European Union roaming regulations

Background

The European Commission has often raised the issue of high roaming charges within the European Union. In October 2005, the European Commission launched a consumer website on roaming tariffs in order to highlight the issue, which included €12 for a 4-minute call.

In 2006, when high roaming charge rates persisted the Commission proposed to intervene in the market by setting maximum rates at which mobile network operators could charge their subscribers. The proposed regulation was approved by the European Parliament and by the Council of Ministers, and came into law in June 2007. It required capping of retail and wholesale voice roaming charges from 30 August 2007, unless a special roaming tariff applied. The maximum prices was set to decrease further in 2008 and 2009. The regulation also required that customers traveling to another member state would receive a text message of the charges that apply for roaming services. Originally the capping measures were introduced on a temporary basis and were due to expire on 30 June 2010.

The law was amended in 2009 based on a review carried out under the 2007 regulation. The expiry date of the 2007 regulation was extended to 30 June 2012 and was extended to text messages and data roaming. It also provided for further annual reductions in the price capping until the expiry of the regulation and for compulsory per-second billing after 30 seconds for calls made, and per-second billing throughout for calls received.

Having still found that market conditions did not justify lifting the capping of roaming within the EU, the EU replaced the law in 2012. Under the 2012 regulation retail roaming capping charges are due to expire in 2017 and wholesale capping charges are due to expire in 2022.

Proposal to abolish all roaming charges

In 2013 the Commission proposed to establish a single market for electronic communications within the Union and to abolish roaming charges. The proposal was approved by the European Parliament on 3 April 2014, by a margin of 534 votes to 25. As drafted it would have ended roaming charges from 15 December 2015. The Council of the European Union has to approve legislation before it can take effect, and ended up rejecting the specifics of the proposed legislation.

Regulation (EU) 2015/2120 which was adopted on 25 November 2015 provides for the phased reduction of roaming charges within the European Union. As a transitional measure, from May 2016 the current price capping for roaming within the EU will be replaced by a maximum surcharge for roaming services which may be charged in addition to domestic charges. This however will not increase the cost of roaming for customers whose domestic rates plus the surcharge are higher than the price caps. It will reduce the charges for consumers with lower domestic prices or who pay for monthly allowances for using a particular service.

The Regulation also requires the Commission to submit a report to the European Parliament by June 2016 along with proposed legislative for regulation of the wholesale roaming market within the EU with a view to eliminating the transitional roaming surcharges by June 2017.

Non-roaming charges for international calls/texts

The European Union roaming regulations only regulate prices while the user is roaming. Prices of calls (and text messages) when calling from your home country to another EEA country are still unregulated, and can be vastly higher than the marginal cost to the telecommunication provider. For example, it costs €0.67/minute to call from Denmark to Belgium via Oister in 2016, and the same per text message. Similarly, it costs £1.50 to call an EEA numbers from the UK while on the Vodafone UK network, vs £0.05 for calling a number in the UK while roaming in France (2016).

The European commission proposed in 2013 to regulate intra-EEA international calls, but it was rejected by the European Parliament and Council.

[In 2013] the European Commission proposed to change this situation. Its proposal for a Telecoms Single Market (TSM) Regulation (COM(2013)627), adopted on 11 September 2013, included a provision whereby providers of electronic communications to the public should not apply tariffs for intra-Union mobile communications terminating in another Member State which were higher than the Eurotariffs for regulated voice and SMS roaming communications established in Regulation (EC) No 531/2012, unless objectively justified (Article 21 of the proposal). This proposed article also provided that tariffs for fixed intra-Union communications terminating in another Member State should not exceed tariffs for domestic long-distance communications.

Territorial extent

European Union roaming regulations apply to the 28 members of the EU and their outermost regions plus the three non-EU members of the European Economic Area (Iceland, Liechtenstein and Norway). The EU countries have applied the roaming regulation since 30 August 2007 while the EEA countries have applied it since 1 January 2008.

The regulations do not apply to Switzerland, despite close relations with the EU in several fields. Charges are considerably higher for EEA residents roaming in Switzerland, and for Swiss residents in the EEA, especially on internet data. Rates vary between €1-€10/MB. The regulations also do not apply to areas which are connected to member states but are outside the EU. Two examples with high rates for visitors are Jersey and Greenland. Despite this, a few UK networks charge for roaming in Switzerland, the Channel Islands and Isle of Man at the same rates as roaming in the EU and EEA.

Common limits

All roaming charges for temporary roaming will be abolished on 15 June 2017 (fair-use rules are to be applied). The tariffs covering the period from 30 April 2016 are maximum surcharges to the price paid in the home network.

Fair use policy

To prevent missuse (i.e. cheaper tariffs available in the eastern members to be used constantly in the western members where tariffs are higher) a fair-use policy was mandated which would allow EU citizens from using their phones while roaming without extra charges for business and leisure, but would still limit the use to prevent missuse and extra costs to mobile operators.

5 September 2016 proposal (retracted)

The initial proposal for a fair use policy has been published on 5 September 2016. It would have limited the amount of free roaming to 90 days in a calendar year and a maximum of 30 consecutive days, after which regulated roaming charges (now in force) would apply. Registering in your home network on a given day would not count that day towards the limit. The proposal also stated that "the customer should nevertheless be able to consume volumes of such services equivalent to at least the average volume consumed domestically by the customers of the tariff plan in question", preventing operators from setting low call/data limits.

However, the proposal was hastily withdrawn just a couple of days after being published. Only a note on the Commission's web site remained: "An initial draft was published on 5.9.2016. The Commission services have, on the instruction of President Juncker, withdrawn the draft and are working on a new version").

The proposal was also slammed by the telco lobbyists (GSMA & ETNO) claiming it would have been "..too complex to implement and unclear for consumers." They were inclined to set the cap lower, believing a "30 consecutive days granted to each consumer within the proposal would have already covered 100% of the needs of the vast majority of European citizens." Also, legal concerns were cited stating that "In Denmark, for example, the maximum length of a contract is six months, so customers would have been able to ‘reset’ their roaming allowance twice a year."

Finally, it was suggested to come up with a new proposal that would be “easy to execute, and effectively prevent arbitrage and distortions on domestic markets” and warning by qoting the Commission that “Otherwise, network quality and investments in new capacity in some Member States could be affected.”

21 September 2016 Press release

A press release issued on 21 September (IP/16/3111) reaffirmed the end of roaming charges in the EU by 2017 stating that "there should be no limits in terms of timing or volume imposed on consumers when using their mobile devices abroad in the EU." The new mechanism, although not defined in detail, "will be based on principle of residence or stable links European consumers may have with any EU Member State." (note the "any" - meaning multiple countries). A stable link is defined as: "work commuters, expats who are frequently present in their home country or Erasmus students."

The final proposal is set to be published by 15 December 2016 following feedback from BEREC, Member States and all interested parties.

Strong safeguards for operators

1) Safeguards against abuses based on residence or permanent links to an EU country (note the singular "an" meaning - one country)

Roaming is for travellers. The new draft allows operators to check usage patterns to avoid the "Roam like at Home" mechanism is abused. A non-exhaustive list of criteria includes:

- insignificant domestic traffic compared to roaming traffic;

- long inactivity of a given SIM card associated with use mostly, if not exclusively, while roaming;

- subscription and sequential use of multiple SIM cards by the same customer while roaming.

In such cases, operators will have to alert their users. Only if these conditions are met, operators will be able to apply small surcharges (the Commission proposed a maximum of €0.04/min per call, €0.01/SMS and €0.0085/MB). In case of disagreement, complaints procedures must be put in place by the operator. If the dispute persists the customer may complain to the national regulatory authority which will settle the case.

Abuses could also be related to the mass purchase and resale of SIM cards for permanent use outside the country of the operator issuing them. In such cases, the operator will be allowed to take immediate and proportionate measures while informing the national regulator.

2) Safeguards in case of exceptional circumstances in the domestic markets:

In case of price increases on a specific market or other negative effects for their domestic customers, operators can get out of the "Roam like at Home" provision allowing them, if authorised by national regulators, to temporarily apply the same small surcharges (the Commission proposed a maximum of €0.04/min per call, €0.01/SMS and €0.0085/MB). Operators will have to provide evidence to demonstrate that "Roam like at Home" was putting their domestic charging model at risk.

Exchange rates

For services paid for in currencies other than the euro, the amount in euro is converted to the other currency using the reference rates published in the Official Journal of the European Union (OJoEU).

After the adoption of EU regulation 531/2012 the retail exchange rate to be used for the relevant year should be calculated by taking the average of the reference exchange rates published in the OJoEU on 1 March, 1 April and 1 May of that year, with the new exchange rate coming into force on 1 July of that year. The wholesale exchange rate however is taken from only the rate published on 1 May of that year.

Method of calculating

As the VAT rates and currencies vary across the EU and EEA, the European Commission publishes price caps in euro and excluding VAT. So the final prices for each country can be calculated by adding the corresponding VAT rate and converting to the currency of the country (if non-euro).

In order to avoid double taxation, non-taxation or the distortion of competition, an EU member state may, in accordance with Article 9(3)(a) of Council Directive 77/388 ("the Sixth VAT Directive"), include within the scope of its national VAT any telecommunications services used within its territory but billed outside the EU VAT area. When opting to do so, it must also exempt from its national VAT any roaming services supplied by home networks within its territory but used outside the EU VAT area. The inclusion of telecommunications within the scope of Article 9 was requested by the United Kingdom, which subsequently enacted the change under Article 19 of the Value Added Tax (Place of Supply of Services) Order 1992. Consequently, when an EU member state makes this VAT exemption, roaming on networks in the Åland Islands, Gibraltar, Iceland, Liechtenstein, Norway, the Canary Islands, Ceuta, Melilla and French overseas departments is subject to the price caps with no VAT applied, because these countries and territories are within the EEA but outside the EU VAT area.

Rounding

The charge limits for the Eurotariff and the wholesale average charge should be calculated to the maximum number of decimal places permitted by the official exchange rate. This sets the maximum that can be charged in the national currency. Providers may wish in practice to quote charges in whole numbers of currency units, especially at the retail level, although this in practice is not compulsory. In this case, the numbers should be rounded down. Rounding up of these numbers to above the level of the relevant cap is not permitted under any circumstances.