What has been the effect of the EC's decision to abolish roaming charges for customers traveling outside their domestic markets?

Mikaël Schachne, VP Mobile Data Business

July 24, 2018

4 Min Read
Roam Like at Home: The Impact After One Year

Last summer, the European Commission's "Roam Like at Home" (RLAH) ruling was celebrated by mobile subscribers across Europe, allowing vast numbers to escape "bill shock" and enjoy their usual mobile plans while traveling in the EU.

Subscribers had reason to rejoice again this year, with the EC introducing rules on content portability that allow those in member states to access online content services they have subscribed to while on the move in the EU. These include paid-for film, TV and music streaming accounts like Netflix Inc. (Nasdaq: NFLX), Amazon.com Inc. (Nasdaq: AMZN) and Spotify -- which are fast becoming the preferred means of media consumption for many.

So, one year on from the abolition of roaming charges -- and months into the new content portability ruling -- what does the landscape look like for EU operators, and the telecom industry more generally? Is there sufficient realization of the benefits of RLAH among consumers to boost loyalty and reduce churn? And will the EC's pioneering approach impact decisions made by governing bodies in other regions?

One thing we can be certain about is the impact RLAH has had on mobile traffic. The summer of 2017 -- following the June announcement -- saw a 600% to 800% increase in LTE data roaming traffic in the EU compared with 2016. From a consumer standpoint, then, RLAH has been a profound success. As subscriber confidence grows and the knowledge of the ruling becomes more widespread, we can expect further traffic increases at the close of this summer.

Conversely, sentiment among operators in the wake of the ruling was less positive. A loss on the tariff side combined with a surge in traffic was, understandably, a difficult pill for operators to swallow. Fears of damaged revenues prompted some discussion of telco cost-cutting in other areas, and raised the prospect of higher roaming tariffs in non-EU countries, to balance the books. However, such drastic scenarios have not played out.

Instead, positive consumer feeling has likely helped fuel consumer loyalty, offering operators the perfect opportunity to create tailored experiences and upsell services to a more receptive user base. These include identifying silent roamers who, unaware of RLAH, continue to put their phones on "flight mode" or use only WiFi services when traveling. Telcos have the chance to actively engage with these silent roamers, by identifying their preferred services and usage, and offering personalized roaming bundles that encourage them to keep their phones switched on and connected to the mobile network. Visibility of data consumption is vital here -- operators should allow more cautious roamers to set daily usage caps and provide real-time notifications to instil confidence.

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Many European consumers are now enjoying low-cost, high-quality connectivity across the European Union. This is likely to be noticed by device users in other countries, or indeed those visiting the EU from other regions.

Already, a number of operators have started including countries that are not covered by RLAH in their own tariffs. Switzerland, Monaco, Jersey, Guernsey and the Isle of Man are outside the European Economic Area, and, while some operators have increased charges for subscribers roaming in these countries (often unbeknownst to subscribers), others have bundled them into their RLAH offerings, cutting complexity -- and costs -- for end users.

The European Commission's legislation may very well act as a wake-up call to other service providers, signaling a potential end to hefty roaming charges globally. China is already making moves: in October 2017 its three major telecom operators abolished domestic roaming fees for long-distance calls, in line with the government's plan to support mobile Internet services for business growth and boost the development of a "Digital China."

Roaming agreements and roaming charges can be complex and opaque, and so we shouldn't be surprised to see further legislative changes that aim to address this. Decisions on roaming will also be driven by the inevitable growth of the Internet of Things. When we consider a future in which connected devices -- whose connectivity must be seamless and constant -- are shipped around the world, the idea that businesses will have pay and manage roaming for every border they cross becomes almost ludicrous -- not to mention very expensive.

Yes, there was initial uncertainty from the industry around the scrapping of roaming charges in the EU. But, one year on, there is widespread acceptance that any move to increase mobile usage is a good thing. There are lessons to be learned, though: Regulators in those regions considering implementing something similar should collaborate with mobile operators to understand the challenges of the industry and the further strain any new legislation could place them under. A dialogue should be opened on how mobile usage can be increased, quality of service and consumer rights upheld, and operator revenues protected in the long term.

— Mikaël Schachne, VP Mobility & IoT Business, BICS

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About the Author(s)

Mikaël Schachne

VP Mobile Data Business

Mikaël Schachne joined the international division of Belgacom in 2001 which was then spun-off and merged with Swisscom International and MTN International. After having successfully led the product development and management of new international mobile data services such as signalling, GPRS Roaming eXchange (GRX), SMS hubbing, MMS hubbing, instant roaming and open connectivity roaming hubbing, he is now in charge of the mobile data business at BICS. The portfolio, which has been built across the last 10 years, is now supporting international mobile communications needs for more than 400 mobile operators and MVNOs across the world.

Mikaël Schachne previously worked for Winstar Europe and Mobistar where he gained extensive expertise in the implementation of telecom networks in the fields of GSM, GPRS, wireless local loop, IP and SS7. He graduated from the Brussels University Applied Science Faculty (Belgium) as a civil electrical engineer specializing in electronics and telecom and holds a Masters in Business-to-Business Marketing from the Vlerick Management School in Leuven, Belgium.

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