As we well know and frequently heard since last year (at least since September 2013, when Commissioner Kroes launched the Connected Continent proposal), international roaming tariffs within the EU should soon disappear. While travelling, European citizens will then be able to call, use SMS or access Internet via mobile device without surcharges, anywhere in the EU. On April 3, 2014 the plenary session of the European Parliament approved the proposal tabled by the European Commission, although with drastic amendments with respect to the initial draft. The completion of the entire reform (containing a puzzle of different measures, well beyond roaming) will require the final approval of the Council, which is deemed to happen – optimistically – sometimes before the end of 2014.

The question is whether the end of international roaming should be given already for granted or not; in the latter, whether one should rather better examine the proposed rules and maybe find that the promised scenario is more complex. The mediatic campaign ran by the concerned European institutions and politicians (Kroes, Barroso, Del Castillo, ecc) have always showed the end of roaming as a simple result of the debated reform. This is comprehensible, because the end of roaming constitutes a formidable political achievement for policy-makers, therefore the temptation to be recorded in the history as the leader of this achievement is great. Viviane Reding, who was the first European commissioner to address the roaming issue in 2006, got an incredibile popularity from this action.

However, a more deep analysis of the proposed roaming reform show that the resulting scenario may be less exciting than expected. Provided that everything goes through, without obstacles and delays in the following approval process involving the Trialogue (Parliament, Commission and Council), what will actually happen with the currently proposed rules? Will really international roaming disappear in the EU? And when exactly? Will current mobile tariffs remain basically the same? Here the answers in peanuts.

Incoming calls

As from July 1st, 2014 (thus, just in a couple of months!), European citizens should no longer be subject to roaming surcharges for incoming calls received when abroad. In other words, we will not have to pay an additional fee for the fact that somebody is calling us while we are travelling abroad, as it is the (irritating) case now. Therefore, calls received abroad will be treated like any call received when we are at home: only the calling party has to pay, not the one receiving the call.

HOWEVER: since the reform will be (optimistically) in force only at the end of 2014, this means that up to that date consumers will be continuing to pay for incoming calls, despite the fact that the reform sat the final deadline for July 1st. It is a strange, hilarious paradox.

Outgoing calls, SMS and Internet

As from 15 December 2015 roaming charges for calls, SMS and internet usage, should disappear completely. When travelling abroad, European citizens should continue to pay just the domestic rate. This will be a great achievement for the EU, something very important in times of Euro-skeptisism.

HOWEVER: despite the above, the proposed reform provides for an exception which may even become the rule: mobile operators may continue to apply roaming surcharges (although within the limits of the current regulated caps established by European Regulation 531/2012) if users consume a quantity of traffic which is considered “not fair”. In other words, the elimination of roaming may be limited to just the “usual” and “fair” traffic usage of people when traveling abroad. BEREC, the European agency for telecommunications, should adopt guidelines to precise what “fair usage” means (in quantitative terms). In any case, mobile operators will have the power, not the obligation, to apply this “fair usage” condition. Thus: despite the optimistic declaration by the European institutions, the actual elimination of roaming charges will depend, on one side on how many operators will actually use the “fair usage” faculty; on the other side, on the actual notion of “fair usage” decided by Berec.

What is the sense of the “fair usage” limitation? The problem is that incumbent mobile operators are afraid of the so-called “permanent roaming”, i.e. a market scenario where the same tariffs apply everywhere in the EU, therefore there is no difference any longer between domestic and roaming in terms of prices. In such a scenario, European citizens could get mobile offers from any mobile operators based in the EU, since the agreed tariffs will be valid everywhere within the EU. In such a scenario, the competitive landscape of the mobile industry will change dramatically, since every operator would be able to compete everywhere within the EU. The consequence of this business dynamic would be a dramatic market consolidation, with the number of operators collapsing from 100 operators to a dozen or less. This kind of consolidation was – by the way – the official aim of the Connected Continent philosophy: the fewer operators in the EU, the better. It is therefore surprising to see that the European Commission left to operators the possibility to opt out.

Domestic tariffs

Will mobile operators just acknowledge the end of roaming, become more efficient and/or renouncing to make easy money, or will they try to rise domestic tariffs to compensate the loss? In a competitive scenario, rising tariffs will not be easy at all. However, the competitive landscape imagined and desired by the European Commission is not so promising. Fact is, the proposed reform does not take into account the fact that many medium-small mobile operators, including MVNO, will have difficulty in providing communications services abroad because the prices of access to foreign networks (necessary to provide roaming) may be too high, or even higher than retail prices. In other words, such small and competitive operators may be losing money when providing services abroad at domestic tariffs. The paradox is that some of such operators mobile may prefer to stop communications services abroad, others may even close the business. This involution of the market would favor just larger mobile operators (Vodafone , Telefonica, T-Mobile, etc.) which, strengthened by an increased market power, could increase domestic rates. In other words , the advantage of the disappearance of roaming could be negatively compensated by the increase of domestic rates in general.