Europe agrees on changes for cheaper roaming

European mobile phone and data users will get more choice and smaller bills when roaming between EU countries, following a compromise agreement reached by lawmakers.

The various parts of the EU administration have thrashed out a compromise on the maximum levels people can be charged for using mobile roaming services.

The deal was announced on Wednesday by the European Commission, the European Parliament and the Council of the EU, the latter two of which are expected to give their formal approval in May and June respectively.

As proposed by the Commission last July, the new roaming regulations will from July this year further lower the wholesale and retail caps on voice and SMS, while also adding retail caps for data roaming to the wholesale caps that already existed.

Crucially, the new rules will also allow customers to sign up for roaming contracts that are not provided by their domestic operator. This element of the regulation, which will come in in mid-2014, was designed to introduce greater competition, as few people sign up with a domestic operator specifically for their roaming tariffs.

"Consumers are fed up with being ripped off by high roaming charges," digital agenda commissioner Neelie Kroes said in a statement. "The new roaming deal gives us a long-term structural solution, with lower prices, more choice and a new smart approach for data and internet browsing. The benefits will be felt in time for the summer break — and by summer 2014, people can shop around for the best deal."

Retail price caps

Under the agreement, the retail cap for data roaming will begin on 1 July at 70 Euro cents (59p) per megabyte, grading down to 20 cents/MB in July 2014. Retail caps for making voice calls will fall from 35 cents/min today to 19 cents/min in 2014, and those for receiving calls will drop from  11 cents/min to 5 cents/min.

The cost of sending a roaming SMS message will drop from 11 cents today to 9 cents in July and 6 cents in 2014.

Current and new retail price caps (excluding VAT)

The new rules will also bring in warnings for customers who are travelling outside the EU and who hit a €50 limit on their data-roaming usage. At that point, they will get an email, text message or pop-up window telling them they are at their limit, and they will have to give their approval if they are to use — and be charged — more.

A similar anti 'bill-shock' measure was already in place for intra-EU travel. National regulators such as Ofcom have recently been considering extending such measures for global travel, where data-roaming prices can be as high as £10 a megabyte.

Wholesale price caps

Although it will take two years for the mandated decoupling of domestic and roaming contracts to begin, a separate change could also help lower prices from this year. Beginning on 1 July, mobile virtual networks operators (MVNOs), who resell other networks' connectivity rather than having their own infrastructure, will be able to access other operators' networks in foreign countries at regulated wholesale rates.

Current and new wholesale price caps (on prices operators charge each other)

MVNOs, which are relatively small operators, have traditionally not had much bargaining power when negotiating with large overseas carriers over wholesale roaming rates, so the proposals will make it easier for MVNOs such as Tesco Mobile to bundle competitive roaming deals with their domestic tariffs.

Compromise deal

The figures agreed upon in the compromise deal are lower than those originally proposed by the European Commission, but higher than those subsequently backed by MEPs. As the current roaming regulations expire at the end of June, the players involved in negotiating amendments to the proposals did not have much time left in which to strike an agreement.

"I am happy about this compromise. While we would have hoped for a faster reduction in prices so that consumers could enjoy lower prices this year, it is great to hear that the EU will continue its push for low prices for roaming," Bengt Beier, the co-ordinator of the Europeans for Fair Roaming pressure group, said in a statement on Wednesday.

The introduction of data-roaming retail price caps will be a particularly marked change. As ZDNet UK revealed a year ago, the actual cost of providing data roaming is between 1-3p per megabyte. Unless customers sign up for specific bundles, operators such as Vodafone still charge as much as £1/MB for data roaming within Europe.