HAKOM and Telecoms: Roaming Charges Will Not Completely Disappear

The Croatian Regulatory Authority for Network Activities (HAKOM) and the leading three telecoms in Croatia – Hrvatski Telekom (HT), Vipnet, and Tele2 Hrvatska – assess that the new European directive on roaming will have negative financial effects on the entire industry, especially in Croatia as a tourist country, but they say they will adapt to the new rules.

The European Parliament voted on Tuesday for a package of laws that, among other things, completely abolishes roaming, charging fees for the use of mobile phones abroad within the EU from June 2017. Charging fees for calls, sending text messages, and using mobile internet abroad within the EU will be prohibited from June 15, 2017. In the meantime, from April 30, 2016, roaming charges, which are added to the price paid at home, will be reduced and may not exceed five cents per minute for calls, two cents for SMS, and five cents per megabyte of data traffic.

– Even after the final abolition of roaming, charges will not completely disappear, but roaming at domestic service prices or so-called roam like at home will be subject to fair use criteria, which in practice means some limited amount of data and calls that can be used in roaming in the EU at domestic prices during the year – they state from HAKOM, adding that existing charges will be significantly reduced during the transitional period.

– In the transitional period from June 30, 2016, until the final abolition of roaming charges, the prices of calls and internet traffic in roaming for Croatian users should fall three to four times because only the currently highest allowed wholesale prices can be charged on the domestic price – say HAKOM.

Depending on the analysis of wholesale roaming prices, which should be completed by mid-next year, conditions will be created for the complete abolition of roaming charges, or for further price reductions, with HAKOM emphasizing that they will continue to fight for the interests of the Croatian market, taking into account domestic specifics such as the fact that Croatia is a tourist-receptive country in a relatively short period of summer months.

– This means that it must not happen that the price of services for foreigners in Croatia is lower than the costs they incur, which includes, for example, the sizing of mobile communication networks to accommodate a large number of users in the summer – say HAKOM, emphasizing that before the complete abolition of charges, it remains to define ‘fair use’ in roaming to prevent abuses such as ‘permanent roaming’, meaning that someone uses a foreign operator’s SIM card for living and staying in the country while constantly taking advantage of the abolished roaming charges.

Telecoms Will Adapt, but Expect Conditions for Long-Term Investments

The largest domestic telecom service provider HT, regarding the new roaming directive, emphasized that they are closely monitoring what is happening at the EU level concerning this legislative text, which they say intends to set rules related to the treatment of traffic in providing internet access services and providing roaming services.

– Given that individual issues will be more specifically defined only in the next period according to the deadlines set in the regulation text, we are unable to comment in detail on the impact of the proposed changes, but at this moment we can say that any changes to the regulatory framework must ensure conditions for long-term investments and freedom of innovation as well as cost recovery by the players present in the market – they state from HT.

From Vipnet, the second-largest telecom in Croatia, they say they will implement all obligations from the new regulations in accordance with the set conditions and deadlines, and with full cooperation with the national regulatory body HAKOM.

– In financial terms, the introduction of new roaming regulations in the EU will have a significant negative impact on the telecom industry, on the overall value of the Croatian electronic communications market, and the revenue side of the state budget, and will in the next period affect the preservation of the level of investment cycles – say from Vipnet, explaining this by the fact that Croatia is among the EU member states oriented towards tourism, which have a significant imbalance between a smaller number of their citizens going abroad and a large number of foreign tourists coming to Croatia.

– Therefore, the positive effects will primarily be felt by users from EU member states who come to Croatia in large numbers, and these will be significantly greater than the positive effects for the smaller number of domestic users who will use services in roaming, along with the overall negative effects on the domestic economy, economic indicators at the national level, and investment potentials of the domestic telecom industry – they believe in Vipnet.

Tele2 Hrvatska also emphasizes that they support the new roaming regulation.

– Lower prices will enable our users to use our services even more while traveling in EU countries, and before the regulation comes into force, the regulation in the wholesale market still needs to be agreed upon, and we hope that the regulator will appropriately regulate this part so that we can continue to offer very competitive prices for our services – they say from Tele2 Hrvatska.