SHARE
COPY LINK

EUROPEAN UNION

European mobile operators brace for end of roaming charges

Long an important source of revenue for telecom companies, roaming charges will be lifted in Europe starting June 15, raising pressure on operators in a tight market.

European mobile operators brace for end of roaming charges
File photo: Maridav/Deposit Photos

Roaming charges within and outside Europe account for an average of around five percent of sales for telephone operators in Europe, estimates Sylvain Chevallier of BearingPoint.

But the impact of the new measure will differ for corporate and individual clients, he adds.

On the Spanish market, subject to wide seasonal variations in business due to a reliance on tourism, Telefonica estimates the end of roaming charges in the EU will lead to a 1.2 percent drop in its sales this year.

But the change can hardly come as a shock for telecom operators, according to Victor Marcais of Roland Berger, who noted the plans have been in the works for several years and are “largely anticipated”.

“If the operators are not ready, it will be more their fault than anything else,” said Dexter Thillien, analyst with BMI Research. “It has been very gradual.”

Still, telephone operators are taking different approaches as they gear up for the change.

In Italy, for example, Wind-Tre says it implemented the European requirements two months early, while its rival TIM said it would adhere to the new rules the day they come into effect.

In France, Free expanded the reach of its roaming-charge-free zone in March, whereas Orange and Bouygues did away with the fees in May. A fourth company, SFR, is expected to follow suit on June 15th.

It will be hard to tell exactly how much the move affects telecom operators since they no longer detail the revenues in their filings.

The European Commission estimates the end of roaming fees will cost European telecom operators €1.2 billion ($1.3 billion).

The market generates €4.7 billion a year, according to European telecoms regulator BEREC.

But the share of revenues from roaming charges already significantly declined in recent years as charges for calls and text messages dropped 90 percent since 2007 and data charges declined 96 percent since 2012 under EU regulations.

Data traffic, meanwhile, has grown 100-fold, according to the EU.

Bet on growth

But the telecoms business varies greatly from country to country, with Europe's southern countries relying heavily on tourism compared to their northern counterparts.

“Southern countries like Portugal or Greece have a lot of temporary clients and fewer with longer-term plans, so revenues from roaming fees also helped finance the costs of reinforcing networks to help deal with seasonal peaks,” said Isabelle Jegouzo, who represents the European Commission in France.

The wholesale market – business among operators – was one of the main stumbling blocs in discussions as some operators were pushing for high prices while others sought to lower them.

“Unsurprisingly, the countries in the south wanted the highest prices whereas those in the north wanted the opposite. In the end, we got a typical European agreement, win-win, with no one completely winning but each one getting a bit,” said Dexter Thillien at BMI Research.

The price per gigabyte was established at €7.70, which is set to decline until 2022. Operators are allowed to apply surcharges – in accordance with local regulators – if losses linked to roaming surpass three percent of annual net profit.

“As consumers grow accustomed to using data throughout Europe they will undoubtedly be inclined to do so outside Europe, which will compensate for some of the losses,” said BearingPoint's Chevallier.

The European Commission is making the same bet, said Jegouzo.

It aims to stimulate the digital economy in Europe in terms of numbers of users and services in the hope that consumption rises faster than the pace of dropping prices.

“This is where operators will see gains,” said Jegouzo.

“There are positive aspects that are being underestimated, particularly how the public sees the operators,” said Roland Berger's Victor Marcais.

“It's a chance to improve their image but also to benefit from the rise in consumption.”

By Erwan Lucas

For members

EUROPEAN UNION

Visas to qualifications: How foreign residents in Europe can get help with paperwork problems

Foreign nationals living across Europe regularly have to overcome hurdles with paperwork and red tape whether it's with residency or work permits or having professional qualifications recognised. But there is help at hand that many may not know about.

Visas to qualifications: How foreign residents in Europe can get help with paperwork problems

What is SOLVIT and what kind of problems can it help you solve?

Although the general principle is ‘freedom of movement’, people going to live to another country of the European Union, Norway, Iceland or Liechtenstein can have all sort of problems setting up.

These can include the transfer of a car bought in another EU country, the swapping of a driving license, the application for a non-EU spouse visa, and the procedure to set up a company. The good news is that help is available.

SOLVIT is a name few people are likely to have heard, despite having been around for 20 years.

It is a free online service to help individuals and businesses resolve problems they experience with administrations in the countries of the European single market, where people, goods, services and capital can move freely.

What sort of problems?

Created by the European Commission in 2002, the network of SOLVIT centres can help with anything related to European single market’s rights.

The single market countries have common rules to avoid technical, legal and bureaucratic barriers to free movement. But sometimes national, regional or local authorities do not apply these rules as intended causing problems to the people who depend on them.

It can be daunting to try and solve these issues across borders, even more so when another language is involved. In these cases, people can resort to SOLVIT centres to seek help.

How does it work?

Complaints can be submitted on the SOLVIT web page, which also provides the contact details of SOLVIT centres in all countries.

The central office (home centre) will check whether the problem falls within the SOLVIT’s remit, prepare the case and send it to the SOLVIT team (the lead centre) in the country where the problem has occurred, who will try to find a solution with the responsible authority.

The objective is to complete the procedure in 10 weeks from when the case is accepted by the lead centre. But according to a report by the European Commission less than 50 per cent of cases now meets that target, partly because of stretched resources in the face of growing demand.

Gerard de Graaf, the head of the EU Office in San Francisco, previously head of the team that created SOLVIT, wrote in the 20th anniversary report: “In 2001, it was clear that citizens and small businesses in particular needed hands-on help to overcome incorrect application of EU rules by national and local authorities.

“We had contact points in each member state but few problems ever got resolved and it was disheartening. We had the idea to set up instead problem-solving centres, connected via an internet-based, multilingual network… I still vividly remember the first cases going through the new system in 2002, and, even more so, the positive feedback we received: “I can finally reunite with my husband and children…”

In 20 years, the network has dealt with close to 29,000 cases. Only in 2021, 5,231 complaints were filed to the SOLVIT service (2,455 accepted) compared with 155 in the first year of operation.

How are countries doing?

The caseload varies between countries. In 2020 France handled the largest number of complaints, with 157 submitted by individuals and companies and 435 received from other Solvit centres. Germany followed with 131 cases lodged by individuals and companies and 214 received from other Solvit centres, Italy with 146 and 270 respectively, and Spain with 133 and 196.

Austria also had a relatively large number of cases, with 32 submitted complaints and 102 received. Sweden had 39 submitted and received 60, Denmark 51 and 22, and Norway 11 and 30.

Some of the common problems, the European Commission reports, were the recognition of professional qualifications, visa and residence rights, driving licences, pension rights and access to healthcare.

In 2020 difficulties included delays in exchanging information related to social security, as well as problems accessing healthcare and claiming unemployment benefits linked to COVID-19. Some of the problems in France were related to the social security reimbursement of medicine sold by parallel traders.

In terms of recognition of professional qualifications, there were difficulties for nurses who acquired part of their training in a non-EU country, for social paedagogical educators in Italy and for speech therapists in France.

Complaints about Sweden were related to the inclusion in the population register and the issuance of a personal identification number, unjustified delays to admit EU workers to the national social security system and to issue residence cards to their non-EU family members. This was reported also in Austria.

Several countries, including Norway, Spain, Sweden, the Netherlands, Bulgaria and Germany, applied unjustified conditions and refused short-term visas for non-EU family members of EU citizens.

If you need to submit a complaint via Solvit in the country where you are then click here for the details of how and where to submit it.

SHOW COMMENTS