Despite hopes that roaming charges would not be reinstated post-Brexit, three of the big four U.K. service providers Three, EE and Vodafone have all announced that they’ll be reintroducing fees for their customers travelling to the EU. This represents a move away from promises that the free-roaming status quo would be maintained. This article takes a look at what this means for Britons travelling to the EU and what the potential impact of the reintroduction of roaming fees could mean for the U.K. telecoms sector.
How does data roaming work?
Before we look at the effect of Brexit on data roaming fees, let’s take a quick look at what data roaming is and how exactly it works.
Data roaming is what happens when you travel abroad and use your phone to use the internet. Although you’re connected to a foreign mobile network, you’re still paying your home network provider. Depending on your destination, you might face additional charges associated with data roaming.
From a mobile service provider’s perspective, there are two factors that affect how much roaming will cost them and how much they charge their customers: the wholesale market and the retail market.
The wholesale market
The wholesale market for data roaming involves mobile operators brokering deals with their foreign counterparts in relevant territories for their customers to use their networks when abroad. Then, whenever a customer uses the foreign network, they pay a fee or what’s known as a ‘wholesale charge’. Put simply, this is how much it costs a U.K. network for their customers to roam abroad.
The retail market
The retail market is how much the U.K. operator decides to charge their customers to roam. The rate they set has to, at minimum, cover the ‘wholesale charge’, but also give a good return.
What was the situation before Brexit?
In 2007, the EU regulated all roaming charges, setting a maximum rate that a mobile network could charge. A decade later, in 2017, as part of the ‘Roam like at Home’ (RLAH) initiative, the EU effectively abolished all roaming charges. Passing it into law that even when abroad in the EU, EU citizens would pay only their domestic rates.
What is the ‘fair use policy’?
Fair use policy makes sure that all customers that are roaming can equally benefit from RLAH. Essentially, this is a way for mobile providers to prevent customers from using too much data or more than ‘their fair share’. In reality, this manifests as a limit or a rule as to how much data you’re allowed to use and still continue to be charged at your domestic rate.
Note: there is no cap on SMS and calls, only data.
Why are mobile service providers reintroducing roaming fees?
Following the withdrawal of the U.K. from the European Union, the aforementioned regulation of mobile roaming charges no longer apply to British operators. This is because the Brexit deal did not protect ‘fee-free roaming’. As such, there is no longer a legal cap on the amount that your mobile provider is able to charge you when you’re roaming in the EU. In addition, EU operators are able to increase the wholesale charge that U.K. operators have to pay for their customers to enjoy service abroad. U.K. customers will face the ripple effect of this: raised prices.
The U.K. government took a deregulatory approach and removed caps on how much U.K. providers are able to charge and Ofcom, the industry watchdog, does not have the ability to intervene and stop mobile operators from raising their fees.
However, there some rules that exist to protect consumers. For example, mobile companies are obliged to inform their customers about any changes to their contract. In addition, if those changes are likely to cause customers significant disadvantage, the operator has to give them the option to leave the contract. Lastly, but quite significantly, there is a £45 (GBP), excluding VAT, cap on data roaming charges – unless you decide you want to spend more.
A quick recap of post-Brexit roaming charges
In September 2021, Three announced that it would be reintroducing roaming fees for British customers that travelled to the EU. Three put its decision down to underlying wholesale costs and disrupted travel. Here’s an overview of the main charges being reintroduced by the major mobile service providers in the U.K. Ensure to check directly with your provider to see how your individual plan will be affected.
Three customers:
Three has cut its fair use limit from 20GB to 12G and then will charge its customers £3/GB above that
EE customers:
- Excluding cheapest sim-only deals and other more expensive plans, most customers will see a flat day rate of £2 for roaming in the EU. This rate will allow you to use your plan as at home.
- Note that the day rate does not cover picture messages, premium calls or texts.
- There is a 25GB roaming fair use policy.
Virgin O2 Customers:
Note that none of the networks will reintroduce the charges in Republic of Ireland.
What do roaming charges mean for the telecoms market?
Because Brexit resulted in no-deal, EU roaming regulations no longer apply to U.K. providers. These regulations mandate a cap on wholesale fees, ensure that charges aren’t passed onto the customer, and put a financial limit for mobile data usage into place. In a post-Brexit world, UK operators are at liberty to charge however much they want and don’t have to guarantee surcharge free roaming.
As a result, U.K. operators may see higher profits and a higher margin revenue, especially as travel picks back up again As one industry analyst put it, this is ‘particularly welcome for an industry contending with saturated markets, costly 5G rollouts and a lack of consolidation.’
However, one factor that could impact the profitability of roaming charges is the wider availability of public WiFi across Europe. This means there is a question mark around the amount of demand there will be for roaming. However, given that the £2 daily charge is lower than pre-Brexit rates, this may mean that consumers are happier to pay for data.
In addition, some spectators argue that the reintroduction of roaming fees will actually work to make the UK mobile market fairer. According to the Economist, this now means that customers who don’t travel abroad will no longer have to cover the cost of those who do. For those that do, however, this could lead to some expensive mobile bills if you don’t take the proper precautions when travelling.