Home > Desperation shows as BT and Vodafone resurrect roaming

Desperation shows as BT and Vodafone resurrect roaming

Vodafone's move this week means two of the UK's four network operators will start charging once again for the privilege of using a mobile service in Europe. The era of worry-free data consumption, when British sunseekers could guzzle gigabytes without fear of excess fees, did not last long. For the time being, both operators are to cap those excess fees, which at least means that phone bills will not skyrocket. BT has proposed an excess charge of £2 a day for data usage, while Vodafone is to impose a daily data fee of between £1 and £2, depending on the tariff. This obviously means a BT customer on a two-week trip could face an extra £28 in charges that month. But there is likely to be more bill grumpiness than the bill shock of yesteryear. The return of the roaming empire Still, it is hard to see the return of roaming fees as anything but an opportunistic and desperate grab for cash by operators suddenly free of the regulatory straitjacket. It is also a sign of failure. Operators would hardly be scratching around for roaming pennies, at the risk of upsetting customers, if their massive investments in 5G, fiber, the cloud and so-called digitalization had delivered any kind of meaningful sales growth. Kester Mann, an analyst with CCS Insight, described it well in a recent blog. "In my view, bringing back roaming reflects a continued failure by telecom operators to stem a long-term decline in average customer spending," he wrote shortly after BT's move. "Among pay-monthly customers, this fell from about £25 in 2016 to just over £15 in 2020." A more charitable interpretation of the latest moves is that BT and Vodafone are simply passing additional costs onto their customers. The EU had taken aim at not just retail pricing but also the fees that operators charge one another for network usage. "Wholesale roaming rates will change given the UK's exit and this in turn will inevitably drive higher prices without EU protection," said Paolo Pescatore, an analyst with PP Foresight, in emailed comments. "It's a pretty easy decision for UK telcos." Even so, it is doubtful that European operators have jacked up their wholesale charges after Brexit. If they did, UK operators would surely respond. More importantly, most of the UK operators belong to big European groups. Vodafone, for instance, has subsidiaries in some of the most popular destinations for European travelers, including Greece, Italy, Portugal and Spain. If Vodafone Greece bills Vodafone UK for roaming, cash is simply flowing from one part of the company to another. Vodafone Group is no better or worse off than if there were no wholesale fees. All that makes the reimposition of roaming charges hard to justify on cost grounds. BT, though, would have bet on Vodafone copying its move, and not trying to poach BT customers unhappy about the additional charges. Proving BT was right, Vodafone must have decided that any marketing campaign to lure BT customers would not have been worth the effort. The truly sad thing is that the EU abolition of roaming fees in 2017 drove mobile data consumption to new highs. Mobile data services are rarely as useful as when somebody is in unfamiliar surroundings, without the residential broadband lifeline and with a strong need for information that can be supplied at the tap of a screen. There should have been numerous ways for operators to cash in without behaving as dumb pipes. In this case, that is exactly what they have turned out to be.

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