Operator argues wholesale pricing caps to be imposed should reflect what consumers will pay
Three is leading the way in calling for a review of EU roaming regulations that will see all roaming charges barred in member states from December 15 2015, subject to approval by national parliaments.
Three’s general counsel Stephen Lerner (pictured) told Mobile News whilst it has no objection with the principle of consumers being able to use their phones within the EU at no extra cost, the wholesale pricing caps that the EU imposes on operators need to be brought down in line with the price that the consumer pays.
As it stands, when the regulations are due to be enacted, domestic operators will be allowed to charge up to €50 (£40) per GB of data plus VAT, to a foreign operator when one of their customers connects to a mast while roaming.
Three charges £15 per month for all-you-can-eat data, 300 minutes and 300 texts on PAYG. This, according to Lerner, means if one of its customers uses as little as 500MB of data while roaming, Three would make a loss on the account.
“The current parliamentary proposal is a noble objective, but it would damage competition if the level of wholesale costs are not significantly decreased from the current caps,” said Lerner. “There is a provision in the draft which says the commission will look at the wholesale rates but, there’s no certainty as to what they will be.”
Three fears that the changes will favour larger operators such as Vodafone, which has a direct presence in most EU member states. Three already offers a “roam like home” service in a number of countries where it has been able to negotiate favourable rates.
The operator says it is hearing “positive noises” from regulators that rates will be brought down but to what level is unclear. It believes that the wholesale price should be set at the direct cost to the operator who owns the mast.
Vodafone said operators are spending millions of euros trying to get to grips with the last tranche of regulations to be imposed on roaming in the EU, which took effect from July 1, 2012. This saw most operators able to charge a maximum of 70 cents per MB plus VAT, meaning 1GB of data could potentially cost the operator whose customer is roaming €150 (£120).
“This legislation should be given a chance before introducing a more draconian intervention, which is likely to have a number of unintended consequences,” a spokesperson for Vodafone said, although refused to explain just what those “consequences” might be.
Vodafone has previously said that the amount of revenue directly effected by the changes would be around £1 billion.
O2, which refused to discuss the financial impact from the changes, said that the precise terms of how roaming would disappear remains unclear. EE was unavailable for comment.