After more than a decade of EU negotiations, Europeans will no longer pay mobile roaming surcharges when they travel out of their home country starting Thursday.
Or so they think.
“Eliminating roaming charges is one of the greatest and most tangible successes of the EU,” the EU institutions touted in a collective statement Wednesday.
In reality, some consumers will continue to pay roaming rates. Others might get far less of a license to roam than the European Commission intended.
Dozens of telecoms providers have applied for exemptions to the rules, allowing them to continue charging even marginal roaming rates if only temporarily, while others in countries including Poland refused to implement the rules according to EU demands. Some telecoms providers have threatened to ditch roaming services altogether, offering only domestic plans instead.
The Commission made a concerted effort this week to downplay these cases.
“We now see that operators are by and large implementing the rules,” said Anthony Whelan, a Commission telecoms expert, in a Facebook Live broadcast on Monday.
The Commission said that out of thousands of telecoms operators, only 36 applied for exemptions to the rules. And telecoms operators trying to flout the rules are an isolated case. The Commission said it will encourage their national regulators to quickly whip them into shape.
“Operators have had two years to prepare for the end of roaming charges, and we are confident that they will seize the opportunities the new rules bring to the benefit of their customers,” European Parliament President Antonio Tajani, European Commission President Jean-Claude Juncker and Maltese Prime Minister Joseph Muscat, whose country holds the rotating presidency of the Council of the EU, said in a joint statement.
Part of that preparation involved a drawn-out negotiation over wholesale roaming rates, the prices telecoms operators charge each other when their customers use foreign networks while traveling. If telecoms stop charging consumers for roaming, then businesses were also expected to charge each other less to piggyback on each others’ resources.
Some telecoms, especially small ones, plan to follow the rules but are grumbling in the background about the Commission’s play to win consumers. They fear it will be bad for their bottom line once the rules apply and user habits actively change.
They are most concerned about data. The prices telecoms operators charge each other for mobile data are still far too high, many telecoms operators told POLITICO.
“Roaming data usage is likely to show significant increases,” said Massimiliano Parini, the head of CoopVoce, a virtual network operator in Italy. That could lead to significant losses, especially for smaller operators. “Customers currently show very low usage of data roaming because of fear of incurring in heavy surcharges.”
Fraught history
The pace of evolution in the telecoms market has long been an issue in the negotiations.
Plans to end roaming surcharges across the EU date back to 2004.
They were drawn up after many customers complained to their MEPs about shock bills: Returning from holidays abroad, people would find they owed thousands of euros for using their mobile phones to make calls.
Back then, consumers didn’t rely on mobile data, said Luxembourgish MEP Viviane Reding, the commissioner for information society and media at the time. During her term, she managed to negotiate a cut in the price of roaming rates by around 60 percent, she told POLITICO.
When Neelie Kroes took over as the commissioner for the digital agenda in 2010, she aimed to address data prices in roaming. It soon became an annual summer feel-good story for the EU to declare another reduction in roaming surcharges.
Negotiations to fully eliminate roaming surcharges, however, had many false starts over the past decade.
“Roaming took so so long,” Digital Vice President Andrus Ansip lamented to POLITICO in an interview earlier this year.
The Commission wanted to wrap this up once and for all this year, especially with many sensitive national elections and Brexit in the background. Juncker wanted to show that the EU was good for Europeans and consumers: Nixing roaming would be a shining example of that.
While companies and national negotiators finally managed to sign off on an agreement on the wholesale rates earlier this year, some telecoms providers say the final plan comes at their expense.
“Now we have a clear paradigm shift. To force mobile operators to make losses is very new. From a business standpoint it’s not that easy to understand,” said Michael Krammer, the CEO and founder of Ventocom, an Austrian and Slovenian mobile provider.
“The way they regulated … the wholesale prices is totally populistic. It seems to be good for the consumers but it’s especially bad for those operators who are small.”
The future
However, the fortunes of smaller telecoms such as Ventocom should improve in the coming years. The rates telecoms providers charge each other are expected to drop progressively as part of the agreement struck between the Commission, Parliament and Council earlier this year.
But telecoms providers in Southern European countries, where many tourists go on vacation particularly in the summer months, will feel the pain as they get less income from tourists’ home telecoms providers.
The Commission vowed to review the wholesale rates at the end of 2019, with a preliminary assessment scheduled for December 15, 2018. Then, they will assess how telecoms providers have adapted to the new rates and if they still apply to the existing market conditions.
As communication in the EU continues to evolve, so will the roaming rules.
Many of the companies applying for exemptions, such as Finland’s Elisa, offer unlimited data plans. These plans are likely to become more and more popular in the coming years, posing new pricing challenges for businesses. If telecoms companies are still charging each other high prices for data roaming and customers don’t have caps, the new business model could become problematic.
The EU telecoms market could also change in other ways because of a new regulatory framework, the European Electronic Communications Code, now being discussed among the EU institutions.
Some telecoms want the Commission to focus on their needs for a change in the broader market, now that the more than decade-long roaming battle is done. Issues like building infrastructure for 5G, freeing up spectrum frequencies and investing in telecoms innovations should be at the forefront of the policy agenda, they say.
“European telcos have worked day and night for the past three months to ensure accurate implementation,” said Alessandro Gropelli, a spokesperson for telecoms trade group ETNO. “Europe should now focus on broadband investment and refrain from micromanaging markets.”
Ryan Heath and Peter Baugh contributed reporting.
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