New EU rules limiting international roaming charges come into effect today. I have written about this in strong terms before. There was some idiot interviewed on the radio this morning complaining that he’d run up a huge bill by mistake while on holiday. He has no problem with asking his friends the government to threaten people with violence to save him from his own mistakes.
Well, there is something very wrong with the regulatory decisions that led to the high roaming charges in the first place, of course, too. And another part of the problem is that virtually all the telephone companies were once government departments, and have a tendency to still behave like them. The only mobile company in the UK that is genuinely a descendent of an entrepreneurial private company is Three (which belongs to the Li family of Hong Kong) – the fact that they have been more aggressive about trying to change the status quo in this industry is probably not coincidental. (Vodafone is a descendent of a large defence contractor, so I doubt it really counts).
Three wrongs do not make a right, of course.
Just from personal experience, when roaming rates were halved (or about that) for Europeans travelling in the EU a couple of years ago, roaming rates for Europeans travelling outside the EU (which the EU has no power to regulate) approximately doubled at the same time. This was entirely predictable.
And another comparison.
In the US, when mobile phones were invented the country was divided up into a whole lot of regions, and operators were given licenses to operate in parts of the country only. When travelling outside that region, customers had to roam onto other operators networks, and they were charged hefty roaming charges. Over the years, deals were done and mergers too place so that these roaming charges disappeared and people could travel anywhere in the US without paying roaming charges.
In Europe, licences were also issued in a patchwork way, but it was a patchwork of nations. Hefty roaming charges were imposed, but not much happened to erode them. There were cross border mergers, but no genuinely European businesses came from this. No company has networks in anything like the whole continent and every company runs each national business separately. (Vodafone offers different tariffs to customers in each company). We are stuck with this business where calls are very cheap in your own company but become vastly more expensive when you cross a border. The European commission is clearly correct that the single market has failed here. (Two contributing factors: each EU country has a separate phone numbering system, and markets are naturally segregated by this. Another: the GSM phone system makes it extremely difficult for either the customer or the home network to choose which network he roams onto when he goes to another country. This second factor is what killed the “Three Like Home” tariff. Both of these things are consequences of the law of unexpected consequences due to other regulation).
I’m not sure how to fix this. Open markets up to more competition, obviously, which would should have been done in 1993 but is still a good idea now. Otherwise, just wait for the crappy businesses run by cellular companies to be overrun by new technologies. This is pretty imminent, thankfully.
As a telecommunications user I can comment that India also still has (or still had the last time I was there in 2008) intra-country “roaming”. One signs up for a tariff for a “circle” (typically one big state plus adjacent small states) and has higher prices for calls outside the “circle”.
In this case afaik there were not previously separate regional operators; it appears to be just gouging.
As an employee of a European telco I clearly can’t say anything in writing in public about the EU regualtory issues and telco policies in this regard.
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