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11/12/2016

EU considers concession to telecom firms to end roaming charges

Digital

EU considers concession to telecom firms to end roaming charges

MEPs call it a day on roaming charges.

[European Parliament / Flickr]

Mobile telecoms operators across Europe could be allowed to charge each other higher fees for keeping customers connected when they travel abroad, under a Spanish proposal to help firms recoup their costs when roaming charges are abolished.

The European Union has committed to letting its 500 million citizens use their phones while travelling abroad within Europe without incurring cross-border roaming charges from June 2017.

But the network operating companies will still face costs in the form of the wholesale charges they pay to foreign operators to let their customers use their networks.

European member states are split as to where the cap on wholesale roaming charges should be set to avoid operators raising their domestic prices to recover lost revenues.

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On Wednesday, deputy EU ambassadors will attempt to break the stalemate and discuss a provision, originally proposed by Spain, that would allow operators hosting EU tourists on their networks to ask their regulators for permission to charge more than the wholesale cap. This would apply in exceptional circumstances, if they are unable to recover their costs.

Slovakia, which is chairing the discussions as holder of the rotating EU presidency, has proposed limiting the surcharge that can be levied so the final amount does not exceed €8.50 per gigabyte, according to a draft seen by Reuters.

Under the proposal, wholesale data caps would be progressively cut from €10.50 per gigabyte to €6.50 from June 2021, meaning that operators would only have an incentive to levy a surcharge from 2020 onwards, when the wholesale cap dips below €8.50 per gigabyte.

The so-called sustainability mechanism faces opposition from states pushing for low wholesale caps to ensure their operators are not forced to hike retail prices or stop offering roaming altogether.

One diplomatic source said the sustainability proposal would not affect the end of retail roaming charges for consumers, which is set to come into force on 15 June, as it dealt only with payments made between the operating companies.

The only way to accept the Spanish proposal would be to lower the wholesale caps significantly, another diplomat said.

A European Commission source said the wholesale data caps originally proposed by the EU executive meant there was “no need for a derogation at wholesale level as our proposal aims at fully covering the costs”.

The Commission had proposed a wholesale data cap of €0.85 per megabyte, or €8.50 per gigabyte.

EU-wide cap elusive

Big differences in domestic prices make an EU-wide wholesale cap that suits all 28 member states elusive.

In the north and east of Europe, where domestic prices are low and packages relatively generous, operators fear that if wholesale prices are not brought down enough they will be forced to either raise prices at home or stop offering roaming.

But tourist destinations such as Spain, Greece and Portugal say the wholesale rates need to be high enough to allow their operators to recover the cost of hosting so many travellers on their networks, otherwise they too may need to raise prices.

Under the Spanish proposal, the national regulator would have to decide if the company is “cost efficient” before granting it permission to levy a surcharge on other operators. The extra charge could only be levied for up to one year and “only to the extent necessary to recover the costs”.

After botched first attempt, Commission proposes new roaming bill with no time limit

In a bid to save face after a wave of outrage following a botched first attempt earlier this month, the European Commission proposed a new bill today (22 September) to get rid of mobile roaming charges by next year.

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Background

The European Commission proposed a new bill on 21 September to get rid of mobile roaming charges by June 2017.

The EU executive defended the new bill, which will not limit the number of days that consumers can travel and still use their mobile phones without roaming charges. Telecoms companies can monitor consumers to make sure they don’t abuse their roaming rights.

A first draft bill proposed limiting roaming without extra fees for 90 days per year. But it was withdrawn after it ran into criticism by consumer groups who were outraged by the proposed limit.

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European Commission head Jean-Claude Juncker on Friday ordered officials to draw up new plans for the EU's landmark free mobile phone roaming policy after it ran into fierce criticism.

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