number secured since the float and Peach's revenues to date are already three times what they were last year. London Asia, down 0.5p at 20.75p, has an option over 5% of the firm, priced at 26p a share. Last night Peach closed flat at 23.5p.