How could a UK exit from the EU affect the telecoms sector?

As a British national living in France, the debate around whether or not the UK should leave the European Union is a subject of considerable interest and concern. Now with just over a week left until the referendum on Jun. 23, both the "in" and "out" camps are stepping up their campaigns and continue to make wild claims and assertions about what will happen should the UK leave or remain.

As many of the more phlegmatic observers note, no one really knows what will happen whatever the outcome of the referendum turns out to be. Certainly, if the UK does leave then everything is up in the air as the country moves into uncharted waters. Of course, the UK has plenty of experience of life outside the EU, but comparing life now to life in the 1960s or even 1970s is like comparing your old black and white TV set with the latest premium smartphone from the likes of Apple or Samsung. In other words, life is not the same -- not even close.

That also applies to the telecoms industry generally -- not least given the efforts by the EU in recent years to create a digital single market (DSM), including a harmonised spectrum policy and the eradication of mobile roaming charges. If the UK is no longer part of the EU, and if negotiations about its access to the overall single market do not go well, then all of those benefits could be lost.

Indeed, two analyst companies have produced reports in recent days looking at this very issue. The Economist Intelligence Unit (EIU) explored the impact that a UK exit could have on various industries including the telecoms market, and came to the conclusion that regulation and roaming charges would be the two key areas to watch.

The EIU points out that Ofcom and the Competition and Markets Authority (CMA) are just as opposed as the European Commission to a reduction in the number of mobile network operators from four to three. However, it adds that whether the UK would be able to fully benefit from the DSM will depend on its ability to negotiate an amended free-trade agreement with the EU, to enable it to continue trading on favourable terms.

"Whether this can be successfully negotiated is unknown," the EIU said. "But it is on the issue of roaming charges that the impact on the UK market will be most keenly felt."

CCS Insight also cited a report from the Association of British Travel Agents and Deloitte that suggested UK consumers could suffer from higher roaming tariffs should they vote to leave the EU in this month's referendum.

As things stand, roaming charges are due to be abolished across the EU from June 2017. If the UK leaves the EU, it would no longer be accountable to these regulations. Even if UK politicians suggest that they would seek to follow the guidelines, nothing is guaranteed.

Certainly, UK operators such as Three UK, iD, Vodafone and others have started to include roaming within their price plans at no extra charge. Could their attitude change following a UK exit -- or Brexit, if you must -- from the EU? Again, no one really knows.--Anne

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