Will Brexit impact the abolishment of roaming charges?


Will Brexit impact the abolishment of roaming charges?

EU roaming regulation in the UK; to be or not to be implemented

In June, the UK voted in a referendum to leave the EU. Although most can think of many consequences, your telecom bill is likely not one of them. However, the vote to leave could very well have implications if you decide to travel to the UK as of summer next year.

Last year we wrote about EU regulation being enforced mid-2017, which will eliminate the current surcharges on EU roaming. This means that within the EU, consumers will have the same tariff when roaming in the EU as they have in their home country. Also any surcharges between operators for EU customers roaming on their network should be abolished. The EU stipulated that this regulation needs to be implemented by EU members before June 2017. However, as British law has not yet implemented this EU regulation and the UK will no longer be an EU member, this leaves us with the important question, to be or not to be implemented?


EU roaming regulation in the UK?

To be frank, we would be surprised if the UK decide to implement it, because it is regulation imposed by the EU, the very same body the UK voted against last week. Moreover, the UK government likely has bigger regulatory fish to fry the upcoming months (and probably years). An alternative scenario could also be that UK telecom operators decide to comply with the regulation themselves. This would mean that they would no longer charge other operators in the EU when their customers are roaming in the UK, and vice versa, agreeing with them not to charge the UK operators when their customers are roaming on EU mainland. Question is, how likely is this scenario?


UK operators – roam like home?

First thoughts are probably that this scenario is not very viable as roaming revenues have traditionally accounted for a large portion of operator revenue. In other words, it would be like killing the goose that lays the golden eggs. On the other hand, it is believed that, even though operator margins will drop because of the regulation, a roam like home tariff will unleash a tremendous consumer uptake in roaming volumes as consumers will no longer be held back by high roaming charges. This surge in volume could even make up for most, or at least part, of the lost roaming revenue. Also staying away from the EU roaming reform could make the UK market extra vulnerable to new market entrants. These could be either EU competitors or outside industry companies, aiming to persuade UK consumers to buy a separate contract for roaming in the EU. Future innovations like e-sim or soft-sim could even further lower barriers to entry for those type of threats, leaving UK operators empty handed.

What will happen remains to be seen of course. However we would not be surprised if UK operators will go along with their fellow EU operators and move to roam like home type of offerings in the short run. The more so as consumers are probably also expecting them to do so.


More information?

Would you like to have more information about the consequences of Brexit on the EU roaming charges? Please do not hesitate to contact Patrick Steemers: PSteemers@deloitte.nl or +31(0)88 288 5892 or Dirk Reuser: DReuser@deloitte.nl or +31(0)88 288 2243.

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