Mobile roaming revenues are expected to decline in Europe by 28 percent in 2017 as new EU regulations go into effect, according to a study. The annual revenues, worth an estimated US $52 billion in 2017, will fall by 7 percent globally but drop by 28 percent in Europe as operators phase out premiums for international calls, text and data while roaming within the EU. The study noted however that roaming revenues will recover in the medium term as the lower prices of calls and data within EU countries will remove consumer barriers to using mobiles abroad, resulting in a significant increase in active roamers. The study also observed that outside Europe, tariffs will continue to be unregulated and significantly higher. In those markets, however, operators will still face a sizable base of customers who either switch off roaming services altogether or use alternative services such as Wi-Fi or local SIMs. The reduction in retail data roaming costs in Europe means that North America and the Far East will account for the highest proportion of the global mobile data roaming revenue by 2017.

Tarifica’s Take

The EU’s decision, after much wrangling and several reversals, to abolish roaming surcharges beginning 15 June 2017, will have an important impact on mobile operators’ business—and not necessarily all for the worse. As the study at hand indicates, in the near term the regulatory changes will decrease revenue from calls made outside customers’ home countries, as the elimination of premiums takes effect. However, in the longer term, the effect of the elimination of surcharges will be to stimulate demand for roaming calls. It stands to reason that once customers have been granted the prices they had been demanding, they will actually pay them, driving revenue once again to MNOs. In most of the rest of the world’s markets, operators will continue to take in revenue from roaming fees well past 2017, but the other side of the coin is that they have to contend with that revenue being eroded by workarounds such as Wi-Fi and local SIM cards. But if European operators continue to prosper from roaming usage even after the end of the old surcharge system, that may encourage operators in other markets to end roaming, as well.