EU Says Roaming “Madness” Costs Operators Huge Revenues

The European Union continues its crusade to eliminate roaming charges across 28 member states by claiming that nearly half of European smartphone owners don’t use mobile Internet outside their home country because of prohibitive costs.

The EU estimates that operators are missing out on huge potential revenues from a market of 300 million mobile phone users, while roaming charges are hindering mobile commerce, health, education and automotive development, and negatively affecting app developers.

A recent report suggested that the European app economy is booming, but creators of mapping, travel and photo apps are suffering because of roaming costs.

Roaming rebellion

The survey of 28,000 European citizens states that 94 percent of European mobile users limit their use of data outside their home country and 47 percent say they would never use mobile Internet in another country. Some don’t even call other countries from their home because of the cost.

“I am honestly shocked by these figures. It shows we have to finish the job and eliminate roaming charges,” said Neelie Kroes, European Commission vice president. “It’s not just a fight between holiday-makers and telecoms companies. Consumers are limiting their phone use in extreme ways and this makes no sense for the companies either.

“Millions of businesses face extra costs because of roaming, and companies like app makers lose revenue too. Roaming makes no sense in a single market – it’s economic madness.”

Roaming data off

The EU says frequent travellers are the most lucrative potential market, but that they are more likely to switch data off, possibly because they are more informed. In the UK, 37 percent switch off their phone and never use it, 36 percent switch off data roaming, seven percent activiate a special roaming plan, eight percent purchase or use a foreign SIM, while 11 percent connect to local Wi-Fi networks.

Seven percent do something else, perhaps throw their handset off the ferry once the White Cliffs of Dover are out of sight, while four percent simply don’t know.

Despite the doom and gloom, the EC says price caps and other regulations limiting the cost of using mobiles abroad have seen data roaming increase by 1,500 percent since 2008. Roaming charges for calls and SMS have come down by 80 percent in the last six years, while the cost of mobile data has fallen by up to 91 percent.

Last year, Kroes told European operators to prepare for an end to roaming and to take advantage of new business models and opportunities, rather than stick with their outdated revenue streams. She pointed out that the widespread elimination of roaming charges in France has been successful and is evidence that the EU’s package of proposals can be implemented on a continent-wide basis.

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