EU Roaming Cap: Can “Roam Like At Home” Be Profitable?

 In Blogs & Bloggers

Turn new regulations into a competitive advantage

Many mobile operators are very concerned about the potential business impact of the European Commission’s proposal (sometimes called the Eurotariff) to eliminate roaming surcharges, starting June 2017. Soon European Union (EU) member mobile subscribers will be free to “roam like at home” – paying domestic prices regardless of where they travel on the continent.

The regulation of wholesale roaming markets was a final step in the Eurotarriff negotiations, which could put the nail in the coffin for Mobile Virtual Network Operators (MVNOs) if they can’t find a way to control costs. While politicians are quick to proclaim the consumer benefits of ending roaming charges, many mobile service operators are concerned that the wholesale caps are still too high. This could force smaller operators to limit or even eliminate roaming altogether.

Adding to the problem, a number of operators in southern Europe who experience large volumes of seasonal tourist roaming traffic complain that if wholesale prices are too low, they could be forced to raise domestic prices to recover their costs.

At the very least, this new regulation will reduce the revenues previously available to operators. To add to the worry, some Mobile Network Operators (MNOs) are now offering inclusive roaming in their packages (for example, EE and Vodafone) to gain competitive advantage in advance of the regulation taking effect. These moves have upped the ante for challenger operators who may now be forced to offer domestic-only service, or bear the increased margin pressure of providing a seamless roam-like-home service.

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