EU Imposes Caps on Data and Roaming Charges

EU Imposes Caps on Data and Roaming Charges

The European Parliament has announced that starting July 1, roaming rates for data usage and voice calls within the European Union will be capped. Mobile operators will be barred by law from charging more than €0.70 per megabyte for data. The already-existing €0.35/minute maximum for voice roaming will be reduced to €0.29, and similarly, texting charges will drop from €0.11 to €0.09 per message. These changes are a continuation of the ongoing initiative to lower mobile costs to consumers in the EU; data roaming will fall in stages to €0.45 in 2013 and will reach a minimum of €0.20 in 2014, according to the EP. Voice will be reduced to €0.19 and text messages to €0.06.

The new regulations will also mandate that operators send advance warnings to customers who are approaching €50 in roaming charges, in order to avoid “bill shock.” (Customers traveling outside the EU will also get the warning messages.) In addition, the new rules will allow customers to purchase roaming services from other operators while retaining their original phone numbers, and allow mobile virtual network operators to provide roaming services by accessing the networks of other operators at wholesale prices.

Tarifica’s Take

The EU’s initiative is very consumer-friendly. Roaming prices will come closer to regular voice and data rates, saving a typical business customer around €1,000 a year and the typical tourist around €200 a year. The newly implemented roaming warnings continue the consumer-oriented anti-bill-shock trend.

For mobile operators, on the other hand, the regulations are not so friendly. It appears likely that margins will be squeezed further due to providers losing roaming revenue, which currently accounts for about 5 percent of total service revenue. Over time they may be able to come up with new packages to deal with the roaming changes, but as of July 1 they must simply lower rates on all existing plans. While voice and SMS have already been capped (albeit at higher rates), the data cap is a first and will likely have a significant impact on operators’ bottom line in an increasingly data-driven mobile marketplace. Expanding the ability of customers and MVNOs to purchase roaming services is intended to increase competition among providers, which should place downward pressure on prices, as well.

Other Notable Developments

Microsoft Launches New Tablet

Microsoft unveils a new tablet, called the Surface, to take on the iPad. Equipped with a non-virtual keyboard, it will be competitively priced, according to the company, and represents further evidence of the booming popularity of these devices, as well as the importance mobile customers place on data connections.