MVNOpro has explained how the new Eurotariff does not represent an end to roaming billshock in Europe. (see The truth about roaming billshock) However, as the tariff settles in, it’s becoming apparent there are even more causes of confusion and potential billshock for customers.

Another potential cause for billshock, for example, is that buried in amongst the terms, conditions, caveats and sub-clauses.  If mobile operators can prove that it is likely that their revenue losses would be upwards of 3%, they can apply to opt out of the new regulation.

In Finland, the regulator Ficora, has taken a supportive stance towards operators, granting exemptions to DNA, Telia, Elisa and Moi Mobiili, which means they can still charge extra for roaming. This is because they have successfully argued that an end to European roaming charges will hike up domestic tariffs because they will have to pay out considerable sums to foreign operators.

Their logic for this position is as follows. Finnish customers are data hungry and pay very low prices for data – an average of EUR0.67 per gigabyte (retail charges). This compares to an EU wholesale roaming cap that may have fallen by 85% but still stands at EUR7.70 per gigabyte. This will progressively decrease to EUR2.50 by January 2022, but even then will still be substantially above what Finns are currently paying for domestic data.

What this means is that while inbound roamers may be lucrative to Finnish operators who are able to charge up to EUR7.70 a gigabyte to their home operator, Finnish operators are going to be paying out up to EUR7.70 a gigabyte wholesale for their own outbound roamers and only recouping EUR0.67 per gigabyte retail.  The critical equation is not just the local cost of data and how much above the wholesale cap that is, but also the balance of inbound versus outbound roamers. ie Are more visitors coming to Finland than Finns roaming in the rest of Europe?

Clearly the operators ran the numbers and decided there was a big problem.

It’s not only the Finns that are rebelling. Operators in Lithuania, Estonia, Belgium (Voo), Portugal, Italy (Tiscali Mobile), Spain (Lycamobile, Digi Mobil) and the Slovak Republic (O2 Slovakia) have also applied to opt out.

For countries with low domestic charges, few visitors and mobile populations, the difference between the wholesale and retail tariffs could be devastating. This is particularly the case for smaller operators and MVNOs unable to drive traffic to their own group networks or to access favourable deals with larger partners.

Of course this still begs the question why, given that Finnish operators can supply data at such a low price locally, the EU has accepted an argument that wholesale prices should remain relatively high at EUR7.70 per gigabyte? There may very well be additional costs involved in roaming, and not all networks are as modern as those of the Finns, or additional costs might be due to local conditions, but it is hard to justify why wholesale costs should be capped  at 11 and a half times the lowest current retail price. That still smells very fishy to me and naturally still favours larger operators.

The cap is also a problem. It is not meant to restrict competition – operators are perfectly free to charge substantially less – but human nature being what it is, this acts in the same way as a speed limit. We might say until we are blue in the face ‘it’s a limit not a target’, but we all know that most drivers will aim to drive on the speed limit and most operators will align charges to the cap.

They say it ain’t over until the fat lady sings, and in this case the fat lady will stand up to sing next year when the temporary (year long) derogations expire. But it’s highly likely that she’ll be forced to take her seat again until those wholesale caps have decreased enough to make the Eurotariff sustainable for smaller operators and MVNOs.