Polish Minister: Roam-Like-at-Home Will Hurt Telecom Market

According to Anna Strezynska, Poland’s Minister of Digitization, implementing the roam-like-at-home regulation, in keeping with European Commission regulations taking effect this month, will bring difficulties in Poland. The large proportion of plans that include discount prices and generous service allotments will cause mobile operators to lose money, Strezynska said in a media interview.
 
Referring to Orange Poland, which has already implemented the roam-like-at-home principle consistently, she suggested that the operator, being part of a large international telecommunications group, has the option of cross-subsidizing roaming services. However, its competitors, P4 and Polkomtel, as well as at least two networks operating only on the national market, have no such capability
 
Strezynska also said that a relatively small group of users in Poland benefits from roaming services, while the majority will end up subsidizing these services in order to meet the European Commission’s requirements. This cannot be allowed, said Strezynska and continued: “For many years, we have been fighting for low prices in Poland,” she said, adding that she will be having talks with the European Commission to seek a solution to the roaming issue.
 
The long-heralded end to roaming surcharges in the EU, which is set to begin this month, clearly will be experienced differently in different member states. Widely touted by EC officials as an unmitigated boon to consumers, roam-like-at-home will definitely not be a gift to operators, and the impacts will obviously differ depending on the nature of the national market in question.
 
A report from Ernst & Young Poland has presented the findings on the effects that implementing the roam-like-at-home principle would have in the country. The firm estimates that the disparity between roaming and domestic rates will cost the average Polish operator around PLN 180 million (US $21.5 million) in revenues through limited consumption and around PLN 55 million (US $14.8 million) in EBITDA because of higher costs. According to EC data, the differences in wholesale rates, combined with the roaming use profile of the typical Polish subscriber, mean that Polish mobile networks will record losses from roam-like-at-home.
 
Despite all this, the time for arguing and negotiating with the EC is likely over. Polish operators—as well as operators in other markets, no doubt—will simply need to come up with creative pricing strategies to offset these losses. 

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. 

To learn more about Tarifica, please visit www.tarifica.com 

European Parliament Passes Net Neutrality, End to Roaming

The European Parliament has approved the Telecom Single Market legislation, opening the way to ending roaming charges starting in mid-2017 and protection for net neutrality across the EU. The member states approved the text without any amendments to the legislation approved by the EU Council, allowing the bill to become law after its publication in the coming days. Under the new law, mobile operators will no longer be able to charge users extra for calls, texts or data when they are roaming in the EU and European Economic Area (EEA) countries starting 15 June 2017. The concept of “roam like home” will be introduced gradually starting 30 April 2016, when customers will pay the same as for national communications when roaming, plus a small surcharge. The surcharge will be capped at 5 cents per minute for calls, 2 cents per SMS and 5 cents per MB of data. The cap on charges for incoming calls will be determined later this year and is expected to be considerably lower than for outgoing calls. The new law also sets a common standard for net neutrality throughout the EU. Internet providers will be required to treat all traffic equally, with no blocking or slowing of any content, applications or services from selected senders or to selected receivers. The only exceptions allowed are compliance with court orders and laws, preventing network congestion and combating cyber-attacks. Operators may still offer “specialized” services, such as guaranteed speeds or quality for specific customers like businesses, as long as this does not affect the overall internet quality for all users on the network. It appears that after several false starts and over-optimistic promises, roaming will really, finally come to an end in the EU. Not surprisingly, it embodies numerous compromises that reduced the original ambitions of the anti-roaming advocates, but nonetheless the Telecom Single Market legislation represents a real sea change in the way mobile service is charged for across borders. We feel that the EU’s decision, essentially taken in response to massive public dissatisfaction with the concept of roaming charges, presages similar changes in other regions across the world. In emerging and less-prosperous markets, at the present time, operators in general can ill afford to change the structure of termination fees, but we believe that in time, as these markets develop, it will become more feasible. And with market development will come greater impatience on the part of consumers at having to pay roaming charges. In some ways, the EU Council’s agreement can be seen as a victory for operators. The original proposal in April 2014 had called for an end to roaming in December 2015 and much stricter net neutrality rules. Pressure from operators scuttled that effort and led to another year of negotiations before the current formulation was approved. As far as net neutrality is concerned, the operators’ association ETNO issued a statement after the vote, saying it supports of uniform rules across the EU rather than a patchwork of national regulations, as has been the case with net neutrality to date. However, it said that enforcement was necessary for the legislation to be successful. In particular, the operators are concerned about the extent to which it will be possible to develop new, differentiated services, such as connected driving, e-health and innovative content distribution models, while abiding by the net neutrality rules.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. To learn more about Tarifica, please visit www.tarifica.com

EU Confirms Roaming Rate Cuts Starting in July

The European Commission has confirmed its new cuts in mobile roaming rates, which will take effect starting 1 July 2014. The cost of making a call when traveling in the EU drops 21 percent to €0.19 (US $0.26) per minute; the cost of receiving a call falls by 28.5 percent to €0.05 (US $0.06) per minute; SMS costs decrease 25 percent to €0.06 (US $0.08) per text and data services fall by 55.5 percent to €0.20 (US $0.27) per MB. (All prices exclude VAT.) The rates are now down 80 to 90 percent from when the EU first started regulating prices in 2007. Proposed legislation would see roaming surcharges eliminated entirely beginning next year; operators would be required to charge the same prices as they do in their home markets.

The size of these cuts shows that the EU is serious about dialing down roaming within its borders. The rate reduction for data use, at 55.5 percent, is particularly significant, not only for the generosity of the amount but because of the increasing importance of data services for those traveling abroad. The falling rates may have the effect of increasing subscribers’ use of roaming services and thereby offset mobile operators’ losses to some extent. However, the writing on the wall could not be clearer: Now is the time for MNOs to find replacements for a revenue stream that will almost certainly run dry in the near future.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx