From 1 July 2014 it should be possible for European consumers to choose an alternative mobile operator when travelling in the EU, regardless of their operator at home. Under its latest proposals for roaming regulations, the European Commission wants to require all operators to allow 'roaming operators' on their networks, at regulated wholesale prices. From mid-2014, consumers should be able to choose a roaming provider, independent of their contract with a national operator, and still keep the same Sim card and phone number. Once they cross the broder, the phone should automatically switch to their chosen roaming provider.
This new form of competition is expected to lead to lower prices. In addition the wholesale price caps for calls and SMS will gradually be reduced in the period to July 2014. After that they will be the same until at least 2018 and possibly until 2022. EU commissioner Neelie Kroes also wants a retail price cap on data roaming, of EUR 0.50 per MB from July 2014. The retail cap would be in place until mid-2016.
There is already at least one MVNO for data roaming: Abroadband.com, a Telekom Austria brand. It offers data at EUR 0.59 per MB, roughly the same as the EC’s proposed retail cap (EUR 0.50 excluding VAT for 1MB). However, Abroadband.com requires a separate Sim card and only works with laptops, not phones. Kroes is proposing a more complicated solution than a separate Sim.
The bigger operators are already offering data bundles with lower tariffs. The GSMA has researched in each country the cheapest tariff on each operator’s website and calculated an average. Its survey found that the price per MB is has fallen since April.
Still, the GSMA’s research only shows what kind of tariffs are on offer, not what the consumer actually pays. The GSMA implies that the market is transparent, efficient and competitive, and all the consumers operate rationally. That’s like saying everyone with savings has an account with the highest interest rate, or every driver fills his tank at the cheapest petrol station. In other words, there are some things to question in that research.
The operators have another issue of contention. The German operators, both the big incumbents and the small alternative providers, claim that Kroes can’t impose retail regulation. The law requires first an attempt at wholesale regulation and only if that doesn’t work, then retail measures. This battle still needs to be fought.
It’s worth noting as well that roaming is only a tiny part of the bigger mobile market. The European Commission estimates the European roaming market is worth around EUR 4 billion per year, which is less than the total domestic market in the Netherlands. This is around 4 percent of total EU market revenues. The amount may still grow if consumers find that can’t do without their smartphones abroad.
Commissioner Kroes wants the difference between domestic and roaming tariffs eliminated by 2015. In principle this is possible, as digital services can be delivered anywhere. But however the market develops, most people spend most of their time in their own country, so there will always be national markets. It would therefore be inappropriate to use the roaming regulation as a way to indirectly put pressure on domestic tariffs in countries where pruices are still more expensive than the European average.
