UK roaming charges: return of fees is better news for investors than holidaymakers

Cast your mind back to June 2017. The US Fed was raising rates, rapper Jay Z was inducted into the Songwriters Hall of Fame and roaming charges, the bane of holidaymakers, were abolished in Europe. Last week EE, the mobile operator owned by BT Group, plans to bring them back for some UK customers. Fellow network operators will probably follow.

At £2 per day the fees are less draconian than before, but would still cover a piña colada and tube of sunscreen over a week spent away. The charge remains a shade below certain special surcharges — such as for extended stays — under EU rules. Those capped the fee at the EU-wide wholesale data limit of €3 (£2.58), plus VAT, per gigabyte of data.

EE’s UK peers have kept schtum. Few people are travelling in any case. Operators including Vodafone have seen wholesale roaming income plummet during the pandemic. EE’s own charges will only affect new and upgrading customers from early next month and will apply next year.

Investors can rest easy. EE is unlikely to be a lone voice for long. It has proved a trendsetter before, implementing inflation-busting price rises on contracts starting after September 2020 which peers swiftly copied. 

As a relatively small operator, EE took a bigger hit from the roaming fee ban than peers. Compare that with Vodafone, which has operations in different parts of Europe and could retain at least some roaming fees within the group. EE’s British base does not help either. More fees flow into network operators in southern Europe than to those in the colder northern climes.

As a sector, European telecoms have been through the wringer. They have paid heavily for spectrum, endured regulator scrutiny and have presided over deflating revenues even as usage soars. That includes overseas roaming. Fair-usage levels of 20-25GB leaves operators exposed to up to €75 of monthly wholesale roaming charges, says Enders Analysis. The fact they have started to claw back lost revenues offers some small cheer for investors.

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