Debate Magazine

Roaming Charge Fun.

Posted on the 17 June 2017 by Markwadsworth @Mark_Wadsworth

From the BBC:
A European Union (EU) law to abolish roaming charges for people using mobile phones abroad comes into force today [15 June 2017]. The new rules mean that citizens traveling within the EU will be able to call, text and browse the internet on mobile devices at the same price they pay at home.
I'm always wary about govt intervention in such matters, but in this instance, fair play to the EU, I can't see a downside.
We know that the price which people are willing to pay exceeds the actual cost of the satellites, or else mobile companies would not be prepared to pay such huge amounts of money for the radio spectrum. The surplus is 'unearned' income or rent. The question is, who gets the surplus - best is the government (as license fees, quasi LVT); next best is the consumer (via capped prices) and worst is letting private companies collect it.
This has been a long time coming, from The Guardian, three years ago:
Roaming charges for using a mobile phone abroad will be abolished from December 2015 in proposals expected to be voted through the European parliament on Tuesday, but operators have warned that bills could rise domestically to pay for the change...

... a coalition of networks representing 45m consumers has warned that the legislation is so badly designed that the cost of domestic calls could rise to pay for it.
"There is a risk that domestic tariffs for European consumers will increase," according to the roaming coalition. "Roaming might not be subject to surcharges anymore, but the overall level of tariffs would increase, and non-roaming customers might effectively foot the bill for roaming customers."

Yeah right. We've covered that - prices are set by what consumer is willing to pay, not by costs. Domestic users are prepared to pay £x and not a penny more. They don't care what other people pay and for what.
The mobile companies have had years advance warning that this would happen, so if they are right, they would have been nudging up prices in anticipation. Have they?
Nope. Prices have been drifting downwards for years, see recent Ofcom report.
Disclaimer - I've no downer on mobile phones and mobile phone companies, they are brilliant. While they share a monopoly, between themselves they appear to be highly competitive. It's the landline people who take the piss.

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