Tuesday

23rd May 2017

Analysis

Roaming exceptions are necessary evil in imperfect EU

  • Commission: 'If you buy a SIM card in another member state with lower prices and you use it permanently in your member state, you are not roaming anymore' (Photo: Matteo Garza)

The centre-left socialist group in the European Parliament on Tuesday (6 September) appeared to accuse the European Commission on reneging on its promise to abolish mobile roaming surcharges.

In a message sent out a social media, they called a commission proposal, saying that roaming will be limited to 90 days a year, “complete nonsense”.

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The truth however is somewhat more nuanced.

What happened?

In June 2015, EU officials from the commission, parliament, and member states, announced that they had reached a deal that would end roaming fees, something which they had promised years before.

However, the deal also included the possibility for telecommunications operators to introduce “fair use policies”, to prevent people from abusing the roam-like-at-home principle. Those consumers that go beyond a mobile subscription's fair use, could face additional costs.

On Monday, the commission published a proposal that contained the details of what such policies may look like.

“What we have done is fix some rules to avoid abuses,” commission spokeswoman Nathalie Vandystadt told journalists on Tuesday. The rules theoretically can still be vetoed by the EU parliament or member states.

She explained that 90 days is the “minimum … during which users fully benefit from the end of roaming charges”.

Consumers that use roaming beyond that period may face additional costs, which critics call roaming by another name.

But commission deputy chief spokesman Alexander Winterstein was quick to say the EU had fulfilled its promise on roaming.

“What we have promised is that when we travel across borders, they can take their phone with them and as of June next year they will not pay roaming fees anymore. This is a key message and this is what we have delivered, and this is what counts,” Winterstein said.

The GSM Association, the pan-European organisation set up in the 1980s to create standards for mobile communication, never defined roaming as having a limited duration.

But for the commission, it is understandable why it would want to make that distinction.

With the end of roaming fees a tangible example of the benefits of the EU, the commission is, not surprisingly, eager to hail it as a success story.

And as Vandystadt noted, most Europeans do not travel abroad to other EU countries for more than 90 days a year - or even half of that.

“Operators are not obliged to impose this 90 days minimum. They can offer unlimited packages including roaming,” Vandystadt added.

But some operators may not want to offer unlimited roaming, out of fear of going out of business.

The problem which the 90-days clause aims to address, goes far beyond the simple frame of whether the EU broke a political promise.

Digital single market?

It showed that the EU is still very far from a digital single market.

When you buy a book in another EU country, your one-time purchase does not greatly affect the local economy. But when you buy a mobile phone subscription in another EU country with the idea of using it in your home country, you may have a more lasting effect.

The text accompanying the fair use rules noted that there are “different pricing and consumption patterns” across EU member states.

“In such cases, the incentive to use very large volumes of traffic at domestic price levels while roaming on a permanent basis may increase, as the price differential vis-à-vis limited domestic offers may turn out to be greater than average.”

Put simply, citizens living in a rich member state may choose to buy a SIM card in a member state where the cost of products is much lower.

Let's take, as an example, Lithuania and the United Kingdom. According to Eurostat, communication is most expensive in the UK, and cheapest in Lithuania.

If substantial numbers of British consumers were all to buy SIM cards in much smaller Lithuania, and then go home to the UK demanding to use the cheaper subscription plan there, the mobile operators in Lithuania may decide to increase their prices, which would mostly affect Lithuanians.

European integration

It is one of the key challenges in European integration.

Politicians have started opening up markets for all EU citizens, before differences between the economies of EU member states and purchasing power have dissolved.

The option for mobile operators to apply an exception to the roaming ban, is a way to protect businesses in EU member states with lower purchase power.

It is not “complete nonsense”, but an unavoidable stopgap for the much bigger, systemic tasks policymakers face during the messy process of European integration.

EU redoubles attack on roaming charges

After an embarrassing U-turn last week, the EU commission has proposed to abolish roaming charges by June next year. Only "abusive" clients to pay.

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