With the new regulation, also known as the Eurotariff, roaming in the EU will become cheaper starting April 30, 2016, and will be completely eliminated by June 15, 2017. Transatel, a stakeholder in the European telecoms market since 2000, remains an industry pioneer. Jacques Bonifay, Transatel CEO and President of MVNO Europe and Alternative Mobile, highlights the advancements and drawbacks of the new regulation.
Transatel Mobile remains a leader in EU roaming
For the past 15 years, Transatel Mobile has offered mobile packages to answer the needs of border dwellers and commuters to help them avoid high roaming costs. As an example, Transatel Mobile offers mobile plans that bundle calls and texts to be used interchangeably nationally, internationally or within Europe. Transatel Mobile doesn’t apply roaming surcharges on the national price for these communications. For mobile internet, European regulations permit a surcharge in addition to the national price capped at +6 cts € per megabyte (incl. VAT). Transatel Mobile has chosen to only apply a surcharge of 4 cts € (incl. VAT).
Although European travelers will benefit from these new rules, Jacques Bonifay points out that this regulation could potentially have several undesirable effects. These include increased complexity for consumers who may have trouble understanding the fine print attached to the new offers, a decrease in competitors in the telecoms market and a long-term risk of increased national prices.
Increased complexity for consumers
According to Jacques Bonifay, “Operators will have to build new propositions around the notion of “fair use” that will be more complex and difficult to decipher. Consumers will have to be more keenly aware of the limitations within their mobile plans.”
The Eurotariff could potentially weaken the competitive landscape
On April 30, 2016, the European legal regulation will lower retail prices without imposing any reduction of wholesale prices for roaming.
Jacques Bonifay, CEO of Transatel, and president of MVNO Europe and Alternative Mobile states, “Inevitably, it is going to produce a margin squeeze for mobile virtual network operators (MVNOs) and small operators. Large operators, because of the market structure and their bargaining power, will be able to protect themselves against the increase in pressure. The most vulnerable operators, however, will be weakened, even though they are aggressive in terms of pricing and have been the most innovative in the market. The EU Commission intends to examine the regulated wholesale prices to gradually lower them over a period of 14 months (July 1, 2017). It is feared that the reduction will not be sufficient, and will affect, in the long-term, the most dynamic players in the market.”
A risk of increased national tariffs
On the of subject of national tariffs, Jacques Bonifay states, “Due to the end of roaming charges, some operators in Europe, notably those who provide the most aggressive prices, will suffer a loss of gross margin. Given the necessary investments for 4G and, soon, for 5G, an increase, or at least a slowdown in the reduction of national tariffs is to be feared. This might mean that the reduced roaming charges of those who travel, who are arguably wealthier, could be offset by those who do not travel abroad, and are perhaps less well-off.”
In the months to follow, Jacques Bonifay, as the representative of European MVNOs, will closely monitor wholesale prices to ensure the new regulations do not damage innovative actors in the market. Meanwhile, Transatel Mobile will work to maintain its status as industry forerunner, dedicated to satisfying consumers by providing clear and flexible services.
Key facts about the new EU roaming regulation
The EU adopted the EU roaming regulations October 31, 2015. By the end of April, a new regulation will be instated that ends roaming charges in Europe by June 15, 2017. All calls, SMS and data sessions initiated while traveling in the EU will be deducted from the local mobile bundles from travelers’ home countries, without extra charges but with a “fair use” limit. The details of the fair use limit are still being defined by the European Commission.
During the transitional period between April 30, 2016, and June 15, 2017, the new European regulation authorizes operators to charge a small additional amount to domestic prices. This surcharge is capped at +5 cts € per minute of call made, +1,14 cts € per minute of call received, + 2 cts € per SMS sent and +5 cts € per MB of data (excl. VAT).
For the past 15 years, Transatel has been offering, through a technical platform and associated services, a solution helping a diversity of players meet their market for mobile telephony and data connectivity. The company is positioned either as an enabler of mobile services in a BtoB context (Mobile Virtual Network Enabler), acting as third party and adapting to multiple business models, or as a mobile operator (Mobile Virtual Network Operator) with a BtoC retail activity.
Transatel’s 5 areas of expertise (MVNO, MVNE/A, Machine-to-Machine, embedded connectivity, and multi-local data connectivity) cover the extent of possible airtime offerings, currently delivering connectivity to over 1.7M SIM cards. With 70% of its revenues generated abroad, the 180-strong company is established in France, the UK, Belgium, Luxembourg, Switzerland, the Netherlands, and the United States.
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