The big news item today is the ban on mobile roaming charges in the EU, which was voted through today and will see roaming charges in the EU banned from 15th June 2017. Rightly this is a triumph for mobile phone users throughout the EU, and especially those who live in border areas which have conflicting signal strength which has led to bill shock situations in the past. Providers will no longer be able to pass on connection charges from that date, although there is an interim cap period from 30th April 2017 where operators will be able to charge no more than:
– €0.05 per minute extra for roaming calls
– €0.02 for each SMS sent
– €0.05 per Mb of data used
Now while it might seem ideal that you won’t have these extra charges to worry about when on holiday, there is going to be a significant impact on the operator profits. That isn’t something they will take lying down. It is very likely that the cost of a standard contract will increase over the next few years to a point where the loss of connection revenue is irrelevant. And that is going to affect you directly. That £30pm contract you currently have is likely to become £40pm within a relatively short space of time.
Mobile operators will hope that people continue to buy new contracts. They make very little money from the service plan (and less after this ruling) but manage to get you to pay extra for a flashy handset, at interest rates which allow them to offset the small gains made on the service plans. I would expect that this business model will be aggressively pursued to keep shareholders happy.
So is there a way to combat any increase?
Well I believe so. Buying your handset outright is a much better option financially. A reasonably specced large screen 4G smartphone running the latest version of android can be bought for as little as £50 sim free, which means that you only need a sim package to get up and running. There are some notable players in this market such as Giffgaff and the more recent (and untested at this point) FreedomPop who offer a free sim with free calls, texts and data.
So while it might seem that the abolition of roaming charges is a fantastic deal for consumers, it might only be a short term benefit. It might be worth looking at the longer term to see if really does save you money!