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EUROPEAN UNION

European mobile operators brace for end of roaming charges

Long an important source of revenue for telecom companies, roaming charges will be lifted in Europe starting June 15, raising pressure on operators in a tight market.

European mobile operators brace for end of roaming charges
File photo: Maridav/Deposit Photos

Roaming charges within and outside Europe account for an average of around five percent of sales for telephone operators in Europe, estimates Sylvain Chevallier of BearingPoint.

But the impact of the new measure will differ for corporate and individual clients, he adds.

On the Spanish market, subject to wide seasonal variations in business due to a reliance on tourism, Telefonica estimates the end of roaming charges in the EU will lead to a 1.2 percent drop in its sales this year.

But the change can hardly come as a shock for telecom operators, according to Victor Marcais of Roland Berger, who noted the plans have been in the works for several years and are “largely anticipated”.

“If the operators are not ready, it will be more their fault than anything else,” said Dexter Thillien, analyst with BMI Research. “It has been very gradual.”

Still, telephone operators are taking different approaches as they gear up for the change.

In Italy, for example, Wind-Tre says it implemented the European requirements two months early, while its rival TIM said it would adhere to the new rules the day they come into effect.

In France, Free expanded the reach of its roaming-charge-free zone in March, whereas Orange and Bouygues did away with the fees in May. A fourth company, SFR, is expected to follow suit on June 15th.

It will be hard to tell exactly how much the move affects telecom operators since they no longer detail the revenues in their filings.

The European Commission estimates the end of roaming fees will cost European telecom operators €1.2 billion ($1.3 billion).

The market generates €4.7 billion a year, according to European telecoms regulator BEREC.

But the share of revenues from roaming charges already significantly declined in recent years as charges for calls and text messages dropped 90 percent since 2007 and data charges declined 96 percent since 2012 under EU regulations.

Data traffic, meanwhile, has grown 100-fold, according to the EU.

Bet on growth

But the telecoms business varies greatly from country to country, with Europe's southern countries relying heavily on tourism compared to their northern counterparts.

“Southern countries like Portugal or Greece have a lot of temporary clients and fewer with longer-term plans, so revenues from roaming fees also helped finance the costs of reinforcing networks to help deal with seasonal peaks,” said Isabelle Jegouzo, who represents the European Commission in France.

The wholesale market – business among operators – was one of the main stumbling blocs in discussions as some operators were pushing for high prices while others sought to lower them.

“Unsurprisingly, the countries in the south wanted the highest prices whereas those in the north wanted the opposite. In the end, we got a typical European agreement, win-win, with no one completely winning but each one getting a bit,” said Dexter Thillien at BMI Research.

The price per gigabyte was established at €7.70, which is set to decline until 2022. Operators are allowed to apply surcharges – in accordance with local regulators – if losses linked to roaming surpass three percent of annual net profit.

“As consumers grow accustomed to using data throughout Europe they will undoubtedly be inclined to do so outside Europe, which will compensate for some of the losses,” said BearingPoint's Chevallier.

The European Commission is making the same bet, said Jegouzo.

It aims to stimulate the digital economy in Europe in terms of numbers of users and services in the hope that consumption rises faster than the pace of dropping prices.

“This is where operators will see gains,” said Jegouzo.

“There are positive aspects that are being underestimated, particularly how the public sees the operators,” said Roland Berger's Victor Marcais.

“It's a chance to improve their image but also to benefit from the rise in consumption.”

By Erwan Lucas

BREXIT

Brexit: Brits in EU feel European and don’t want to return home

The majority of Britons who live in the EU, Norway, Iceland or Switzerland and are protected under the Brexit agreement feel European and intend to remain in Europe permanently, but many have concerns about travel problems, a new survey reveals.

Brexit: Brits in EU feel European and don't want to return home

The research also shows that problems exist and “travel is where most issues relating to the new status currently occur”. For instance, border officials are still stamping passports of UK citizens with residence rights under the EU UK withdrawal agreement, even though they shouldn’t.

“There is constant confusion around passport stamping. I was ‘stamped in’ to France on a short trip… but could not find anyway to be ‘stamped out’ again. I think I can only spend 90 days in other EU countries, but have no idea how anyone can check or enforce that – until someone decides to try. It’s a mess,” was one of the answers left in an open question.

“Every time I go through a Schengen border control, I need to provide both my passport and Aufenthaltstitel card [resident permit in Germany] and watch to check that they don’t stamp my passport. As I am currently travelling a lot that’s been 20-odd times this year…” another respondent said.

The survey was carried out by Professor Tanja Bueltmann, historian of migration and diaspora at the University of Strathclyde in Glasgow, between October and November 2022. About 1,139 UK citizens replied.

Of these, 80 per cent found acquiring their new status easy or very easy, 60.7 per cent feel their rights are secure, while 39.3 per cent have concerns about their status going forward.

Staying permanently

More than three quarters (76.6 per cent) of respondents said they plan to live permanently in the EU or the other countries of the European Economic Area and Switzerland. In fact, 65.7 per cent said that Brexit has increased the likelihood of this choice.

For some, the decision is linked to the difficulty to bring non-British family members to the UK under new, stricter immigration rules.

“My German wife and I decided we no longer wanted to live in UK post Brexit referendum. In particular, we were affected by the impact of immigration law […] We cannot now return to UK on retirement as I cannot sponsor her on my pension. We knew it was a one-way journey. Fortunately, I could revive an application for German citizenship,” was a testimony.

“My husband is a US citizen and getting him a visa for the UK was near impossible due to my low income as a freelance journalist. We realized under EU law, moving to an EU country was easier. We settled on Austria as we had both lived there before… we could speak some German, and we like the mountains,” said another respondent.

Professor Bueltmann noted that the loss of free movement rights in the EU could be a factor too in the decision of many to stay where they are.

Citizenship and representation

Among those who decided to stay, 38.2 per cent are either applying or planning to apply for a citizenship and 28.6 per cent are thinking about it.

A key finding of the research, Bueltmann said, is that the vast majority of British citizens do not feel politically represented. Some 60 per cent of respondents said they feel unrepresented and another 30 per cent not well represented.

Another issue is that less than half (47.5 per cent) trust the government of their country of residence, while a larger proportion (62 per cent) trust the European Union. Almost all (95.6 per cent) said they do not trust the UK government.

Feeling European

The survey highlights the Brexit impacts on people’s identity too. 82.6 per cent of respondents said they see themselves as European, a higher proportion than those identifying as British (68.9 per cent).

“Brexit has really left me unsure of what my identity is. I don’t feel British, and I certainly don’t identify with the mindset of a lot of British people who live there. Yet, I am not Danish either. So, I don’t really know anymore!” said one of the participants in the survey.

Professor Bueltmann said the survey “demonstrates that Brexit impacts continue to evolve: this didn’t just stop because the transition period was over or a deadline for an application had been reached. Consequently, Brexit continues to shape the lives and experiences of British citizens in the EU/EEA and Switzerland in substantial, sometimes life-altering, ways.”

Considering the results of the study, Professor Bueltmann recommends policy makers in the EU and the UK to address the issue of lack of representation, for instance creating a joint UK-EU citizens’ stakeholder forum.

The report also recommends the UK government to rebuild trust with British citizens in the EU introducing voting rights for life and changing immigration rules to allow British-European families to return more easily. 

This article was prepared in cooperation with Europe Street News.

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