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No such thing as a free roam in Europe

Zulfikar AbbanyMarch 6, 2015

This was going to be a big year for Europe: an end to roaming charges (no worries texting at the beach), net neutrality, and new rules on data protection. Well, looks like we can forget the first of those.

Frau mit Handy am Strand
Image: Fotolia/Maxim Malevich

The European Commission is good for mantras. One of its favorite of the past few years has been that we need to end roaming charges in Europe by 2015.

Banning roaming charges is seen by some as a vital - however symbolic, still economic - step towards the creation of a Digital Single Market. The idea being, it would break down digital barriers across the European Union, allowing consumers to use their mobile phones, tablets and other networked technology at home and away, as freely as they are able to travel throughout the 28 member zone.

However, in a move that threatens to throw the Commission's long-held goals into disarray, a majority of those 28 member states in the European Council have voted in favor of maintaining roaming charges for at least another three years - until 2018.

"Obviously, it does not meet the ambition and the expectations we had," says Vesa Terävä, head of unit at the European Commission's DG Connect. "We have to keep in mind this is not the end of the process - this is the starting point for the negotiations between the European parliament, the Council, and the Commission in the coming weeks."

But this was supposed to be the year - the year that roaming charges end for good.

"It's almost 10 years that we've seen - every year - a reduction in roaming charges, so telecom operators have been warned they need to revise their business plans," says Monique Goyens, director general of the European Consumer Organization, BEUC. "It's a mandatory trend. You cannot justify in a single market, in the long-term, roaming."

Vesa Terävä, head of unit, DG Connect, European Commission
Terävä: We may need to accept that we need a transitional periodImage: European Commission

And, yet, the Council seems to have found a way.

Proposed pricing mechanism

The European Council has proposed an alternative that, "within certain limits to be determined," would allow consumers to make and receive calls, send text messages and use data services without extra charge on top of their domestic fees.

But here's the rub: "Once this basic roaming allowance is used up," a public statement continues, "the operator may charge a fee, but this fee will be much lower than current charges."

"The basic roaming allowance as the Council has defined it is very, very small. In particular, the 5MB of data is something you'll consume very quickly," says Terävä. "It does not give roaming customers a 'roam like at home' experience as we wanted to achieve. We may need to accept that we need a transitional period [perhaps until 2017]."

Operators argue they have separate telecoms infrastructure to maintain and expand within the individual countries of the EU - rather than a single, pan-European network - and this brings a range of costs.

"We want a single market, but we need to get there by pushing forward all the levels of harmonization," says Alessandro Gropelli, spokesman for the European Telecommunications Network Operators' Association (ETNO), which since Daniel Pataki's recent departure is without a director-general.

Monique Goyens, BEUC
Monique Goyens: Roaming, net neutrality and data privacy are all under fireImage: BEUC

"One of them is roaming," says Gropelli, "that's the most visible to consumers and possibly the most relevant from a political viewpoint, because it impacts on [people's money]. But if we're serious about digitizing Europe, we also need to look at the infrastructure. A big operator, with operations in more than 10 European countries, does not have one single network. It has [many] networks across Europe."

Bad for competition

Goyens says the Council's vote to keep roaming charges fails consumers, and may even harm the market.

"It's just a question about political will of the member states not to listen to the incumbent telecom operators, but to go for the benefit of the people, and of competition," says Goyens, "because if you get rid of roaming, you open up more competition on the telecoms market."

"I agree," says Gropelli, "and companies are proposing packages which until five years ago would have been unthinkable. That said, an industry also has to function on the supply-side. So what about spectrum? Do you think the price of spectrum, which is the life-blood of the smartphone revolution, is the same in Germany, in Malta and in Warsaw? Other macro-economic conditions are the same - a coffee in Malta and a coffee in Budapest is not the same price."

A 'go-slow' policy?

The European Council's decision comes soon after a landmark decision on net neutrality in the United States.

After apparently successful calls from President Barack Obama, the Federal Communications Commission (FCC) voted on February 26 to recognize the Internet as a public utility. It can now be regulated under "Title II" provisions, making people's right to access the Internet the same as their right to access water and electricity.

Alessandro Gropelli, ETNO
Gropelli: Charges for data roaming have decreased by 70 percent since July 2012Image: ETNO

It will have clear ramifications for telecoms operators - and will be closely watched by European legislators and regulators.

The two issues are separate, albeit related. And a more cynical mind may suggest a similar win on net neutrality in Europe could be used to negotiate a "go-slow" policy on roaming charges.

"The net neutrality debate in Europe and in the US is coming to maturity at the same time," says Gropelli. "And when the Council approved their common position on roaming, they also approved their common position on net neutrality. But they are such different topics that I cannot see a link between the two, if not a political one, but that doesn't concern the industry."

Likewise, Goyens rejects the suggestion that net neutrality and roaming can be bargained against each other. But she acknowledges there is a political dimension.

"Roaming, net neutrality, and data privacy are all under fire," says Goyens. "And we should not give up, or negotiate, on these elements. They are fundamental in terms of the functioning of the market, and of trust of consumers."