European roaming: 300 million extra customers for telecoms companies when roaming charges end, survey shows
Posted in: Mobile & Wireless at 18/02/2014 09:11
94% of Europeans who travel outside their home country limit their use of services like Facebook, because of mobile roaming charges, according to a new survey of 28,000 EU citizens. The European Commission calculates that telecoms companies are missing out on a market of around 300 million phone users because of current pricing strategies, with negative effects for other businesses such as app makers.
At the same time as booming use of mobile at home, especially use of mobile data, other effects of roaming premiums include:
- 47% would never use mobile internet in another EU country.
- Only 1 out of 10 would use e-mails in the same way as at home
- More than a quarter of us simply switch off our mobiles when we travel in the EU
- Millions divert to SMS rather than pay for calls
Frequent travellers - the most lucrative section of the potential market - are more likely to switch-off their mobile phone data roaming capabilities than the occasional travellers. The Commission believes this is because frequent travellers are better informed about the real costs of data roaming in Europe than less frequent travellers.
European Commission Vice President Neelie Kroes said: "I am honestly shocked by these figures. It shows we have to finish the job and eliminate roaming charges. Consumers are limiting their phone use in extreme ways and this makes no sense for the companies either."
"It's not just a fight between holiday-makers and telecoms companies. Millions of businesses face extra costs because of roaming, and companies like app makers lose revenue too. Roaming makes no sense in a single market - it's economic madness."
While Europe's app economy is booming (IP/14/145), barriers like roaming charges put a brake on parts of this new sector. Travel guide, photo and map apps are particularly negatively affected.
And consumers are not just limiting their mobile use when abroad. At home, 70% of people who call other EU countries limit these calls for cost reasons.
Calling in the EU
The survey commissioned by the EC shows that 28% of those who travel in the EU switch off their mobile phone when going to another country. Only 8% of travellers use the phone abroad in the same way as at home making a phone call. 3 out of 10 never phone when being on a trip in another country.
Texting better than calling
There are marginally more people texting than phoning when going to another country: 2 out of 10 would text while abroad in the same way as in their home country. The survey shows that a quarter of travellers never text when going to another EU country.
No mobile Internet abroad
The numbers for mobile Internet abroad are even more catastrophic. Majority of respondents: 47% would never use e-mails and social media in another EU country. Only 1 out of 10 would use e-mails in the same way as at home and only 1 out of 20 would use social media in the same way as at home.
Moreover, the frequent travellers are more likely to switch-off their mobile phone data roaming capabilities than the occasional travellers, with 33% and 16% respectfully. The survey suggests that this difference is so big because frequent travellers are better informed about the real costs of data roaming in Europe, than those who travel less.
At the same time, thanks to existing roaming regulations and due lower prices, we have seen an astonishing 1500% increase in data roaming use across the EU since 2008. Taking into account that also at home the overall uptake and enjoyment of mobile data services is increasing, the fact that many users are restraining themselves underlines a worrying trend towards a missed growth opportunity in the emerging App economy as well as for mobile operators.
EU telecoms services - affordable for all
The Commission's Connected Continent legislative proposal (MEMO/13/779) asks the European Union's legislators (European Parliament and Council) to achieve a Single Market when making a phone call or browsing the Internet. The aim is to achieve a combination of regulatory obligations and market incentives which will induce mobile operators to extend their domestic plans/bundles so that by 2016 at the latest, customers throughout the Union are able to use their phones and smartphones at domestic rates while travelling throughout the Union ("roam like at home"). Under rules adopted in 2012, customers will also have the right from July 2014 to leave their domestic operator when travelling and take cheaper roaming services from a local operator in the visited country, or a from rival roaming provider in the home country, without changing their SIM card.
The aim is: create a true European communications space by phasing out and eliminating the difference in charges paid for domestic, roaming and intra-EU calls.
Recent price cuts
The roaming problem was even bigger some years ago before the EU introduced price caps in 2008. Since then consumers have seen:
- 80% retail price reductions across calls and SMS
- Data roaming is now up to 91% cheaper
In France consumers are now benefiting from the widespread ending of roaming premiums, showing it is possible for companies to offer phone plans that work everywhere in the EU for a single price.