Europe finally abolishes mobile phone roaming charges

Members of the European parliament have voted through new rules that will scrap mobile roaming charges and stop holidaymakers returning home to the nightmare of a massive phone bill racked up on their travels.

The vote sees the deal reached between European authorities in June to scrap increased costs for calls, text and data while roaming with the EU, passed into law.

UK mobile phone users who travel within Europe will only have to pay the same prices as they would at home, curbing the cost of continued mobile connectivity while abroad.

Former vice-president of the European Commission and rapporteur for the Trade in Services Agreement, Viviane Reding said: “After 10 years of tireless fight, roaming is over. A victory for consumers and a stepping stone towards a truly European digital single market.”

Liberal Democrat MEP Catherine Bearder said: “The end of rip-off roaming fees is a massive win for British consumers. Driving down costs and making it easier to travel is what being in the EU is all about.

“This shows what we can achieve when Britain plays a leading role in Europe.”

The news was welcomed by campaigners, though some were cautious over some clauses that might limit the agreement’s utility for all.

Monique Goyens, director general of the European Consumer Organisation said: “Another cost cut for mobile use abroad by April 2016 is good news, but is still only a half-baked solution.

“Allowing companies to limit roaming rights for frequent travellers, for example, is certainly not the promised end of roaming in Europe. A real zero-roaming Europe hinges on a major telecom market reform, which is a mammoth task to achieve in just 13 months.”

More than two years in the making

The vote followed more than two years of negotiations and U-turns as the European parliament butted heads with EU member states concerned about the financial impact on their national telecoms groups.

The anti-roaming plans had been scheduled for the end of 2015, but were blocked in March by ministers of national governments through the European council.

The roaming plans were twinned with a vote over amendment to telecoms regulation that would have reinforced European net neutrality, the principle that internet service providers should not give preferential treatment to certain websites and services. The amendments were rejected, leading to criticism by net neutrality campaigners.

The commission is saying the new amendments to the telecoms market will be an end to “huge telephone bills ruining your holiday budget”.

This year, phone operators can still charge travellers to European member states up to 19 cents (14p) a minute for outgoing calls, five cents for incoming calls, six cents per text message, and 20 cents per megabyte of data downloaded, on top of their normal tariff.

In April next year those costs will be reduced to five cents per minute, two cents per SMS and five cents per MB. Roaming charges will not be completely removed until June 2017 and will require reform of the roaming wholesale market on which national phone operators across Europe trade services between each other.

It is this trade that allows UK mobile phone users to make calls, send texts and access data using European networks while in countries such as Germany, Spain or France.

Some operators ahead of the pack

Some UK mobile operators have come out ahead of the roaming changes, others have stuck steadfastly to increased charges that can see bills of hundreds of pounds for holidaymaker usage that would not seem out of the ordinary in the UK.

Some operators, including Vodafone UK, added daily charges to user bills for use of their allowance in European countries. Others, including Hong Kong conglomerate Hutchison Whampoa’s Three UK mobile, removed roaming charges for those travelling to a selection of European countries, mirroring the end goal for the newly passed legislation.

Kester Mann, mobile operators analyst with CCS Insight, said: “A number of providers have opted to offer inclusive roaming in many tariffs. This is a smart and differentiating move given that has resonated well with customers – Three’s Feel at Home service has saved customers £1.3bn in roaming charges and has been used by over 2 million customers.”

Ernest Doku from Uswitch said: “Bill shock from holidaying in the EU affects more than 9 million UK mobile users a year according to our research.”

One-fifth of UK mobile users travelling to the EU in the last year have faced higher than usual bills for usage, collectively amounting to £573m, according to data from Uswitch. The average charge added to bills was £61 on top of a user’s standard contract charge, while 17% faced bills of £100 or more.

Reducing revenue streams for operators

While consumers may welcome the news, some have seen the moves to cut premiums for roaming as potentially damaging to the operation of mobile operators, removing a lucrative revenue stream.

Others see the moves as opening new routes for revenue potential from increased overseas mobile use.

Mann said: “European operators have seen roaming revenue fall rapidly over the past few years following implications of legislation from Brussels. The fall in roaming revenue for operators is sharpening their focus on new areas such as machine-to-machine connections and vertical segments.

“There may be a temptation for operators to raise roaming charges outside the EU to compensate for the decline in revenue in the Union.”

Jennifer Kyriakakis, co-founder of telecom systems provider Matrixx said: “The fact is that most customers – approximately 90% – don’t use their mobile devices while they’re abroad, especially for data services, and when they do they reluctantly pay a premium for it.

“With more subscribers using their phones abroad … operators could have a much larger revenue stream that’s both predictable and sustainable, while simultaneously driving customer loyalty instead of driving them away.”

Not universal approval

The abolishment of roaming charges was not met with universal approval. In the days before the vote Roger Helmer MEP tabled an amendment to reject the agreement on behalf of Ukip.

Helmer said: “Lower prices for jet-setters will mean higher domestic prices. The EU plan is good for MEPs, bad for voters.”

The next step for regulators is a reform of the roaming wholesale market, which has potential to further delay the process of roaming charge removal beyond June 2017, should talks drag.

Once agreements are in place, it could take the European mobile phone operator market one step closer to being free of its current geographic restrictions.

Mark Windle, head of marketing for telecoms software provider OpenCloud said: “Most mobile network operators are limited to a market defined by their own radio-access network – services are defined by, and delivered from, individual service-siloes in each country – but service provision is capable of being pan-European, if not global.

“The change in roaming charges may flatten the EU for travellers, the creation of a single communications market is not yet in place. But it is coming.”

comments powered by Disqus