Data Roaming

Political agreement has been reached between the European institutions (Council of Ministers, the Commission and the European Parliament) on the final text of the revised  roaming regulation that was first proposed in 2011. You can follow this link to get a copy of the current text as amended in 2009).

The new regulation will replace the original 2007 regulation on roaming on public mobile telephone networks within the Community. This set ceilings on the amounts that users could be charged for voice and text messages when travelling within Europe. The current maximum rates are 35 cents to make (and 11 to receive) a voice call and 11 cents to send a text message (free to receive). The 2007 regulation had no provision for data charges relating to Internet and email use although an amending Regulation adopted in 2009 set ceilings on the maximum wholesale data charges that operators could levy between themselves. Further amendments introduced following a number of well publicised cases of consumers receiving extremely high bills for such services required networks to set a ceiling of €60 (now to be reduced to €50) as the maximum charge a user might face in respect of data roaming – in the absence of contrary explicit agreement between the parties. Effectively further access would be blocked once the €60 figure was reached unless the consumer agreed to accept liability for further charges.

A Commissionreview of the working of the regulation was published in 2011 and was critical of a number of aspects of the working of the original regulation. In particular it was claimed that savings achieved by networks in the form of lower wholesale charges for data had not been passed on to consumers. In some cases, it was reported, retail rates were 7 times higher than wholesale charges. It was also found that there was only limited competition in the field and that roaming charges by all operators clustered around the ceiling levels.

From summer 2012, the revised regulation will reduce the voice and text charges still further and set also a ceiling on the charges which may be imposed for data roaming. From summer 2012 this will be 29 cents a minute for voice (8 cents to receive a call), 9 cents to send a text message  and 70 cents per megabyte to download data.  Data is to be charged on a per kilobyte basis. Further reductions are mandated with the result that by 2014 maximum charges will be reduced to 19 cents a minute to make a call (5 to receive), 6 cents to send a text message and 20 cents a megabyte for data. To put the latter figure into perspective, I have recently returned from a trip to Tanzania where the data roaming cost was notified as being £6 (almost €8) per megabyte.  A 2 hour movie will typically be about 1gigabyte in size so downloading one on the Tanzanian roaming basis would cost about £6,000. Rather more than my air fare and hotel bill combined.

Even with the much lower charges planned in Europe for 2014, downloading movies when roaming will not be a cheap exercise with a gigabyte of data costing some €200. In an effort to establish more competitive markets the new Regulation aims to make it easier for consumers to bypass the roaming arrangements made by their home network and deal directly with other networks either in their own country or in in the countries that they are visiting. This provision will take effect in 2014 It has, of course, always been possible for consumers to enter directly into agreements with foreign networks although this has entailed the use of multiple SIM cards and telephone numbers. The regulation provides that consumers are to be enabled to retain their existing number when making such a switch.

Under the current Regulation, only mobile network operators are given the automatic right to conclude access agreements with each other. This means that, so called, virtual mobile networks such as those offered by supermarkets such as Tesco, are largely dependent on their host network provider, O2 in the case of Tesco. Under the new Regulation, virtual networks will also have the opportunity to conclude access agreements. This could result in a significant increase in the number of providers seeking agreements although experience under the current Regulation perhaps justifies a degree of scepticism as to whether there will be greater competition at the retail price level.

The new Regulation has not been well received by some mobile networks with suggestions that it amounts to excessive regulatory interference in a sector that is generally regarded as being highly competitive. In a speechat the World Mobile Congress in Madrid Vittorio Calao, chief executive officer of Vodafone, argued that:

Regulators should stop cutting mobile termination rates, pushing down roaming prices, building funny auctions which are designed to extract more money from existing operators, and resisting industry consolidation.

This is not a request for a moratorium on competition but a much stronger request for a moratorium on regulation.

Just as the mobile networks pleaded for a reduction in the level of regulation, there have been reports that the European Commission have started investigations into possible anti-competitivecollaboration between networks. I suspect this story may have a way to run but there is a difficult relationship between networks needing to cooperate in order to ensure global connectivity, the legitimate presentation of policy views shared at an industry level and potentially illegitimate levels of exchanges of information. This may be one to watch.