Written by Cornelia Klugman.
As of 15 June 2017, all European Union (EU) residents can use their mobile phones throughout the EU without additional charges.
- Consumers saved €9.6 billion between 2009 and 2013 thanks to lower roaming charges.
- A genuine digital single market would bring additional growth of €415 billion per year.
Almost all EU residents own a mobile phone for their personal or professional use. When they travel to another EU country and use it to call, text or go online, they used to have to pay additional costs (roaming charges). This situation, which made travel within the EU more complicated and expensive for consumers and businesses, has come to an end: the latest EU Roaming Regulation abolished the extra costs on 15 June 2017. Since then, ‘roam like at home’ (RLAH) has become a reality for all Europeans. The new roaming-free zone covers not only the EU, but the whole of the European Economic Area (EEA), which includes the EU and three European Free Trade Association (EFTA) countries: Iceland, Liechtenstein and Norway.
Over the last 10 years, the EU has forced operators to reduce roaming costs steadily, by introducing four consumer-friendly roaming regulations that have decreased mobile roaming charges for consumers by 92 %.
- First, in 2007, calls became cheaper.
- In 2009, the price of calls and also text messages was further reduced.
- In 2012, the price of calls, texts and also data decreased.
- In 2015, finally, a decision was made on the two-phase abolition of roaming charges: i) an initial phase from 30 April 2016, reducing roaming charges still further for calls, texts and data, and ii) a second phase, abolishing intra-EU roaming charges completely from 15 June 2017.
The European Parliament has played a crucial role in this process. In its 2013 resolution on ‘the Digital Agenda for Growth, Mobility and Employment: time to move up a gear’ it argued that roaming costs made mobility more costly and thus impeded growth. When legislating on the Telecoms Package, it voted in favour of the abolition of roaming charges by the end of 2015. This took until 2017, because the European Commission had to investigate market conditions in more depth.
For the mid-June 2017 deadline to become a reality, an agreement was needed on the wholesale roaming charges to be applied between operators. Even though travelling customers will no longer pay roaming charges, their operators will continue to pay for their customers’ usage of foreign networks. In negotiations with the Council of the EU, Parliament significantly reduced the caps for wholesale charges put forward by the Commission, especially those for data. The reduction in wholesale prices negotiated by Parliament secures clear benefits for consumers, as they will be able to use much higher data volumes when travelling in the EEA and using their mobile phones to go online.
European added value of the roaming regulations
The Commission estimates that travelling consumers saved €9.6 billion during the 2009 to 2013 period owing to the fall in roaming charges, and that they will save even more in the years ahead. These advantages also extend to companies and their travelling employees and contribute to the completion of the single market: Wi-Fi hotspot aggregator iPass has calculated that, on average, business travellers consume 4.5 gigabytes per trip, costing their companies about €900 in monthly roaming charges, even following the 2014 reduction. In addition, RLAH facilitates the administrative and accounting procedures for a business trip.
For citizens who rarely or never travel abroad, or companies that conduct most of their business in their home countries, however, it has been feared that operators might raise domestic prices to compensate for the losses incurred on account of the obligation to provide roaming for free. To counter such trends, Parliament has obliged the Commission to review the situation of the wholesale market every two years, and check if it is affecting domestic markets and prices.
To prevent abuse, and ultimately protect domestic customers, the Commission has introduced optional fair use rules. These are designed to prevent permanent roaming, meaning the regular use of a foreign SIM card in one’s country of residence, without any special links to the country in which it was issued. In addition, operators offering unlimited or very cheap data, a widespread practice in Nordic countries, are allowed to restrict free data roaming if it surpasses a certain level, and charge their customers for any additional data at no more than the wholesale price agreed in the wholesale market regulation.
The transparency of the new rules is beneficial to both consumers and operators: customers do not have to fear ‘bill shocks’ any more. RLAH is applied automatically after notification by operators, and so, more customers are likely to leave their phones switched on when travelling.
Outlook: completing the digital single market
Completing the single market for goods and services not only offline but also online is one of the Commission’s 10 key priorities. The initiatives included in its 2015 strategy on the digital single market (DSM) include reforming the EU’s current regulatory framework for telecoms and the copyright framework, and also removing the existing barriers to e-commerce. Parliament’s European Added Value Unit has estimated potential gains in gross domestic product (GDP) from completion of the DSM at €415 billion, or 3 % of GDP per year. The Commission is also predicting widespread benefits for society; according to a recent survey, two thirds of Europeans think that the use of the newest digital technologies has a positive impact on society, the economy and their own lives. They expect the EU, Member States and companies to address the issues raised by digitisation, such as the impact on jobs and the need for better digital skills. The current differences in prices of mobile services and fragmentation of the mobile communications market, however, show that the DSM is far from complete. The end of roaming in the EU is a crucial step forward, but more remains to be done. Amongst the tasks ahead, the Commission’s May 2017 mid-term review of the DSM mentions work on the free flow of data, cybersecurity threats and online platforms.
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