EU data roaming charges ban: how it will impact telecoms companies

By Johan De Mulder

As of Thursday, data roaming charges within the European Union are no more.
 
This is undoubtedly good news for customers travelling abroad, but what impact is it expected to have on telecoms companies?

Instantly-recognisable, multi-national carriers – the likes of EE and Vodafone – have long been ready to comply, with some having already implemented new plans to their users ahead the June 15th deadline.

Analysts warned earlier this year that the abolition of these charges could hit such companies’ profits, with uSwitch Mobile senior commercial manager Ernest Doku claiming in February that they will have to explore areas to make up the revenue gap.

“There will certainly be a major concern from all providers in the long term and wholesale rates will have to be made up elsewhere,” he said.

GfK technology director Imran Choudhary also added: “The universal impact on all operators could definitely reach the millions in terms of revenue.

“Roaming generates a lot of turnover and it’ll definitely hit a lot of people within those businesses who are responsible for those areas. Operators may well generate different pricing structures for non-EU roaming to account for the losses.”

A number of smaller companies have already applied to the EU for an exemption, however, to avoid a potential financial impact. Operators in the Nordics, for example, predict a drop in 1 to 3% in earnings before tax.

There are protections in place too; fair-use rules dictate that if net profits are hit by 3% or more, they will be allowed to introduce roaming fees subject to gaining the relevant permission from national authorities.

Though companies are now under obligation to charge the same rates for call, text and data, they can maintain caps on data usage abroad. This will leave users still incurring roaming charges if they exceed that cap.

In turn, this has led to consumers being urged by watchdogs to check with their phone company about limits in the places they are set to visit, especially as eligible countries differ from provider to provider.

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