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Even the Brits love this EU regulation. It may not survive Brexit
FOR almost two years, citizens of European Union (EU) countries have enjoyed free roaming on their cell phones, no matter where they travel within the 28-country bloc.
But what happens when a country is no longer a member of the EU?
That's what many who travel to and from the UK are asking themselves as the clock ticks down to Britain's departure.
Absent an agreement to the contrary, carriers would no longer be required to offer free roaming after Brexit to their British customers or to continentals on British soil.
"That would suck, actually," said Adele Faber, a 26-year-old Frenchwoman who'd just arrived at London's St Pancras station on the Eurostar from Paris to visit friends.
She said she loves travelling and relies on roaming on her iPhone 5 from Orange SA to use maps and make hostel reservations. Her monthly bill: 20 euros (S$41), "more expensive a few years ago".
In less than a month, the UK could leave the EU's digital single market and its roam-like-home mobile rules. Since 2017, carriers have been forced to cap and level the wholesale rates they charge each other when customers call, text and browse the Web on other networks in the bloc. Before that, surcharges meant holidays and work trips could end with the shock of a phone bill 10 times bigger than expected.
UK and continental operators have said they have no plans to jack up rates - but they've also become more vocal about how they might outmanoeuvre rivals as the risk of a no-deal Brexit has drawn closer.
"I don't imagine that there will be this uncomfortable consequence for British tourists who'd come to continental Europe and vice versa to be forced to pay again," said Stephane Richard, chief executive officer of France's Orange.
Still, whether or not to re-impose roaming charges will be a "marketing decision", he told reporters late last month. A Vodafone Group plc spokesman was similarly ambiguous, saying: "It's too soon to assess the implications of Brexit on roaming regulation. However, we expect competition will continue to drive good value for customers."
The more of Europe a carrier operates in, the fewer places it has to worry about rival carriers levying new charges on it. This is especially true for such popular holiday spots as Spain and Italy, where the most smartphone-toting British tourists flock. One of the best-positioned is Vodafone, which has units in the UK, the Czech Republic, Germany, Greece, Hungary, Ireland, Italy, Malta, the Netherlands, Portugal, Romania and Spain. BT Group plc, on the other hand, only sells to consumers in the UK, so would wield much less clout if rates went back up.
"We are fortunate to be part of a global organisation," said Mark Evans, CEO of O2, the UK division of Telefonica SA, which operates in Spain, the UK and Germany. "So you'd expect us to be in a strong position, if the direction of travel changes. But at the moment we want to do the right thing for our customers."
Such large carriers as Telefonica and Deutsche Telekom AG also would be better able to throw their weight around to push down wholesale prices. Europe's telecom carriers aren't in the strongest position to make grand promises. The main stock market index of the continent's carriers has shrunk 28 per cent in the past three years as they struggle with pressures from competition and spend billions on masts, cables, media rights and airwave auctions.
The unrelenting headwinds are forcing them to consider more radical options than before - like selling off their infrastructure - so if wholesale costs start to eat into their balance sheets, they could well seek to recoup them. Europeans quickly got used to their new freedoms. The summer of 2017 saw a 600 per cent-800 per cent increase in 4G LTE data roaming traffic in the EU versus the same period in 2016, according to BICS, a wireless data wholesaler.
The prospect of this new right being snatched away again has regular users worried. "I'd be very angry. It took so long for the rates to get cheaper, so I would say back to square one," said Virginie DT as she dragged her wheeled suitcase past the high-end boutiques and coffee shops of St Pancras, headed home on the Eurostar after visiting her daughter in London. "Blame Brexit again!"
She uses Orange's "Sosh!" low-cost plan and navigates London with Citymapper on her iPhone 6+ when she's in town. She declined to give her family name.
If a continental carrier decides to impose higher rates on a UK carrier, the British company will have to face a trade-off: "to either take the risk and eventually phase higher roaming costs, but on the other side, lose some subscribers," said Mikael Schachne, an executive at BICS.
Or, to estrange as few customers as possible, carriers could reimpose surcharges on customer categories that travel less and not on roaming-dependent jet-setting business clients, he added.
But the fear of alienating customers or provoking regulators could ultimately keep carriers in check. "Re-introducing roaming could create a major competitive disadvantage for operators brave enough to do so in the hugely competitive UK market," said CCS Insight analyst Kester Mann. "And even if they did, Ofcom may still be within its rights to clamp down if it deemed the move unnecessary," he said, referring to the UK's communications regulator. BLOOMBERG