The Impact of the European Union’s Connected Continent Proposal

Written by on September 17, 2013 in BillingViews, Guest Blog with 1 Comment

Roaming and Net Neutrality

No more roaming charges – great. Not many complaints from consumers on that one. Goodbye to operators blocking Skype and YouTube on low speed connections – hooray it’s party time. Or maybe not. The European Union’s proposed legislation to enable a single European telecoms market is ambitious and, if passed into law, will not be without teething problems.

It does strike me that while all very admirable, there is a considerable amount of work still to be done. Let’s look at the proposal to abolish roaming charges. According to European Commissioner for the Digital Agenda Neelie Kroes “If your operator does not offer “roam like at home” you can take matters into your own hands to avoid roaming charges.” Commissioner Kroes then gets technical and tells us how to do this, “When you travel you can simply choose another provider who will give you better rates using the same SIM card, same bill.” OK – the words ‘same’ and ‘bill’ just appeared together. So I can just pitch up in Spain, select a roaming partner from an advert at the airport, send a message and get my roaming service activated, knowing that my operator back home is going to handle all the billing. And they’ll need to provide it in real-time, as I don’t want any nasty shocks in my bill when I get home.

What incentive is there for the home operator to provide this billing service? Will they get a percentage cut of the revenue from the visited (or alternative) roaming provider?

Some operators are saying that getting rid of roaming charges in the EU could cost up the €7bn in lost revenues. There is an argument that says revenues may actually increase as most people switch off data roaming anyway, so having no roaming charges will reduce the uncertainty about cost – which is the main reason why people switch off roaming data.

As for net neutrality – the EU has said that “the full and open internet” be available to all. Even if they sign up for a super slow or superfast package – internet for all. This is good. Most operators see Skype as way to sell more data services, as most bundle unlimited voice calls anyway.

But, what about people who can’t afford even the most basic mobile internet package? In Asia we’re seeing the success of application service passes – e.g. customers buy a very low cost data package (e.g. $1-$2 / month) but the use is limited only to specific apps, such as WhatsApp.  We’re seeing many operators provide low cost social media packages, to encourage data adoption – these don’t provide ‘ full and open internet’-  they provide access to a limited and controlled number of social media.

Only last week, Portuguese operator Optimus, launched their (wonderfully named) WTF package which offers unlimited access to Facebook Messenger, Skype, Viber,  WhatsApp and Blackberry Messenger plus 500MB general data use. This is a low cost service aimed at the youth market.

It could be argued that by picking and choosing which apps customers can use on unlimited deals operators are controlling internet access and could face a visit from the net neutrality police.  If operators are forced by EU law to not offer app based bundles, then there’s going to be people who simply can’t afford ‘full and open internet’ and the EU goal of internet for all will be hindered by plain old family economics and budgeting.

The EU proposed legislation is admirable in its intentions, but there needs to be a lot of work done figuring out how they’re going to work and be implemented. One thing that’s certain, is that the speed of change is getting faster and this is going to have a knock on effect on the systems and processes operators use to develop and make money from new services.

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About the Author

About the Author: With 25 years’ experience in mobile communications software, Martin has worked in mobile billing software since the early days of the industry. As such he’s been around long enough to have had numerous articles published. He has spoken at many conferences. He’s served on the boards of software companies and trade associations. At Openet Martin is responsible for marketing thought leadership and demand creation. .

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  1. A Torriani says:

    Here’s a small advanced telecom operator’s perspective on ‘Connected Continent’ proposals and why what is proposed will likely undermine the creation of a favorable pan-European cross border investment for broadband and next generation telecom services. Without a healthy telecom sector and climate for investment, there is no basis for the investments required to propel Europe to the next level.

    http://eternaldisruption.com/2013/09/ecs-connected-continent_rethink-time/

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