The weather is still quite cold, yet the time is coming when many start planning the next summer getaway. In addition to booking a hotel, arranging for a flight or train ticket and perhaps booking a transfer, thinking about how much it will cost to keep in touch with friends and family via ‘phone, text and social media is now an item high on every traveller’s agenda. Although consumers have become incerasingly savvy in the way in which they manage their mobile ‘phone bills at home–whether they rely on a contract deal or just on a pay-as-you-go SIM card–the thought of having to shoulder sometimes significant roaming charges once abroad still creates concerns to many of us. It is not just about the actual amount of charges, but more generally about an issue of transparency–in other words, what seems perhaps more worrying to many users is not knowing how high or how low these charges will be and therefore being potentially exposed to the risk of receiving a very hefty phone bill. Especially among those users that rely on contract deals, many “horror stories” have emerged of telecommunication companies being able to charge thousands of pounds for roaming charges to clients who, perhaps unadvisedly, may have relied a bit too much on their mobile phones, whether for conversations or for data services, while on holiday (see for instance the telltale of a Vodafone customer… http://www.thetimes.co.uk/tto/money/consumeraffairs/article4700404.ece).
It is true that over the past few years mobile phone companies have been increasingly attuned to the demands of travellers and therefore sought to adapt their business models in order to be better able to internalise roaming costs in clearer, leaner and perhaps on-off charges so that their users would not be unduly “penalised”: however, not all customers were best served by these deals. Paying £2 as a one-off roaming charge on top of normal user rates for, say, a week’s worth of data services used abroad may sound quite a good deal if one relies on a smartphone for daily internet access. If, by contrast, the same charge was levied for a 2 minute phone-call just to alert Mum of one’s safe arrival, a customer could be forgiven for feeling aggrieved! (for a very interesting report, see: http://www.theguardian.com/money/2014/jun/28/roaming-charges-how-avoid-smartphone-bill-shock-post-holiday)
Worry no more, or at least far less though: roaming fees are set to end, and very soon. Following the vote of the European Parliament in October 2015, the proposal made by the Commission and adopted by the Council in July of the same year is going to lead to a drastic reduction of existing caps on charges effective as for 30 April 2016, to lead to the outright abolition of roaming fees on 30 June 2017. These measures are part of a wider masterplan, orchestrated b the EU Commissioners and formally laid out in a document published in May 2015, aimed at the creation of a Digital Single Market for the EU, namely an area without internal borders where both consumers and suppliers can, respectively, “buy like at home” and “sell like at home” digital goods and services. The strategy encompasses three pillars: the abolition of existing barriers to the free movement of these goods and services; greater investment in infrastructure, so that the latter can fully support and boost growth in this key area of the European economy; and supporting the digital economy more specifically, by boosting, among others, the free flow of data, the standardisation of protocols for the supply of digital services across Europe and the promotion of interoperability and encouraging new entrepreneurs to “make a go” of digital services in the EU (see: https://ec.europa.eu/digital-single-market/en/digital-single-market).
In this context, the EU Commission has seen roaming charges as an increasingly problematic barrier to the free flow of digital services, not just limited to telecommunications, across the EU: its Connected Continent communication saw “phasing out the difference in charges paid for domestic, roaming and intra-EU calls” as an indispensable plank of this strategy. Relying on the market forces through a carrot and stick approach, the Commission has therefore acted to eliminate gradually these charges: thus, on July 1 2014 operators lost the right to levy a fee for receiving calls when their customer used his or her ‘phone in another member states; as to making calls, they were faced with the choice of either implementing the ‘roam like at home’ policy and thereby allow their customers to use their devices anywhere in the EU at domestic rates, in exchange for being free from a number of regulatory burdens, including the ability for the customer to opt out of roaming services offered by his or her own operator while abroad. Or they could continue to charge, but at a cost: their clients could in fact seek out competing roaming charges in another member state for the time that they spent abroad.
The 2015/2212 Roaming Regulation was enacted to implement the pathway toward liberalisation of mobile phone services: at its core was the realisation that, despite the relative success in take up of roam like at home, significant disparities remained as to the quality of service throughout the EU, levels of roaming fees being charged, standards of customer service, and especially of fee transparency–all of which could have a real impact on the ability of EU citizens to enjoy their freedom of movement of services. The regulation set up price caps for roaming services; it subjected their application to a “fair use policy”, according to which customers could not rely on capped tariffs and thereby de facto “abusing” the service, for instance by downloading “anomalous” quantities of data; it further stated that telecom operators could petition the regulator to obtain permission to reinstate higher charges if the impact of the capped tariff was to detabilise their existing service tariffs’ structure, in light of objective criteria (see: https://ec.europa.eu/digital-single-market/en/connected-continent-legislative-package).
A review of the roaming services market, which concluded in February 2016, showed significant support for the realisation of this important aspect of the Digital Single Market, thus not only confirming the EU in its commitment to ending the charges but also spurring mobile phone operators toward providing cheaper, more innovative and more efficient services for consumers (see: https://ec.europa.eu/digital-single-market/en/news/public-consultation-review-national-wholesale-roaming-markets-fair-use-policy-and). 30 April 2016 will see yet another plunge in the level of remaining fees, and eventually next summer we will all be able to go on holiday and use our mobile devices without the fear of being hit by huge bills and while being safe in the knowledge that our “at home” prices will apply regardless of whether we are sitting in the sunshine of Tenerife or we are trying to shield ourselves from the wind on Balmedie Beach in Aberdeenshire.
In the words of Andrus Ansip, vice-president of the Commission and lead on the DSM, “this is not only about money: this is about bringing down barriers in the Digital Single Market” and in particular it is the first milestone toward a Telecoms Single Market. Gunther Ottinger, EU Commissioner for the Digital Economy and Society, echoed these views and added: “Roaming charges will soon be memories (…)” and along with the introduction of net neutrality obligations “every European [will] have the right to access the content of their choice, without interference or discrimination”, through price differential or via content- or technology-based requirements. A more integrated digital market will therefore not only benefit consumers but also businesses, who will be fully capable of operating and competing on a level-playing field (see: http://europa.eu/rapid/press-release_IP-15-5265_en.htm).
So far so good? from a consumer standpoint, it certainly seems as though we are edging close to full market integration when it comes to digital services… but at least for UK citizens and commercial entities, 23 June 2016 may yet prove to be the proverbial sting in the tail in all of this otherwise positive scenario… Could Brexit affect the “glidepath” toward a European digital single market? This certainly is a key question–as the UK leaves the Union, it could be expected that these provisions, to the extent that they belong to EU law, may no longer be applicable. However, would going back to charging for roaming be a “sensible proposition”, whether politically or commercially? From a political standpoint, the UK Government “non-paper” on the EU Digital Single Market strategy (see: https://engage.number10.gov.uk/digital-single-market/) signals a strong commitment toward the full integration of the telecom services’ industry throughout the continent: this encompasses both the abolition of roaming charges and net neutrality obligations. Ed Vaizey, then in charge of Culture and Digital economy affairs, told the House of Lords as far back as in September 2015 that there would be no backtracking from the abolition of roaming charges, even in the event of the UK exiting the Union. He pointed out that, as some of the current EEA states do, the UK would be fully behind continuing with these deals (see: http://www.euractiv.com/section/digital/news/brexit-won-t-affect-roaming-charges-vows-uk-government/) Nonetheless, very little detail was given on the way in which this aspect of the transition out of the EU would be dealt with by the UK institutions: would ad hoc legislation have to be enacted? or would regulatory measures, perhaps adopted by OFCOM, suffice?
From a commercial standpoint, it may well be argued that this aspect of the debate highlights the great uncertainty that Brexit introduces for commercial operators. The Association of British Travel Agents, among others, commissioned a study on thje question of what consequences Brexit could have on roaming charges: in the report significant concern was raised at the possibility that as a result of a “leave” vote these charges could be reintroduced, much to the dismay of UK holiday makers (see: https://www.cable.co.uk/news/will-brexit-mean-higher-mobile-roaming-charges-in-europe-700001399/). On this point, a “ray of hope” could conceivably come from the mobile phone providers themselves: it could be argued that, as the abolition of roaming charges has been a long-term goal for a significant length of time, they have had plenty of time in which to adjust to this outcome and for that purpose to internalise its consequences. The statutory framework, for its part, has facilitated them in this process, especially through its tariff sustainability mechanism. Accordingly, one could perhaps be slightly less pessimistic than ABTA and suggest that reintroducing charges may not only be a risky proposition in the face of strong competition that these companies face. It would also be hard to justify if not as a profit-making exercise.
The Digital Single Market is a challenge and at the same time an opportunity for businesses and consumers, as well as for governments who are faced with having to deal with the transition to a borderless world. Abolishing roaming charges is certainly a remarkably beneficial change: it will not only mean more money in the pockets of consumers, but will also instigate greater innovation and stronger competition, especially on grounds of quality and efficiency in a very strong sector of the EU and the UK economy: politics, especially in the UK/EU compartment, may challenge some stakeholders as we progress toward an increasingly integrated EU telecoms market. However, its undeniable economic benefits may provide the best argument yet not just for achieving these goals of integration but also for remaining part of the European project as a whole.
Nota bene: a version of this post was also published by the Scotsman on 13 June 2016…