THE multibillion-pound market for text messaging is facing tough new regulation under plans by the European Commission to bring text messages under its remit for the first time.

It is understood that a move to regulate texts is being considered as part of a wider shake-up of telecoms rules to be announced by Brussels next week.

The proposal could see operators such as Vodafone, Orange and O2 forced to cap the cost of a text message, although some sources said direct retail regulation had been ruled out.

The proposals are more likely to see monitoring of the wholesale area, for the charges operators make to deliver texts on to their networks.

Any threat to the revenues generated by text messsaging, or SMS, would face fierce opposition from the mobile giants. They are already reeling from recent Commission proposals to force them to cut the cost of calling home from abroad on a mobile.

Since its conception in the 1990s, text messaging has been broadly unregulated, but it is thought that the huge uptake in the service means that the Commission feels it is necessary to bring it within its legal scope.

Unlike 3G, which so far has proved to be an expensive flop, text has been a huge sucess for the mobile operators. The service is critical for mobile phone companies, forming the biggest revenue generator outside voice. In the UK in April alone, 3.6 billion messages were sent.

The first text message was sent in 1992, with a commercial launch in 1995. Initially, texts could be sent only between users of the same network, but in 1998 the market was opened up so texts could be sent, for example, between an Orange user and one from Vodafone.

Ben Wood, of Collins Consulting, a telecoms consultancy, was involved in the team that launched text messaging. He said: “At the time, we had not quite an idea what we were unleashing on the world and how popular it would be.”

At present, 18 separate telecoms markets are “defined” under Commission rules, with national regulators required to review each of those markets. It is understood that Commission officials are deciding whether to include SMS services in the “wholesale voice call” market segment. That would make the texting market liable to periodic review by national regulators to check for any dominance by an operator.

Next week’s wider shake-up of the telecoms rules, which is expected to see the number of regulated markets reduced, is aimed at reflecting advances in technology and how people use electronic communications.

A spokesman for the Commission, said: “We cannot comment at this stage.”

Analysts say that text messsaging accounts for about 15-20 per cent of total UK mobile service revenues — at about £18 billion. James Barford, an analyst at Enders Analysis, said: “A dramatic drop in SMS pricing would be harmful to the operators.”

The importance of text- messaging is underscored by the situation in Japan, where an equivalent of text-messaging that is far cheaper than in the UK is thought to have contributed to a stagnation in voice volumes.

Tensions between the mobile operators and Brussels and between national regulators and Brussels have increased recently after a series of controversial Commission proposals.

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