Brexit impact on Telecoms

Brexit impact
Brexit is a done deal, what about the ETF, roaming, digital single market...
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British exit from Europe is a done deal, so what’s the Brexit impact on Telecoms?

The Brexit impact in the mass market, is unlikely to be substantial. Telecoms services are mostly in their local markets already: that is, people buy telecoms services from operators in the country where they live.

The Brexit impact on the U.K.’s international trading agreements and regulations would not affect the bulk of operators’ business. One exception is multinational companies, which frequently source mobile services from an operator outside their base country. In practice, though, Brexit is unlikely to have much of an impact in this case either. Multinationals companies are served by multinational operators and/or groups of operators that have commercial agreements with each other (e.g., Freemove). Brexit impact should have no significant effect on these arrangements.

Brexit impact on Vodafone, a U.K. company with operators in several EU countries might be more complex, similarly, Telefonica, a Spanish company which owns an operator in the U.K. will have to change some reporting. Both Vodafone and Telefonica already have substantial operations outside the EU, as well as within, and so they are already accustomed to the operational requirements which that entails.

Brexit impact on the structure of the U.K.’s mobile industry either is not expected to be significant. The main pending regulatory decision in this area, concerning the proposed takeover of O2 by Three, will have been taken by the European Commission before the Brexit referendum happens. During the course of the debate, both of the relevant U.K. regulators — Ofcom and the Competition & Markets Authority — have made it clear that they oppose this merger, because they fear it will lead to higher retail prices for mobile. Thus, a shift from the EU to the U.K. for approval of future proposed mergers is unlikely to result in a departure from the current pro-competition/anti-consolidation bias.

Regulations

At present, the U.K.’s regulatory regime is formed within the envelope of the European Telecoms Framework (ETF). With the U.K. outside the EU, consistency with the ETF would no longer be an obligation for Ofcom.

The U.K.’s mobile industry is mature and relatively successful, and for the most part there is no obvious hindrance whose removal would benefit either the demand side or the supply side of mobile in the U.K.

One of the most immediate issues of the Brexit impact on Telecoms issues is in roaming.  Mobile roaming charges will end within the EU by mid-2017 and will be significantly cut next summer after the European Parliament formally approved the rules.

Roaming

In the near term, the Brexit impact is likely to be in the area of international roaming. For the past several years, the European Commission has been imposing a progressively lower series of price caps on the extra charges that mobile operators in EU countries can levy when their customers travel to other countries within the EU. At present, the caps are €0.05 per minute for outbound calls, €0.01 for inbound calls, €0.02 for texts, and €0.05 per Mb of data. From June 2017, intra-EU roaming charges are due to be abolished altogether: EU citizens will pay the same to use their mobiles in other EU countries as they do in their home country. Brexit impact on these means UK citizens would no longer be covered by this regulatory framework, and U.K. mobile operators would no longer be obliged to limit or remove charges for roaming in the EU.

If U.K. operators do maintain (or even increase) roaming charges for EU travel post-Brexit, they may find that Ofcom intervenes to find out why they are increasing their retail prices in an area where, by their own assertion, the associated costs are low and getting lower.

Maybe UK operators should take a leaf out of the T-Mobile USA’s playbook.  T-Mobile just announced they are providing free unlimited high-speed data use throughout Europe to all Simple Choice plan customers in July and August under a “Summer Unleashed” vacation special offer announced by the carrier.

More Here [the-mobile-network] [idc]

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