British consumers have become accustomed to using their mobile phones without incurring any additional charges while visiting the EU. Prominent Brexiters promised that free roaming in the EU for UK consumers would continue after Brexit. But three of the four major UK mobile network operators – Vodafone, EE, and Three – have recently announced the return of roaming charges.
The proposed charges are modest, and The Economist argues they will actually make the UK mobile market fairer – because consumers who do not roam will no longer have to cover the costs of those who do.
There is a real risk, though, that wholesale charges will increase for UK operators and converge with the wholesale charges for other non-EEA countries. EU operators could charge UK operators more, knowing that UK operators could once again pass on higher EU wholesale charges directly to consumers through retail roaming charges.
Operators will once again be able to act on their incentives to set high prices for reciprocal traffic, to justify higher retail prices – in Poland, for example, the major operators have already signaled that they will charge consumers for roaming in the UK in the future.
Finally, retail roaming charges mean that UK consumers will reduce their use of roaming to some extent – for example, by relying on less convenient alternatives like Wi-Fi hotspots when traveling – making it less attractive for foreign operators to compete for UK operators’ roaming traffic. Collectively, these factors may lead to higher wholesale charges. That would cause even higher retail charges, as UK mobile operators would try to maximize profits from those customers who will continue to use roaming services even at high rates.
[ > Center for European Reform — September 20, 2021 ]
