European Union: Phone Roaming Charges For Periodic Travel In The European Union To End

Last Updated: December 29 2016
Article by Antitrust Watch

The development of a digital single market is a key objective for the European Union. As Jean-Claude Juncker, President of the European Commission ("EC") said in September, "We need to be connected. Our economy needs it."1 Although this economic policy objective was initiated when the EC published its communication on the Digital Single Market Strategy2 for Europe in 2015, the various proposals it contains need to be formally adopted and implemented in the EU. This process is now underway.

The EU's commitments contained in the Telecoms Single Market Regulation3 of 2015 to end roaming charges for periodic travel in the EU required the EC to adopt rules by 15 December 2016. A transition period—starting from 30 April 2016 to 15 June 2017—has been established to make the abolition of roaming charges sustainable throughout the EU without an increase in domestic prices. On December 8, the EC sent an implementing draft on the end of the roaming charges to the representatives of Member States (via the Communications Committee ("COCOM")). They voted on the text on December 12, and the EC will adopt these new rules regarding the retail market4 in the coming days.

How does roaming currently work in the EU?

Generally, when a person travels to a foreign country and phones, texts or browses with his or her mobile phone and home country SIM card, that person is considered to be "roaming." The person's mobile phone company ("Operator") and the Operator in the country where the person is travelling work together to keep the person connected, so he or she can make and receive mobile phone calls, write text messages and access the Internet.

The home country Operator pays the roaming country Operator at a wholesale roaming price5 when a mobile phone user from the home country uses the roaming Operator's network. Then, the home country Operator charges its customer at its retail roaming prices.

In this way, the wholesale prices have an impact on consumers' final bills. It is for this reason that the EC has worked to limit these wholesale prices in the EU in parallel with its work to directly limit retail prices.

The "roaming like at home" in the EU

EC proposes that Operators should offer their roaming services at domestic prices—retail prices—to consumers who either normally reside in or have a stable link to the Member State of the Operator while those customers are periodically travelling in the EU.

In those circumstances, a consumer will be able to use his or her mobile device with a SIM card from a home Member State (for mobile calls, SMS or data), in any other EU country, just as he or she would at home. A home Member State comprises the country of residence or with which the consumer has stable links.6

This mechanism is called "roaming like at home."

Anticipated & direct consequences for Operators

There are several anticipated consequences for Operators of mobile systems.

First, the EC introduced a "fair use" rule that Operators can use to prevent abusive or anomalous usage of the system.

Without implementing over-intrusive checking, Operators are allowed to use the information they already gather for billing purposes to check the extent to which customers are using mobile and data services abroad compared to their consumption at home. If the "roaming like at home" mechanism is abused, Operators will have to alert their users. Nonetheless, the EC proposes a four-month period of observation before Operators can identify a risk of abusive roaming use and send a warning message. This message will warn the consumers that they have two weeks to inform their Operator about their travel situation or to change their travel or use patterns.

Only if these conditions are met, Operators will be able to apply small surcharges that cannot be more than the maximum regulated wholesale roaming charges7 at €0.04/min, €0.01/SMS and €0.0085/MB (reducing by 20%, 50% and 83% respectively, compared to the current caps). The Operator must have complaint procedures in place in the case of customer disagreement. If the dispute persists, the customer may complain before the national regulatory authority, which will decide the case.

Second, abuses could also be related to the mass purchase and resale of SIM cards for permanent use outside the country of the Operator issuing them. In such cases, the Operator will be allowed to take immediate and proportionate measures (e.g., suspension of service on the basis of breach of contractual conditions) while informing the national regulator.

Third, this new regulation will also force Operators to adapt their business models and internal procedures. Even if no formal registration will be required, Operators will have to include in their contracts a clause specifying the "roaming like at home" rules.

Will these new rules also be "profitable" for Operators?

The EC observed that in the north and east of Europe, where domestic prices are low, Operators do not want to pay Operators in countries where their customers travel more than they can recover with their domestic revenues. On the other hand, Operators in countries that host a lot of tourists, like Spain, Greece and France, have an interest in being paid higher prices to be compensated for the important use of their networks. Accordingly, it seems that Operators—particularly in France, Spain or Greece—would have an interest in and grounds to claim before the national regulator an exceptional and temporary derogation system, under strict circumstances, when the end of roaming charges leads to negative effects on consumers in a specific market.

To conclude, the new regulations mean that Operators will not be able to increase their domestic prices, will have to apply the "roaming like at home rules," will have to study the consumer behavior without over-intrusive checking and will have to impose lower maximum roaming charges.

Footnotes

1 Speech of Jean-Claude Juncker, 14 September 2016, State of Union 2016.

2 Communication of the EC, 6 May 2015, on Digital Single Market Strategy for Europe.

3 Regulation n° 2015/2120, 25 November 2015, laying down measures concerning open Internet access.

4 This includes prices Operators charge for mobile calls, SMS or data whether the customer travels away from his or her country of residence or with which they have stable links.

5 This includes the prices Operators charge each other to allow roaming across Europe on each other's networks.

6 EU Press Release, "End of roaming charges: Commission determined to make it work," 8 December 2016. The EC defines "stable links" with a country in order to ensure that people without officially residing, such as frontier workers, posted workers, students and retirees, can benefit from offers in the country where they work, study or spend substantial time.

7 Id. The European Parliament and the Council of Ministers in charge of Telecoms are finalizing their negotiations on regulation of the wholesale roaming market.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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