Competitive Intelligence: The EU’s new roaming rules: big changes for travellers in Europe

WAITING for one’s smartphone to find a signal after landing has become a familiar part of flying. Travellers gaze at their devices, anxious for a connection and the adrenaline rush that accompanies receiving a few hours’ worth of notifications in one blast. Meanwhile, a complex process is occurring. The local mobile network is calling up the flyer’s home network, asking if they will accept the connection fee, and then connecting only with its assurance that it does. Once this connection is made, the traveller is said to be roaming: using their device on a foreign network. Roaming has been the culprit in many cases of “bill shock”, when travellers return from holiday to find that they have run up huge phone bills. But as of June 15th, roaming fees are no more, within the EU at least.

The battle to end roaming fees has always been about European political goals and market unification as well as consumer protection. It began in 2006. Viviane Reding, then the European commissioner responsible for telecoms and media regulation, announced the project by saying that “it is only when using your mobile phone abroad that you realise there are still borders in Europe”. The complication of using a phone abroad stems from the fact that the shape and properties of a mobile network depend on the physical and social geography of the country it serves. Networks in Britain are designed to handle the heavy traffic of the relatively dense population, for instance. This means that some charge more than others for access. Networks make up the difference by charging a fee to allow customers from foreign networks to gain access to them, as well as for the administrative load of registering the new guest. The size of this fee depends upon the relationship between the networks, and how much flow there is between them.

The new “Roam Like at Home” rule mean consumers no longer need to worry about any of this. Every EU citizen’s home plan will work anywhere in Europe, at no extra cost. Calls, data and texts are all free. This constitutes a significant change. Data, on average, used to be dear, costing €6 per MB in 2007. Calls were €0.49 a minute, and an SMS cost €0.28 to send. The networks must still pay the costs that arise from their customers connecting to foreign networks, but those fees are no longer passed on as roaming charges.

Some mobile network operators will do well out of the new deal. Networks in Mediterranean countries, for example, will be paid for the data gobbled up by Instagramming tourists. Consumption will soar, now that the tourists don’t pay those costs themselves. But since fewer residents of the Mediterranean venture north for holidays than northern Europeans head south, sunnier countries may do well out of Roam Like at Home. Large transnational operators like Vodafone and Telefónica will be insulated from this, as they can balance traffic flows through their different operations in each country. The new law may not be all good for all consumers; it is possible that non-roamers will end up subsidising the more expensive needs of roamers, as the networks respond to the lost roaming revenue.

Source: The Economist explains, Jun 15th 2017, by

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