EU abolishes roaming fees, though criticism remains

EU leaders hailed the abolition of roaming fees across Europe, but critics say the level set for wholesale rates will create market imbalances which will be detrimental to consumers.

 Consumer surcharges for roaming services across EU countries were banned at midnight.

The legislation is the culmination of a lengthy regulatory process and heated negotiations between industry stakeholders and even conflicting parties within the European Parliament, Commission and Council.

Wholesale price caps,the last piece of the legislation to be put in place, were finalised in April, yet the criticism of this section of the policy continues.

Trade association MVNO Europe – which counts some of the continent’s largest MVNOs as members – said the level of wholesale surcharges operators are allowed to charge each other created market imbalances.

In a statement, the organisation called for the European Commission to conduct an in-depth analysis of roaming surcharges for all services, pointing specifically to the risk for IoT deployments.

MVNO Europe VP Innocenzo Genna said: “The entire mechanism, in particular the wholesale caps, must be strongly revised to eliminate competitive unbalances that, at the end, would be detrimental for the consumer in terms of tariffs, variety of offers and innovation.”

Market failureIn a joint statement ahead of the law taking effect, Antonio Tajani, president of the European Parliament, European Commission president Jean-Claude Juncker,  and Malta’s PM Joseph Muscat – on behalf of the EU Council – called the abolition of roaming services “one of the greatest and most tangible successes of the EU”.

They said: “Over the last 10 years, our institutions have been working hard together to fix this market failure.”

“The EU has managed to find the right balance between the end of roaming charges and the need to keep domestic mobile packages competitive and attractive. 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.”

Operator responseFollowing final sign-off of the policy in April, several operators have attempted to use the end of roaming charges as a marketing tool.

Some have also added additional destinations outside of the EU bloc as an differentiator for their services.

However, the impact on the bottom lines is still unknown and several companies warned during Q1 investor meetings they were braced for the impact.

Swedish Group Tele2 said it expected earnings for the second half of the year would be hit, while Vodafone Group reported reduced roaming revenue had already impacted its UK performance in the financial year ended 31 March 2017.