Just last month, the European Union (EU) brought into force new limits for roaming charges within all member countries. The result is a significant reduction in the amount mobile service providers (MSPs) can now charge their customers for making or receiving calls abroad.
The change will also bring down the cost of accessing the Internet. This will come as welcome news for most smartphone users, allowing them to access those all important social media apps when on vacation and preventing the unpleasant experience of subsequent “bill shock” on their return.
For the past six years, the EU has been forcing prices down by placing a cap on the charges mobile service providers can impose and reducing that limit each year. The latest cuts will see the maximum cost of making a call fall by almost a fifth, to 24 euro cents a minute. But the biggest change is to data charges – the cost of using the Internet or applications which use a mobile service providers’ data network. That will fall by roughly a third, to 45 euro cents per megabyte.
This spells good news for countries like Croatia, soon to become EU members. Just last year, someone within the country who was checking their social media accounts every day, for half an hour a day, for the duration of one week, would run up a bill of over 200 euros. With the new roaming charges rules that will soon be enforced, that will drop close to 90%, to 15 euros.
However, note that these reductions will only apply within the borders of the European Union. In other countries, charges both for making calls and for using the Internet will continue to remain high and, most likely, be out of the budget of most consumers.
So how will this impact the mobile service providers themselves? You would think that, based on such a drop in related charges, their revenues or margins would be hit significantly. To a certain extent that may well be true, but expect this to be offset by an increase in the number of consumers now willing to actually utilize roaming services.