This is why we need low wholesale prices for roaming
The European Parliament and the Member States approved the end of roaming charges within the European Union by 15 June 2017.
For that abolition to happen new rules for the wholesale price – the price which operators charge each other for customers roaming in another European country – must be introduced.
The mobile internet needs to be accessible and inexpensive everywhere in the EU. Of this, everybody agree.
To achieve this, we need low wholesale prices. Europe’s consumer organizations from North to South and East to West agree that low wholesale prices benefit first and foremost the consumers.
The Parliament proposed to start with a maximum wholesale price cap of 4 Euros/GB for 2017. This cap would then decrease by 1 Euro/GB every year until it reaches 1 Euro/GB in 2021.
This is more than enough for efficient operators to cover real costs already today. Not only have the data prices in Europe been going down for consumers, but the wholesale prices operators pay to each other decreased by almost 40 per cent every year during this decade.
The price proposed by the Council was significantly higher. It would start from 10 e/GB, decrease and end up with 5 e/GB in 2022. Negotiations between Parliament and Council started in December and will continue again today.
The higher wholesale prices have been pushed by the operators who fear they will lose an easy source of extra money from their customers.
However, since the Council and The Parliament made their proposals for the wholesale prices, a Fair Use Policy has been introduced. The Fair Use Policy or FUP for short was created to protect the national markets from unfair competition from other member states and cheapest mobile operators from big losses.
The operators were concerned about the deals in which they offer unlimited data usage for a fixed price.
For example, say the consumes pays 25 e/month for unlimited data usage. Let’s say she travels to another EU country and uses 10 GB of mobile data there.
If the wholesale price would be 10 euros per GB as the Council proposes, the cost for the operator would be 100 Euros. This is of course unbearable.
To prevent these losses for the operators, the FUP now dictates that the customer can use as much data as she can get with the fixed price she pays.
If the wholesale price will be high, the customer will get very little data. With wholesale price 10 e/GB, the whole 25 euro would buy her only 2,5 GB. On the other hand, wholesale price of 4 e/GB would mean she’d get 6,2 GB of mobile data and both of the operators would still cover all costs.
Some countries, for example Germany, have been pushig wholesale prices which are higher than consumer prices in many countries. This is not in line with the principle of Single Market for Services.
Lower wholesale price means more data for the customer. The Parliament will think about what’s best for the consumer and therefore push for low wholesale prices.