The European Union (EU) has reached an agreement, which will see an end to roaming charges across member countries of the EU from June 15, 2017. However, the European Commission (EC) notes that abusive usage of this policy will not be allowed:
The rules prevent abusive uses: for example, if the customer buys a SIM card in another EU country where domestic prices are lower to use it at home; or if the customer permanently stays abroad with a domestic subscription of his home country. This is not the usual use of roaming as the vast majority of Europeans experience it. These unusual behaviours are also called ‘permanent roaming’ and could have a negative impact on domestic prices, and ultimately on consumers. This is why there is a fair use safeguard. Once that limit is reached while being abroad, a small basic fee can be charged. This will be much lower than current caps (maximum prices that operators can charge consumers for roaming in the EU) and is likely to decrease even further.
The EC has been mandated to define what the fair usage limit will be.
What happens between now and June 2017?
– The roaming rates across EU, as they stand now, will remain intact till April 2016. The current roaming rates are: €0.19 per minute of call made, €0.06 per SMS sent, and €0.20 per MB of data (excluding VAT). More on this here.
– From April 2016, the roaming rates are expected to reduce further: telecom operators will be allowed to charge a small additional amount over domestic prices, which can go up to €0.05 per minute of call made, €0.02 per SMS sent, and €0.05 per MB of data (excluding VAT).
– The EC mentioned that even if telecom operators charge the maximum additional amount, post April 2016, the roaming rates will be about 25% of the current roaming caps for calls made and data, and 33% of the current roaming cap for SMS.
The EC also mentioned that the reason the process of reducing roaming charges across the EU will take about 2 years is because “a number of steps have to be taken in order to make the end of roaming charges sustainable throughout the EU.” The primary issue is the prices that telecom operators charge each other for using of their networks, which needs to be thoroughly reviewed before implementation can begin.
How will this affect domestic prices?
There is a likelihood that this move will lead to telecom operators increasing domestic prices, in order to compensate for the loss of revenue from roaming. Elimination of roaming charges is also likely to lead to an increase in customers using their personal phones for making calls, sending SMSes and using web-based apps while travelling, instead of opting for international calling cards. However, it’ll be interesting to see if this additional revenue will offset telecom operators’ loss of revenue from roaming. It’ll also be interesting to see how the EC defines fair usage limits, because potentially customers could abuse the elimination of roaming charges. Also, the agreements telcos reach in regards to prices for sharing of each others network, will play a key role in whether domestic prices are increased or not.
Roaming rates revision in India
In India, the Telecom Regulatory Authority of India (TRAI) had mandated telecom operators to reduce traiff ceilings for national roaming calls and SMSes, which came into effect on May 1, 2015. Under the revised tariff ceiling: local calls on national roaming will be charged Rs 0.80/minute, as compared to Re 1/minute earlier, STD calls will be charged Rs 1.15/minute instead of Rs 1.50/minute, incoming calls will be charged Rs 0.45/minute instead of Rs 0.75/minute, local SMS will be charged Rs 0.25/SMS instead of Re 1/SMS, and STD SMSes will be charged Rs 0.38/SMS instead of Rs 1.50/SMS.
In March this year, TRAI had proposed even lower national roaming charges, however it seems to have given up some ground to telecom operators. It’s worth noting that Indian telecom operators reportedly generate revenues of about Rs 8000 crore from roaming charges, which accounts for about 8% of the total revenue. Yet they seem to be reluctant to budge even a little, which seems foolish because lower roaming rates will mean increase in voice calls and SMSes while travelling, which in turn will mean increased revenues. This is the same attitude telcos have demonstrated while arguing against Net Neutrality, stating revenue from data usage isn’t enough to offset revenue from traditional sources, when quarterly-report-after-quarterly-report have been indicating otherwise.
On a more positive note, from June 15 this year, BSNL users are being offered free roaming across the country.
Image Credit: Flickr user Stuart Chalmers