The EU cuts roaming charges further while the UK weighs Brexit impact

Andrus Ansip, Vice-President of the EC in charge of Digital Single Market (pictured here), Günther Oettinger, Member of the EC in charge of Digital Economy and Society, and Carlos Moedas, Member of the EC in charge of Research, Science and Innovation, gave a joint press conference on the presentation of the path to digitise European industry. © European Union , 2016 / Source: EC – Audiovisual Service / Photo: Georges Boulougouris.

Since April 30, using a mobile phone within the EU is significantly cheaper for European citizens. Last Saturday, 30 of April, a new interim cap on mobile roaming charges in the European Union came into effect, with cuts the bill up to nearly 75 per cent. The new cost cap is the latest move in the plan to abolish roaming charges throughout the EU completely by 2017. By mid-June next year, Europeans will pay the same price whether they use their mobile devices at home or somewhere else in the EU, although some crucial games are still to be played in the meantime.

Current costs

When travelling in the EU, mobile devices users will only pay a small amount on top of their domestic prices: up to €0.05 per minute of call made, €0.02 per SMS sent, and €0.05 extra per MB of data (excl. VAT). The biggest reductions concern data download, such as emails and social media content, where the roaming charges have been cut by around 75 per cent, with charges for outgoing phone calls being slashed by a similar amount. The charge for texting will be reduced by about 66 per cent.

These rates are the maximum permissible fees and operators are free to offer cheaper deals, the European Commission said. When these fees will be phased out next year, European mobile phone users will pay exactly the same price to make calls, surf the internet and send texts, regardless where they will be in the 28-states bloc.

Reactions

Particularly, European Commission’s Vice President for the Digital Single Market Andrus Ansip said: “We’re in the home stretch now before the end of roaming charges in 2017”. “This is not only about Europeans saving money, this is about bringing down barriers in the Digital Single Market”, he declared. The rules entering into force tomorrow also set the principle of net neutrality rules for the first time in EU law, as explained by the European Commission.

Commissioner Günther Oettinger, European Commissioner for Digital Economy and Society expressed satisfaction for the news, and said roaming charges will be soon “old memories”.”These rules protect the right of every European to access the online content of their choice, without interference or discrimination”, he said. “They will avoid fragmentation in the Single Market, creating legal certainty for businesses and making it easier for them to work across border”, Commissioner Oettinger added.

Benefits with some concerns

Consumer groups also greeted the news. “We welcome the slashing of roaming prices,” said Monique Goyens, head of the European Consumer Organisation. “Today’s consumers do not understand why crossing a border in Europe has to result in soaring phone and internet costs,” she said. However, many analysts are convinced the abolition of roaming charges will prompt mobile operators to raise their domestic prices to compensate lost profits. Matt Howett, a telecoms analyst at Ovum, told Sky News: “I think there is pressure on operators to prevent them raising prices in any meaningful way, but I think we need to realise that we can’t expect prices to fall forever”.

The European Commission, for its part, sees benefits also for the Telecom industry. In its 2015 explainer the Commission said that ending the habit of putting a smartphone “in airplane mode” when abroad would eventually increase data traffic and so generate new opportunities. “Roaming charges currently teach users to switch off their mobile phone when abroad,” the Commission said. “If they are not afraid of their bills anymore, they will use their devices more regularly when they are travelling — this means more opportunities for online businesses and start-ups to provide services to consumers when they travel in the EU.”

Political relevance for a “Brexit”

The removal of roaming charges follows a nine-year campaign by the European Commission to tackle excessive charges and bring savings for consumers, but it gain also a much more political relevance lately. Indeed the topic became a hot one in the UK, as many are weighing the importance of such opportunities ahead of the “Brexit” referendum next month.

UK’s Prime Minister David Cameron quoted the recent news were an example of why Britain is better off in the EU, as explained in prominent UK media outlet such as The Independent. “EU roaming charges now down to near-zero; gone entirely next year,” a tweet from the PM’s official account read. “Consumers are better off remaining in the EU”, Mr. Cameron posted.

“Better deals within the EU”

Indeed the roaming charges cut by the Commission could have a big impact on the Brexit question, as it is expected that Cameron’s wing will use the changes as part of a campaign to show voters that they would be worse off if they voted to leave the EU. UK’s Culture Minister Ed Vaizey, while interviewed by the Telegraph, showcased “the UK’s influence inside the EU to get a better deal for consumers on roaming charges” – as explained by David Cameron – and questioned what would happen to the roaming charge caps should the UK vote to leave the EU.

“The UK has fought for these cuts to roaming charges which will be a huge boost for families going on holiday this summer”, he said. “But these low rates are only guarantees as long as we are in the EU. Brexit risks meaning that these charges will rise again”, he also warned. “A vote to leave could be a vote for increased mobile phone charges on the Continent and could mean that families are stung by large unexpected charges on holiday”, Mr. Vaizey declared.

“Leave” campaigners disagree

Leave.eu, an organisation campaigning for the Leave vote in the upcoming UK referendum, rejected the idea that the savings on roaming charges would be enough to encourage people to vote against Brexit though. “If David Cameron thinks the British public will vote to stay because they’ll save a few quid on their phone bill, he is seriously deluded,” a spokesperson told The Independent last week. “It just shows how much he and the rest of the Europhile elite are out of touch with ordinary voters”.

Pro-Brexit campaigners are in general convinced that if the UK will leave, the European Union will be able anyway to keep the limits, or to negotiate its own deals with telecommunication companies to secure its user good deals. This last view is more likely to be the final one in case of a Brexit, as measures on roaming charges are not specifically incorporated into any UK regulation, and so will leave the country free to act. However, it’s still important to consider that a Brexit will bring by all means an unprecedented shock wave for both the EU and the British economic models, which will leave no side completely untouched.

The end of roaming charges is a key element of the EU’s effort to create a digital union in Europe, a fundamental step for a full development of the telecommunication system in the bloc. Last week’s news represents a step further towards that goal, although looking at June’s referendum is becoming even more important day after day, especially for UK citizens themselves.