By Armida van Rij
With summer now firmly underway, and many people taking their holidays, our continental neighbours have a very timely present for the UK: as of yesterday, all EU citizens – including UK residents – will no longer pay roaming charges for using their mobile phones abroad in other EU countries, as well as being far less likely to face ‘bill shocks’ when returning from foreign trips. Unfortunately, however, there’s a big, obvious stumbling block for those of us who live in the UK: Brexit. So how will the UK’s departure from the EU impact British residents with regards to this policy?
Roam Like at Home: what is it?
In a nutshell, the ‘Roam Like at Home’ policy means that while you’re abroad in other EU member states, you pay the same rates for calls, texts and data across the EU as you would at home, rather than pay the extra charges applied as soon as you connect to a foreign operator.
Of course, there is the small print that consumers need to be aware of. It will not be possible to opt into the cheapest operator package in a neighbouring country and ‘roam’ at even less cost: there are time limits (four months as set by the EU, but mobile network operators may include shorter timeframes as part of their standard contracts) on how long you are able to roam at no charge. These measures are required to ensure fair competition to operators across the Member States.
Abolishing roaming charges is the latest step towards the ‘Digital Single Market’ that the EU is trying to create, which aims to lower the barriers that prevent consumers across the EU from accessing the same services for the same price. The completion of such an EU-wide online market place is estimated to contribute €415 (£366) million per year to Europe’s economy, while creating jobs and changing the way people go about their daily lives.
What are the potential issues with it?
Although long proposed by the European Commission, this is not a straightforward policy, particularly due to the number of actors involved. The legislation comes from the Council of the European Union, meaning ministers from all member states have been involved in setting the regulatory framework for EU telecom companies to operate in. Within this framework, it is up to the telecom companies to decide on the details of what they will offer their customers, including whether or not the new policy also applies to European Economic Area (EEA) countries, as well as the specific terms and conditions.
Criticism from industry has suggested that the anticipated fall in revenue will actually drive up the price of mobile plans. At the moment, consumers spend €12 (£10.5) billion a year on alternatives to mobile data. Although roaming costs have fallen by 80 per cent already as a result of EU legislation, the Roam Like at Home policy is expected to cost mobile network operators in the EU an estimated 2 per cent of their annual revenues, or €1.65 (£1.44) billion, amounting to €7 (£6.1) billion by 2020 according to ETNO, an industry group.
On the other hand, the policy will mean operators are now able to tap into a market of users who previously would either not use their phone at all while abroad, or only when absolutely necessary, to avoid the high prices. According to the E-Communications and Telecom Single Market Household Survey, in 2014 52 per cent of EU citizens switched off their mobile phone when abroad and/or switched off data roaming, rising to 56 per cent among those who were regular travellers.
Brexit bites back?
For UK residents, the question is of course whether all of this means two years of charge-free roaming when abroad, before being thrown back to the mercy of commercial operators once Britain leaves the EU. As always, things are a little complicated. But from the information we currently have, there might be hope yet.
There are three key considerations: legal, commercial and political.
Legally, based on the current agreement, there is very little that would stop telecom companies from reinstating roaming charges after March 2019. EU Regulation No 531/2012, which sets out the obligations for mobile network operators and the application of the policy, may no longer apply once the UK leaves the EU.
Bringing back the charges would also be a commercially attractive option – as has been pointed out, they are highly profitable. This is also part of the reason why it has taken so long to abolish roaming charges in the first place; the revenue generated by EU mobile network operators from applying these charges would have reached $42 billion by 2018, 47 per cent of the value of the global mobile roaming market – so operators were naturally reluctant to forgo such a lucrative part of their business.
Could it be, then, that the salvation for UK consumers comes from a political angle? With the UK in a constant state of political turbulence, this may seem unlikely right now, but it might just be the case. At this stage, following the turmoil caused by the general election results, there is significant uncertainty around what the UK’s position is on the kind of Brexit that it wants, and we cannot exclude the possibility that the process of withdrawal will hit more snags in future.
Once the UK leaves the EU, roaming charges will again become a national policy matter. Ofcom, the UK regulation and competition authority for communication industries, has previously expressed concern over high roaming charges, but has placed the responsibility of deciding what happens with the government.
Bearing all this in mind, if Theresa May remains committed to wanting the ‘the best deal for Britain’ and negotiating in good faith, it may be rational of her to also remain committed to a policy that has been hailed as ‘a victory for consumers’. If UK citizens are to no longer have access to EU regulations on consumer rights, such as the right to compensation when flights are delayed, then at least allow them to call home cheaply to complain about it. The politics of repealing such a popular and widely publicised policy – one that will also have had two years to embed itself in British culture and become the norm as far as the public is concerned – is likely to be sub-optimal, to say the least.
Ultimately, with over two thirds of European citizens having visited another EU country in 2014, this is a policy that will affect citizens across the entire Union. It is also a policy that shows the EU at its best – when it creates regulations that benefit its citizens. People would do well to remember the many times it has done that.
Armida van Rij is a Research Assistant at the Policy Institute.