EU's Kroes unveils plan to end roaming fees in 2014

The European Union's digital commissioner, Neelie Kroes, unveiled plans to end mobile roaming charges in Europe by 2014 and bring about net neutrality across the Continent, as she pressed ahead with her vision for a single telecoms market by next year.

In a strongly worded speech delivered as a letter to MEP Malcolm Harbour, the chairman of the Committee on Internal Market and Consumer Protection, Kroes said the plan is to develop a "radical legislative compromise" in order to deliver a full and final package around Easter 2014, which falls on April 20 next year.

With European Parliamentary elections due in 2014, Kroes also used her speech to emphasise the importance and relevance of the European Union at a time of great fragility for the bloc, largely due to economic problems in the eurozone. She highlighted that the introduction of mobile roaming caps has already been one of the more popular EU policies among consumers-- and committed to taking this further still by eradicating "artificial" borders for telecoms services.

"I want us to show citizens that the EU is relevant to their lives. That we made the digital rules catch up with their legitimate expectations," said Kroes. "I want you to be able to go back to your constituents and say that you were able to end mobile roaming costs. I want you to be able to say that you saved their right to access the open internet, by guaranteeing net neutrality."

Kroes later tweeted: "I want EU 2 end mobile #roaming costs in #EU. I want EU 2 save the right 2 access open internet by guaranteeing #netneutrality Do u agree?"

The move is not going to come as welcome news to operators, which have already suffered the effects of declining roaming revenue. The Financial Times quoted Jeremy Dellis, analyst at Jefferies, as saying: "If you cut voice roaming fees, there is likely to be a material effect on profitability as this is a high-margin revenue stream."

As an example, the paper noted that roaming fees accounted for about 5 per cent of Vodafone's European service revenue of $28.4 billion (€21.9 billion) last year, and Jefferies analysts said that Vodafone's roaming revenues are broadly in-line with the industry average, although some operators such as Telekom Austria are more reliant on their roaming fees than others.

Despite the headline comments on roaming and net neutrality, which is currently only in force in the Netherlands in Europe, a report from Reuters said that, according to unnamed sources, Kroes' plan falls short of what had been telecom bosses and industry groups have pushed for, including the European operators' association ETNO. For example, Reuters said the idea of a single regulator instead of 27 national-level bodies has been dropped, as have pan-European mobile licences instead of national ones.

Nevertheless, Kroes' speech comes at an opportune time, as a separate report from the GSMA issued on the same day said Europe now lags far behind the United States in the deployment of next-generation mobile technologies.

"While there are several factors leading to this divergent performance, it can be partially attributed to the relatively inefficient structure of mobile markets in Europe," Jeffrey Eisenach, managing Director at Navigant Economics, which conducted the study for the GSMA, said in a statement. "EU regulatory policies have resulted in a fragmented market structure that prevents operators from capturing beneficial economies of scale and scope and inhibits the growth of the mobile ecosystem."

For more:
- see Neelie Kroes' speech here
- see this Reuters article
- see this FT article (sub. req.)
- see this GigaOM article
- see this GSMA release

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