Roaming fees scrap to cost operators hundreds of millions

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Big four count the cost as European Union’s roaming charges ban comes into effect on June 15

UK operators will be hit for hundreds of millions of pounds in annual revenue following the scrapping of roaming fees in Europe on June 15.

The new regulations set by the European Union (EU) means customers who use their mobile abroad will be charged the same domestic rates for minutes, texts and data.

Vodafone Group chief financial officer Nick Reid claimed it will recoup its cost through converged services and fixed line products. The three months ending March 31 saw fixed line revenue across Europe hit £8.6 billion.

Speaking to Mobile News, Reid said: “Last year service revenue and EBIDTA from roaming totalled £150 million. I don’t think we will directly try to recover on roaming. We have the three growth drivers and we will be focusing on those. 

“Growth comes from convergence. We are growing in fixed line. We have the smallest market share as we only started five years ago, but we are the fastest growing. We will also have an advantage in Enterprise and we’ll be looking at content.”

Reclaiming costs
O2 had a similar message, claiming it would reclaim costs through Internet of Things services such as O2 Home.

The service enabled the operator to become the first in the UK to launch a consumer-focused smart home service in September last year. It offers various products which allow the user to control lighting and security in their home using their smartphone.

O2 chief financial officer Patricia Cobian told Mobile News: “We don’t break down the numbers, but there certainly will be an impact on our revenue.

“We’ve seen data usage grow and customers are increasingly using mobile in other aspects of their life. O2 at Home will stimulate that alongside other technologies which underpin the development of IoT.”

Minimise the impact
EE CEO Marc Allera added in an exclusive interview with Mobile News last month: “Roaming doesn’t contribute massively to our revenues but it does impact us to the tune of tens of millions of pounds on an annual basis.

“We have known this has been coming for a while and have moved to take steps to minimise that as best as we can.”

All four of the UK’s major networks have removed their own roaming fees in advance of the upcoming law. Three was the first to implement these changes in a number of countries with its Feel at Home package in 2013, followed by Vodafone, EE and O2 earlier this year.

According to recent research from price comparison website uSwitch.com, almost a quarter (24 per cent) of mobile users have returned from holiday with an average overspend of £52. Forgetting to switch off data roaming (30 per cent) and mistakenly thinking WiFi is on (27 per cent) were found to be the key drivers of bill shock.

 

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