Brexit Could Benefit Mobile Networks, at Expense of Consumers

Europe-cropped.jpgUK mobile operators could be looking at a cash boost of up to £750m a year if the UK votes to leave the EU, due to new legislation surround roaming charges. However, this combination of savings and extra revenue would largely come at the expense of UK consumers.

New EU regulations are set to come into effect in 2017 preventing operators from charging consumers any roaming fees, as well as potentially reducing the wholesale fees that operators can charge each other for providing roaming services to subscribers from other countries.

This change is expected to cost UK operators around £500m a year in lost revenues, largely due to savings made by UK mobile phone users, according to estimates from Oxera, a leading economics and financial consultancy.

However, if the UK was to vote to leave the EU on 23 June, mobile operators would avoid this loss of revenues, and would likely secure a deal to operate under World Trade Organisation (WTO) rules.

The WTO rules regarding roaming charges are considerably more relaxed than existing EU legislation, meaning that not only would operators save money, but they could stand to bring in up to £250m a year in additional revenue from steeper roaming charges. However, this would all be at the expense of UK consumers, who would be paying significantly more to use their mobile while travelling.

“While mobile roaming charges have recently been falling, if the UK chooses to remain in the EU these charges will be scrapped altogether in the next year, saving consumers millions of pounds,” said Felipe Florez-Duncan, partner at Oxera. “Making calls, downloading data and texting will all become considerably cheaper after 2017 if we remain in the EU.

“However, the impact to UK operators from this will be significant. Therefore it is inevitable that someone is going to end up out of pocket – but the question is will it be UK operators under Remain, or British mobile phones users under Brexit?”

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