The end of roaming charges in the European Union: a cure-all solution?

Patrick Maillé, IMT Atlantique – Institut Mines-Télécom (IMT) and Bruno Tuffin, Inria

The European Union has required wireless network operators to stop charging roaming fees during trips to other EU countries. For nomad users who regularly travel throughout Europe, this added comfort is truly appreciated: no more fears of additional charges.  However, while the benefit is real, some questions about roaming costs remain.

Respecting European unity

Before the end of roaming fees in June 2017, the operator of your mobile plan allowed you to communicate within your country and allowed a maximum amount of internet data you could consume (once depleted, you would either be charged additional fees, or your service would be restricted). Any travel outside your country of origin involved an additional flat-rate fee or charges based on volume. This situation limited communication and went against the European spirit of unity. To remedy this, in October 2016, the European Commission approved a law prohibiting operators from charging their users for communications and data usage while traveling abroad.

The goal of this decision was clearly established: create a single open market for electronic communications. Now when you travel, your usage will be charged to your plan exactly as it is in your country of origin. This means no more fears of extra fees, including for data usage: no need to wait to find WIFI access to use data, 3G and 4G networks can now be used without resulting in bad surprises. This new system required agreements to be made between the different operators and countries that are transparent for users in order to locate mobile phones and direct communications.

To prevent any unfair competition within the EU and prevent citizens from choosing a plan from the least expensive country, the rule was established that users must take out a plan in their own country, which is defined as the country where they spend the most time. In addition, roaming usage must be “reasonable”.

Completely free roaming?

As mentioned, “free” roaming is guaranteed by the law only “within a reasonable limit of use”. Specifically, operators can set a roaming limit for mobile internet usage without additional fees in order to prevent usage and associated costs from rocketing. However, this limit must be controlled by the regulation and the user must be clearly informed. The framework for this application is therefore not necessarily the same abroad as in the user’s country. In addition, the roaming rules only apply to services within the European Economic Area (EEA); therefore your plan may include services intended for countries outside the EEA which will only apply if you are in your country of origin.

It is also worth noting that there is still a missing step to truly achieving a single market and real freedom within the EU. In general, calling another EU country from your own country is not including in your mobile plan and incurs additional costs, so there is a distinction that is made within the European Community. Similarly, if you make a call while traveling, the call is not counted within your plan, but is charged as if you were calling from your country of origin, which could potentially be outside your plan, and yet it would be natural to be able to call to make a reservation at a restaurant without paying extra fees.

Therefore, integrating these additional aspects, in other words no longer differentiating between a call from or to another EU country, could be the final step towards achieving a fully open market perceived by users as a single market.

A risk of rising rates?

Another aspect to monitor is how this new rule will impact the rates of users’ plans: is there a risk that this will lead to a rise in prices, as an averaging effect in which those who rarely travel will have to pay for those who travel frequently? This potential risk was brought to light in scientific publications through theoretical modeling and game theory. The operator’s income could also decrease. It is still too soon since the application of this new regulation to effectively assess its impact, yet all these reasons clearly show that we will need to pay special attention to how prices change.

To learn more :
– P. Maillé and B. Tuffin (2017) « Enforcing free roaming among UE countries : an economic analysis »,  13^th International Conference on Network and Service Management (CNSM), Tokyo, Japan, Presses de Sciences Po.
– P. Maillé and B. Tuffin (2017), « How does imposing free roaming in EU impact users and ISPs’ relations ? », 8^th International Conference Network of the Future, London, UK.

Patrick Maillé, Professor, IMT Atlantique – Institut Mines-Télécom (IMT) and Bruno Tuffin, Director of Research, Inria

The original version of this article (in French)  The Conversation