(Image Credit: iStockPhoto/BettinaSampl)
The European Union has confirmed that wholesale roaming fees within the EU will be abolished on June 15, 2017. Although the European Commission originally sought an earlier implementation, the date was postponed to secure the backing of both the European Parliament and the Council.
Under the new rules, mobile operators will no longer be able to impose substantial surcharges for using voice, text and data services while travelling across EU member states. The change aims to eliminate the frequent “bill shock” many consumers experienced after returning from trips abroad and using their home mobile plans.
Some operators had already begun reducing or removing their roaming surcharges to stand out from competitors. For example, the UK mobile operator Three launched its “Feel at Home” initiative, which lets customers use their regular allowances in a range of countries without additional charges. That program has extended beyond the EU to destinations such as the United States and Australia.
For expanding operators, competitive roaming offers have been a way to differentiate against larger rivals and grow their customer bases. But once EU-wide roaming fees are eliminated, operators that previously relied on roaming as a competitive advantage will need new strategies to attract and retain subscribers and to monetise services.
Mark Windle, Head of Marketing at OpenCloud, observes that the removal of roaming premiums will further reduce operators’ revenues at a time when market competition has tightened margins. He points out that internet companies and over-the-top (OTT) services like Google and Facebook regularly deliver free, incremental value to users, raising customer expectations for ongoing improvements without extra fees.
Windle argues that mobile operators must adopt a similar approach by developing and adding tangible value to their LTE and communications services. Increasing innovation and delivering free or bundled value-added services could help operators strengthen customer loyalty and differentiate their offerings in a crowded market.
To prepare for the change, operators should begin planning now to reduce dependence on roaming revenue and to counter OTT competitors that often offer monetised services at lower cost. Some interim rules start in April 2016, when caps on roaming charges take effect: a maximum of €0.20 per megabyte of data, €0.06 per SMS and €0.05 per minute for voice calls.
The elimination of roaming charges across Europe represents a significant shift for the industry. While consumers will benefit from predictable, worry-free mobile usage when travelling, operators must accelerate innovation and craft new business models to replace lost roaming income and compete with agile internet-based providers.
Do you think scrapping European roaming fees is a positive step? Share your thoughts in the comments.