Roaming fee reduction brings opportunities and risks to telco industry
Responding to news that charges have been halved for surfing the internet, or making and receiving calls, whilst roaming in the EU, KPMG’s Sean Kennedy argues that whilst consumers will benefit from lower bills, there is a risk that they may also face mixed service levels, as operators have less money available to upgrade networks across Europe.
A director in KPMG’s UK Telecoms Regulation team, Sean says: “When it comes to totting up the cost of this year’s summer holiday, consumers are likely to welcome a reduction in roaming fees. However, their delight could well turn to frustration in years to come as, with fewer funds available, operators may struggle to improve infrastructure across Europe, meaning the user experience is likely to fluctuate as they cross borders.
“Eventually, the plan is to abolish roaming fees completely. If this does happen and the differentials between national and international rates are removed, there may be little to stop UK customers from switching their existing UK operator to one in another member state offering a cheaper price per minute or megabyte. In this respect the ‘freedom to roam’ may give customers more choice, but it also raises questions about how the industry will cope in an environment where the link between cost and price is broken. It will be crucial that any future regulation is carefully structured to take in to account the economic incentives to invest.”
