The EU have been negotiating mobile surcharges when roaming abroad, for over a decade – so when it was announced that these charges will be eliminated mid-June, many saw it as a success worth celebrating.
Plans to end the surcharges began as far back as 2004, and for the previous two years operators have been actively preparing for the changes, drawing out negotiations over roaming rates that operators will charge each other for mobile data.
European mobile phone contracts are now required to charge domestic rates for calls, texts and data when users travel in the EU, raising pressures on operators in a tight market.
Some telecoms companies, mostly smaller ones, have applied for extensions to the rule, and seek to continue charging minimal roaming charges, fearing it will be bad for their bottom line.
Roaming data usage is likely to show significant increases, as customers gradually begin to use data roaming more often without fear of heavy surcharges – and this could lead to significant losses for smaller operators.
Although great for the consumer, some Southern European countries main concern is that they will lose a form of income from tourists’ home telecoms providers, and are finding that the new plan comes at their expense.
Telecoms business varies from country to country, and it will be hard to tell how much of the move will affect each operator, yet the European Commission revealed estimates that the end of roaming fees will cost operators 1.2 billion euros.
However, as consumers begin to use their mobiles more sparingly, the European Commission hopes that consumption rises faster than the pace of dropping prices.
“There are positive aspects that are being underestimated, particularly how the public sees the operators” said Roland Berger’s Victor Marcais, highlighting that the changes could serve to improve the reputation of telecoms operators.
The Commission has vowed to review the wholesale rates at the end of 2019, and assess the existing market conditions and how well the operators have adapted to the new business model.
How are some teleco’s trying to bend the rules?
- Some operators may have to hike up their domestic rates to cover their loss from roaming. If consumers use more data when they travel, they might buy more expensive packages with higher data allowances.
- Some may charge limited fees with a cap, if a user spends more time roaming than in the country where they pay their bill.
- Some firms could stop offering roaming altogether on their tariffs, meaning users would have no service when they cross an EU border.
- Some operators will simply request to be exempt from the rules, if they can prove their business would suffer.