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Now you can 'roam like at home' within the EU, but what's the catch?

And what about Brexit, huh?

Woman with shocked expression answers cellphone. photo by Shutterstock

From today people will be able to spend more time gazing at their phones while on hols rather than looking at the sights as roaming charges in EU countries are abolished.

Travellers can now call, text and use their mobile data at no extra cost, regardless of the EU country they're visiting.

But there appears to be some confusion as to which countries are affected, what the ultimate impact of Brexit will be and the extent of the overall cost savings.

Luca Schiavoni, senior analyst at Ovum, believes the benefit to consumers is less clear than it may first appear.

He said there will inevitably be some cost to operators. "So the prices of other services could go up to offset the revenue loss. Previously when charges decreased each year, operators put the price of non-EU countries up."

One case in point is the example of Giffgaff. Customers holidaying in tax havens such as the Channel Islands or the Isle of Man will be charged £1 per minute – up from the current 0.5p rate – as they they are non-EU countries.

The company said: "I know this isn't ideal for people who are going to areas... Unfortunately the costs just don't add up otherwise. It's a very delicate balancing act between how much benefit people get and whether it's something we can sustain."

Analyst firm Juniper Research has estimated that globally mobile operators made $21bn (£19.4bn) in 2016, with that figure expected to plummet to $12bn (£12.4bn) next year. In 2015 UK mobile operators made $3.8bn (£2.7bn) in roaming revenues, out of total sales of $26.3bn (£18.4bn).

It therefore seems likely that operators will hike their fees in some other way to offset this loss.

Windsor Holden, analyst at Juniper, said they may try and make it up in domestic tariffs or international calls. "If you look at operator margins, there has been a 1-2 per cent decrease per annum over the last five years, so they have been feeling the squeeze for sometime."

Virtual problems

There has also been concern that the changes will put small providers at a disadvantage. Mobile Virtual Network Operators may be in a weaker position to negotiate deals with operators in other countries because they don't have direct access to the spectrum.

"The fear is that to compensate when they can't negotiate a good deal they will become less competitive in the domestic market and respond by putting up prices elsewhere," said independent analyst Matt Howett. "While [today] looks set to be a day of celebration, this will be one area Brussels will be keeping a watchful eye on."

Representative body MVNO Europe said more needs to be done by the regulators to address these concerns. Vice-president Innocenzo Genna said it is not just the issue of a lack spectrum but MVNOs are frequently smaller, which makes it harder for them to compensate the costs compared with the larger operators.

"Reducing wholesale caps is a simple measure that works to enable all operators to compete," said Genna. "We are in favour of the Roam like Home, what we are objecting to is the mechanism, which creates an imbalance between big and small operators."

Au Revoir

The other big unknown, of course, is Brexit. "It is currently unclear how Brexit will play out, what it will mean. If the UK becomes non-EU country roaming could be unregulated in which case we are back to square one," said Schiavon.

However, Howett said if the UK remains in the single market, the changes to roaming will still apply. "The UK government's position prior to election didn't seem to favour staying in the single market, but after the results of the election, that may change. The UK was one of the driving forces behind this legislation, so I would imagine there is a strong political will to ensure it continues."

But it also appears that Brexit talks are also bewildering Brits, with 25 per cent believing that the UK isn't part of the European Union, according to a survey of 2,000 consumers by Carphone Warehouse about the roaming fees.

(This confusion stretches into culture too, with 12 per cent thinking that only countries in the EU can compete in the Eurovision Song Contest.)

A number of the good folk of Blighty are also a little hazy as to which countries are in the EU – Norway (35 per cent), Switzerland (31 per cent) and Iceland (27 per cent) top the list for European countries incorrectly thought to be members.

And even for those who are more up to speed on their geopolitical geography, from August it will cost more to roam outside EU countries.

Ernest Doku, telecoms expert at uSwitch.com, said: "Consumers should also keep in mind that, as announced by Chancellor Philip Hammond in March this year, roaming charges for countries outside of the EU will incur 20 per cent VAT on top of normal network rates from 1 August 2017," he said.

As always, it will pay to do some research. ®

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