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EC to soften roaming caps blow for telcos – report

EC considers a softer a approach to roaming price caps

The European Commission’s (EC) plans to abolish retail roaming rates within EU altogether by 2016 could be changed to a watered-down ‘fair-use’ policy instead, according to a draft report seen by the Financial Times.

The changes proposed to the earlier plans that were bitterly opposed by telcos suggest the adoption of EU-wide roaming rules, where mobile users could roam for free up to a ‘fair limit’, yet to be defined, before being charged extra.

While the development is likely to be welcomed by network owners, who charge other operators for using their infrastructure, this could have a negative impact on smaller telcos. Operators dependent on other carriers’ networks would still be obliged to pay wholesale roaming rates, which under the proposal would not change, without the added boost from international roaming tariffs.

The draft proposal is the latest in a long process that aims to unify the European IT and telecoms market as one ‘Connected Continent’. It follows a summer that saw the EC implement further price caps on roaming prices, a 50% reduction compared to 2013. The EC has justified price capping by findings, based on a report published in February, showing that Europe’s mobile operators are missing out on business from 300 million customers by charging premium rates within EU.

Price capping on roaming has faced opposition from almost all telcos operating in Europe, claiming it damages competition and results in decreased profits, which ultimately leads to less investment in new infrastructure. Small operators have also argued there is an imbalance between retail and wholesale roaming caps, which makes it ‘impossible’ to offer better packages to customers who wish to roam while travelling internationally.

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The new proposal also outlines plans to ensure all new spectrum allocations are set to a minimum of 25 years, and member states would be allowed to assign spectrum on an indefinite basis. Telcos will be happy about this move, which would give better long-term business vision and security.

The new commission, lead by recently appointed EC President Jean-Claude Juncker, starts deliberating on the proposal in November. Industry representatives such as the group of European regulators Berec, have also been asked for input.

It will be interesting to see what is the next step in this saga, which is likely to continue for some time yet before a final agreement for a new directive is reached. At least it now looks like the EC is taking a more middle-of-the-road tactic, rather than going for an all out roaming abolishment.


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