Neelie KROES
Vice-President of the European Commission

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Roaming in the EU: a new approach to tackle the root of roaming rip-offs

You're probably aware that when you travel abroad with your mobile, you pay higher tariffs – as a result of "roaming" charges which apply when you're texting, making and receiving calls, or downloading data on a smartphone. We've known for some time that these roaming prices can be very high. That means a poor deal for the ordinary mobile user. And it means that people are deterred from using their mobile abroad – which is a shame, as a mobile is supposed to be… well…. mobile. So we've been looking very closely into this market. My conclusion is that the root cause of high prices is a lack of competition. That means that operators can continue to charge outrageous margins, with significant mark-ups for crossing from one EU country to another – even though these internal borders are not supposed to exist any more. Until now, we've addressed the problem with price caps on roaming charges. But these don't address the underlying problems of the market. So today I've proposed a whole new approach to the EU market – structural, durable, fundamentally new: we will introduce competition. You will have the right to choose a cheaper "roaming operator" to provide roaming services separately from whoever provides your domestic service – so that you can shop around for the best deal. And to ensure that competitive roaming offers are out there, alternative operators would have to be given network access at regulated wholesale prices. Until those measures come fully into effect, we'll maintain the safety net of price caps on roaming charges, and will bring them down progressively. This includes a new cap for data roaming which will come down to 50 cents per MB by 2014. But competition will also bring prices down, and substantially below the level of the caps. Formally, this is an EU Commission proposal for a Regulation – which can only take effect if agreed by both the Council of Ministers from all of the Member States, and also by the European Parliament. So I look forward to debating constructively with them. UPDATE: you can now view online the legal proposals themselves.
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Marco's picture

While I see that pushing more competition will drive prices, there is an issue from a user perspective with your proposal. Who would want to select a different provider each time you go abroad? Cumbersome. How does the user get the information? Etc? And what about initiatives by for instance Vodafone that offer a "package" to their customers to roam for local prices while being on a partner network.. I think those package prices could go down a bit, but the proposed solution seems reasonable. Why would I then as a vodafone customer select a different, maybe slightly cheaper one? Regarding the wholesale ideas. Have more choices, make it possible for "small" virtual providers to use the network. Sounds good, but that will make the current operators nothing more than a bitpipe.. and how are they going to innovate then?
Nick Wright's picture

Hi Marco, you make some good points - especially around how effective the new pro-competitive measures will be in reality when coming up against consumer confusion and percieved hassle in temporarily switching networks. This is a significant barrier and I'm also really doubtful whether the practicalities won't end up limiting this scheme from being 100% effective. Not sure how much thought has gone into realisation of this idea by the EU so far. I guess in some ways they have 3 years to figure it out though... However, I think your point about Vodafone is an outlier, as not all networks have this arrangement - or only a limited version of it. Plus - Vodafone's own scheme has its limitations - there's a 75p connection surcharge for each call made, making it a very inefficient package for customers who make multiple calls. Finally, I think your point about current operators becoming bitpipes due to lack of incentives for innovation is very wide of the mark. First of all, what's stopping them from innovating now - with profit margins sky-high? Secondly, if they're not innovating, reason says that added competition should force them to do so - the current situation is kind of like an enforced "monopoly" on the customer during their occasional tips abroad. Thirdly, what's wrong with them being a bitpipe? At least they can be a bitpipe that isn't overcharging customers and making excessive profit. In my view this is very sensible legislation on the whole that is genuinely protecting customers from exploitation by networks who have had an easy ride so far. Sure it will have it's teething difficulties but I for one hope this encourages networks NOT to raise prices at home but instead to see this as an opportunity to broaden their market penetration of roaming service used by their customers. ie. lower prices means more people using the services and thus an increase in overall industry roaming revenue DESPITE falling prices.

Sounds good to me. When you cross the border you get text messages of operators competing for your business: the cheapest one wins.  Good work Europe!

Obviously the EU intends to establish firm long-term roaming providers rather than letting consumers chose a provider or tariff everytime they enter another EU country. This would slow down competition as consumers would face paperwork in order to switch providers and this would also discriminate against the late market entrants who don't run cross-border networks and so have higher prime costs when buying airtime from foreign operators. So in the end it would be only the large transnational carriers who could offer competitive roaming tariffs - mainly realized through their very own networks at almost zero costs. The idea of liberalizing/separating the roaming market will only bring the desired dynamics if consumers can actually act dynamically - i.e. being able to chose another operator upon each entry of another EU country. In the currently proposed form such regulation would hinder smaller operators, who lack the required resources and buying conditions for offering an EU-wide roaming product, from participating in this market, allthough they could probably cut prices most of all.So Mrs Kroes, please reconsider your approach of firm roaming providers in favour of a highly dynamic solution, where consumers can switch providers from their handset on a daily basis.
Blog Admin's picture

Thanks for the comments! Note that, under the proposal, you wouldn't have to select a roaming provider each time you cross a border. Rather, you would pre-select a roaming provider contract, in addition to your domestic provider. The roaming services would "kick in" when your phone detected you have crossed a border. By the way, there are some FAQs on the proposal available here.
Marijn de Jong's picture

Great work, my Dutch phone provider tries to charge me € 5,95 per megabyte when I cross the border with Belgium!
Cédric's picture

Nice proposition. We're going the right way, but it's clearly not sufficient! What will happen if operators don't want to play the game and prefer sticking with their good old roaming prices? In the end, as long as noone pushes them, they have absolutely no reason to drop roaming! Some food for thought: http://bit.ly/oYvbGw
Blog Admin's picture

If there is real competition in the market, then people will select the roaming provider who offers them the best deal. Operators who stick to high prices won't sell any roaming contracts.
Darius's picture

Dear President Kroes, I am really sorry, but there is no roaming at all in mobile Internet access while abroad (data transfer). Mobile telephony towers act exactly as Access Points in case of WiFi and there is no need for any data to be roamed to native country, since BTS - mobile telephony towers are directly connected via fiver to the Internet, so transferred data (Internet) are not roamed, being directly routed via local BTS tower. So in case of 3G Internet access abroad, there is no roaming at all, so charging foreigners roaming charges for mobile Internet access 3G has no legal ground, since data are not roamed.   I am available on Twitter for more comments and details on Free-Roaming Europe Project   Twitter @GM2DBW    

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