Neelie Kroes, the European commissioner for the digital agenda, has set herself up for a summer battle with Europe’s biggest telecoms companies, dismissing their justification for roaming charges as a “myth” that impedes the smooth running of the single market.

The European Commission has become the target of an intense lobbying campaign by telecoms firms, which fear that legislation that Kroes is planning to propose on 10 September will destroy their business models, ruin their profits and make investment in infrastructure almost impossible.

Kroes met the bosses of the biggest telecoms companies on Monday (22 July), following talks with executives from their smaller rivals last week, but she appears to be not inclined to yield to some their most far-reaching demands as the fine-tuning of the proposals enters its final six weeks.

The Commission is planning a radical overhaul of much of the regulation affecting the EU’s telecoms market. A proposal that would all but eliminate roaming fees – charged when customers make or receive calls or data transfers while abroad – has prompted most alarm among the industry.

But Kroes’s radical ideas include a new framework for net neutrality, a more harmonised approach to radio-spectrum allocation for broadband, and changes to make it easier for telecoms companies to operate in more than one country.

The plans have dismayed many in the industry who accuse Kroes of promoting consumer-friendly policies, such as the proposed cuts in roaming charges, to disguise a lack of action to enable consolidation across Europe. The roaming plan has itself led the sector to warn about threats to profits and investment.

“The sector needs a long-term policy view that goes in the direction of favouring investments and avoids measures that might destroy market value”, said Luigi Gambardella, the chairman of the European Telecommunications Network Operators’ Association (ETNO), which represents most of the EU’s top telecoms companies.

The revenues of telecoms firms have been declining for several years, and the companies themselves have predicted falls in revenue of up to 2% every year until 2020. They say that growth in the sector is between seven and nine times lower than in the US and Asia, and they blame the EU’s “outdated and intrusive” regulation. In a statement to European Voice,

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Kroes said that high roaming charges were a “cash cow” that did not have any place in the single market. “Operators have long resisted attempts to stop them charging over the odds on roaming rates,” she said.

She said that revenues from roaming and investment levels were “unrelated”. “It’s a myth to say that EU-wide mobile bundles would kill investment,” she said.

The quandary for policymakers is working out how to enable telecoms companies to make sufficient profits to encourage them to invest in infrastructure for better and faster technologies, while ensuring that the sector is not dominated by just a few large companies that can charge consumers unreasonable prices.

According to ETNO, investment in telecommunications infrastructure in Europe has declined by about 2% every year for the past five years. This, the organisation says, means that €3.5 billion less was invested in 2012 than in 2008, making it almost impossible to reach the Commission’s digital agenda target of universal access to broadband faster than 30 megabytes per second, with half above 100 mbps, by 2020.

As part of its lobbying campaign, ETNO published a study last week (19 July) indicating that the shortfall in investment needed to meet the Commission’s digital-agenda targets would amount to between €110bn and €170bn.

The study called on the Commission to allow “substantial deregulation” of fixed-line wholesale access and for competition rules to change to enable more mergers of telecoms companies.

A spokesman for Kroes said: “It’s strange that some companies seem to want to talk down their own share price. Any disruption from eliminating roaming charges pales in comparison to the benefits of putting in place a single market, especially the benefits of more and cheaper spectrum for mobile.”