European operators increase roaming prices

The decision to end roaming charges in the EU means that the European operators will raise tariffs for their foreign counterparts, forcing them, in turn, to transfer the costs to their clients.

Employees of Russian mobile operators told Vedomosti business daily that the end of roaming charges for the EU residents will have a negative impact on mobile subscribers from other countries traveling throughout Europe, Russian citizens included. Last year, the European parliament adopted a law seeking to end roaming charges within the bloc’s countries from June 15, 2017, onward. To offset the decline in roaming earnings, the European operators are raising the so-called surcharge — an additional fee for operators working outside of EU, charged to complete the calls within their own networks. Such step has already been made by mobile operators in Austria, Bulgaria, Croatia, Estonia, Finland, France, Germany, Greece, Hungary, Italy, Latvia, Lithuania, Poland, Portugal, Slovenia, and Spain.

An employee of one of the Russian operators told the daily that his company has been paying this surcharge since the beginning of the calendar year, while an employee of another operator says that agreements with the European operators had to be changed this summer. As a result, the cost of each call for the Russian operators has gone up from 1-2 euro cents to 15-20 euro cents per call; sources told Vedomosti.

In response, the Russian operators could raise the cost of calls, outgoing from Europe, but, according to the latest data, the ratio of incoming vs. outgoing calls in roaming is seriously skewed towards incoming, which means that the existing call balance disfavors the Russian companies. In order to compensate for the losses, the Russian operators will have to raise the roaming prices in Europe, the paper’s sources said: the greater part of all costs (60-70%) is made up of the fees to foreign partners. The paper’s sources found it difficult to estimate the size of the upcoming price hikes and didn’t wish to talk about their additional expenses on setting up the roaming procedures.

According to preliminary calculations by CEO of Telecomdaily research company Denis Kuskov, the operators may be forced to spend over 150 mln euros on setting up new roaming procedures. These calculations were done on the basis of data provided by the Ministry of Communications, on roaming traffic data from mobile operators, and on company’s own information on the ratio of incoming and outgoing mobile traffic in Europe.

Kuskov believes that the changes in mutual payments will have the biggest impact on additional options, such as the call packages that allowed mobile subscribers to take up to 40 minutes of incoming calls for a set sum of $1-1.8 a day. The analyst believes that the number of available call minutes in such offers will be reduced, while the price of packages will grow.

One of Russia’s Top 3 mobile operators, Megafon, had confirmed the changes in inter-operator payments. The company’s representative said that the majority of its European roaming partners had already updated their partnership terms for 2017, while others are in the process of updating them

The inter-operator fees that the European operators charge their Russian counterparts have grown by ten times or more on average and this has a clear impact on the self-cost of international roaming calls. Megafon’s rep said it’s difficult to forecast the consequences, but claimed that the operator will continue to offer Russia’s cheapest roaming services.

brexit-400x262European subscribers should be prepared that mobile carriers outside of EU will rise as well roaming prices for them. So from now, they could pay more for data and voice during trips in Brasil, Dubay or any other country outside the European Union.

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