The (quasi) end of roaming, i.e. the unpredictable consequences of the Grexit

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Believe it or not, the Greek financial drama was fundamental to finalize today the long-awaited European agreement for the end of roaming surcharges and the regulation of net neutrality. Just few weeks ago several signals in Brussels suggested that Council and European Parliament were unable to find a compromise on the text negotiated in the Trialogue. The Latvian Presidency was already preparing the hand-over to the Luxemburger successors. Then something happened. The dramatization of the Grexit and the controversial debate, on both traditional and social media, about the role of the European Union for the destiny of its citizens, changed the scenario: Council and Parliament realized that it was time to provide evidence of what happens in Brussels beyond discussions. And the (political) agreement about the Single Telecom Market, the unlucky, controversial and watered-down invention of Commissioner Kroes of September 2013, is now close to the end.

Next steps will be the formal and legal ratification of the agreement. However, while there is no doubt about the final approval by the Council, the position of the European Parliament, which will have to approve the deal in plenary session, remains a bit unpredictable: in fact, it is clear that the representative of the Assembly have been surrending to the Council, and some MEPs will be unhappy. Therefore, it is still possible that the plenary session may disregard the political agreement on the grounds that the deadline of the roaming surcharges and the details of the net neutrality framework are not satisfactory. Let’s see.

In any case, as regards the roaming deal, it must be stressed that the even beyond mid-2017, i.e. the date fixed for the end of the roaming surcharges, the problem will be not completely over. In fact, telecom operators will retain the right to continue to charge roaming surcharges vis-à-vis anomalous or abusive behaviors of consumers. Whats’ about? It is the case, according to the fact sheet of the Commission, when:

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”.

One could argue why such a behavior should be considered abusive! To the opposite, buying services from any operator in the EU, and using such services everywhere, should the ultimate objective and dream of this integration process! However, this is a political compromise, i.e. a kind of political price paid by the European institutions to the big telecom operators which do not want roaming surcharges to disappear completely, otherwise small and competitive operators could start to offer mobile services from a country to another (for instance: a Finnish mobile operator selling SIMs to Italian customers, and viceversa) jeopardizing the national mobile oligopolies. That’s life.

In other words, in mid-2017 the end of roaming surcharges will be limited to a so-called “fair usage”, that is to say a minimum amount of traffic that operators have to guarantee without roaming surcharges, while the exceeding traffic will be more expensive. Who will decide the quantity of the surcharge? Council and European Parliament are still finalizing the text. The likely option should be a minimum fair usage allowance to be decided ex-ante by Berec, the European regulators agency.

In both cases, the market will react depending on the competitive conditions resulting out from the final legal text: if the entire framework is sufficiently competitive, i.e. provides affordable and low wholesale tariffs allowing all operators to compete everywhere in the EU, than there will be a fierce competition in providing customers with the best and wider fair usage offer. By contrast, if the final legal text is not competitive, i.e. mobile dominant operators will be the only one, thanks to high and non competitive wholesale tariffs, to drive the market, their interest will be at minimizing, as much as possible, the fair usage clause.

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