High international mobile roaming charges affect a minimum of 147 million EU citizens, 110 million business users and 37 million business travelers and tourists. Virtually every company with employees that travel overseas has managers that can tell stories of receiving wireless phone bills of $1,000 or more for employees that travel overseas. On July 1, the cost of roaming on another carrier’s network was cut in the European Union.
This second cut reduces the roaming charge by approximately 7.5 percent for roaming charges by subscribers calling within the 27 countries of the European Union. Now, the maximum price for making a mobile call roaming on another telecom carrier’s network will fall from EUR 0.43 to EUR 0.39. (This would be from 0.54 U.S. to 0.50 U.S.) The cost excludes the Value Added Tax (VAT). Receiving a call will cost at most EUR 0.15 per minute down from EUR 0.19 (This is 0.19 from 0.23 in U.S. currency.)
EU Data Roaming Charges Cut by Nearly 20%
In addition, wholesale prices for data roaming have been cut to EUR 0.80 per MB from EUR 1 (A cut of 1.01 U.S. from 1.26 U.S.) Under this arrangement, most mobile phone operators in Europe are still charging close to the highest roaming fees allowed under these price caps. Travelers using roaming services in 2009 paid on average €2.66 (3.35 U.S.) per downloaded megabyte for data while roaming, while operators charge each other just 55 (0.64 U.S.) cents per downloaded megabyte. The discrepancy suggests operators are pocketing the difference, €2.11 ($2.66 U.S.), as profit.
Under these new caps, European mobile operators will now also be required to set data roaming spending limits for their customers. Operators will have to send users a warning when they reach 80 percent of their data-roaming bill limit. The default amount is EUR 50 (0.63 U.S.) per month, although customers can choose to set a different level or opt out of the cap. Once the billing limit for data is reached, the carrier will need to cut off access to the data service. In the U.S. AT&T has a similar program where it uses text messages when subscribers reach 65 percent, 90 percent and 100 percent of the threshold, but they do not plan to cut service after subscribers reach the cut off.
These new caps on consumption focus on data services. Employees may still return from overseas travel with shocking bills for wireless voice services. Due to the timing of monthly bills, managers may still see employees racking up high roaming charges that are spread over different billing cycles. It is also important to remember that these charges only affect roaming charges within the 27 EU countries.
On balance, the EU measures will help to reduce some “bill shocks” and cut expenses associated with roaming. However, managers of mobile programs should be prepared to deal with unexpected consequences from other aspects of this EU regulation. In particular, mobility mangers now need to be prepared to deal with employees who have had their service cut off after reaching spending limits. Alternatively, they can arrange to opt out of the cap, but this seems like a risky approach.
These changes in roaming charges highlight the value of Telecom Expense Management and Wireless Expense Management programs. It is critical for managers to have systems that flag billing errors and identify opportunities for cost savings. Companies will benefit from having automated reports that allow managers to flag the largest spending so managers can get employees on the right plans for international travel. The European Union is trying to protect consumers from bill shocks and runaway expenses, but a good TEM/WEM program can go further.
