Earlier this week, the EU parliament reported that they have reached an agreement with the European council on the final piece of the puzzle for the abolishment of roaming charges in the EU by mid-June this year: Wholesale prices. This is good news and it’s interesting to take a closer look on the compromise that was reached.
Back in September last year I posted an analysis of who pays whom and for what even when EU roaming charges are finally gone for the consumer. While consumers will no longer pay extra for roaming, network operators still charge each other for delivering calls and data to and from user roaming outside their home country. These charges are referred to as wholesale charges and this Wikipedia page has a great table that shows how the maximum regulated price for voice, SMS and data wholesale has changed over the years.
It is important to note that these are the maximum prices. Due to competition between different network operators in a country for wholesale roaming charges from foreign operators it can be imagined that practical prices are lower in many cases. But in some cases there might be little competition so a cap on wholesale charges protects everyone in the business. The question now is whether the compromise that has been reached between the EU parliament and council is good or bad.
At the moment the wholesale cap for data is still at 5 cents per MB or 50 euros per GB, which is ridiculously high compared to prices network operators charge to their customers today. The parliament and council have not compromised on a wholesale price of 7.70 euros per GB in beginning in June 2017 which is then gradually reduced to 6 euros in January 2018 and then step by step to €2.50 in 2022.
The 7.70 euros is much higher than originally proposed by the parliament and only little away from the 8.50 euros proposed by the Slovakian EU presidency at the end of last year. This is good news for network operators which have an expensive and powerful network built in their country but obviously not so good news for network operators with ‘weaker’ networks that sell their services to consumers for much less.
In the course of 2016 I have noticed that a lot of network operators in countries such as the Netherlands, Germany and Norway have started offering tariffs that include EU-wide data roaming for all volume included int he contract. I even noticed a competitive prepaid package for roaming as well. These offers all came from ‘high-price’ network operators and even at a time when the wholesale price was still at a theoretical €50 per Gigabyte. So I think the vast majority of network operators will be able to cope well with the compromise reached this week.
Personally, I’ve already had a contract for a full year now which includes EU wide data and voice calls to and from anywhere to anywhere including mobile networks anywhere in the EU and I’ve enjoyed the freedom and ease of use very much. I can hardly wait until my friends will follow before the summer vacation period starts. They still won’t be able to make calls that are included in their monthly package to anywhere in the EU from home or when abroad but in the day and age of alternative Internet based voice services that’s not going to be a huge issue. This is rather a (self inflicted) problem for mobile network operators from my point of view as this is not a strategy that helps to keep their voice telephony service relevant in the future…