The EU’s Roaming Charges: Where Are We Today?

Effective 15 June 2017, the EU New regulations to abolish roaming charges has come into effect. This added enormous pressure to a telecom industry already threatened by slimming margins. It requires players to react quickly to forsake the dangers and realize and act upon new opportunities.

The EU roaming “roam like home” means that you pay the same price as home when travelling in the EU. In practice, your operator simply charges or takes your roaming consumption from the volumes in your domestic mobile plan. These rules also apply when receiving calls or texts while roaming even if the person you are calling is using a different operator.

It’s estimated that operators face an immediate 50-60% drop in EU roaming revenues. This comes at a time in which the industry is facing existing challenges from rapidly changing user behavior.

As operators phase out charges, annual revenues, which amount to $54 billion globally, are expected to fall by 7% in 2017, and by 28% in Europe.

With the higher consuming of Data, roaming was already somewhat abolished. Consumers are relying more on OTT (Over-the-Top) apps and services that reduce the need for minute and text tariffs. Whilst calls and text messaging remain relevant, their importance as a revenue stream is diminishing. In 2015, EE recorded a 10.3% drop in revenues from cellular calling per customer, whilst noting a 50% increase for average data usage.

Data is king and will remain so for the foreseeable future.

The need to offer more data at lower per GB wholesale cost becomes readily apparent. In this scenario, the key to competitive advantage is the ability to offer generous amounts of data without prohibitive usage restrictions or higher tariff costs. Data must be adequately abundant, but sustainable in cost and revenue.

As Data reliance grows, the solutions adapted must take into consideration the file sizes of increased distributed content. However, some are looking into limiting download speeds over the summer of 2017, to lower the impact of increased usage.

Whilst this may appear an attempt to circumvent the cost of increased usage, as users no longer seek to limit their Internet activity during holidays or rely on alternative roaming providers, it is also one of necessity. In fact few operators have the capacity to accommodate roaming usage equal to domestic tariffs whilst also maintaining an acceptable user experience. Such moves, however, harm operators’ brands and damage the customer experience, and do not represent a long-term solution.

So what are Operators doing to satisfy their customers and are they looking into further developing data plans? If not, we advise to do so the earliest! Data will soon be one of the biggest incomes for Operators that will allow them to compensate their roaming losses!

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