Q&A: EU roaming charges

Q Remind me of the background?

For years, the domestic mobile phone market in the UK has been highly competitive. Also for years, some international travellers have been paying sky-high rates for making and receiving calls, sending texts or using data abroad. Critics say that the telecom firms are levying charges that are out of line with the actual cost of providing the service, and that international travellers are seen as a rich source of revenue.

The mobile providers point out that they have to set up “wholesale” deals with telecom operators in each country, and the rates for those deals depend on local conditions.

Inertia among customers is also a factor. Typically, users find a good domestic deal and stick with it even if the roaming rates are painfully expensive while they are on holiday; and many business travellers have been price-insensitive because their company is paying.

The EU started putting the squeeze on intra-European roaming charges in 2007, with a series of increasingly demanding price caps. They apply for outgoing calls made from any country in the European Economic Area (the 28 EU countries plus Iceland, Liechtenstein and Norway) to any other EEA country. On 15 June 2017, such roaming charges are due to be abolished.

Q And until then?

Another round of price caps, in effect on 30 April 2016, further restrict the charges that mobile phone providers can levy.

An incoming call will cost you no more than a penny a minute. Apart from that, the new rules don’t explicitly reduce the maximum you could pay for using your phone within Europe; it could be as high as 16p per minute for making a call and 5p for sending a text. But in the latest round of caps, the EU is assuming that people are happy with their domestic phone deals. So it is limiting the surcharge that telecom firms can add to the customer’s basic mobile package for using the phone in a different European country.

Q What are the new rules?

For intra-European calls, the most a mobile provider can add to your domestic tariff is €0.05 per minute. For each text, it’s €0.02. And for each megabyte of data, you will pay your domestic price plus €0.05. All of these are subject to local rates of VAT.

Q So what do they cost in real money?

For outgoing calls, the maximum surcharge is 4.3p per minute; for texts, 1.7p; and for data, 4.3p per MB.

Q Do the rates change every day depending on the pound-euro exchange rate?

No. For the purposes of the new rules, the exchange rate is based on the average exchange rate on 1 March, 1 April and 1 May 2015. At the time, the pound was relatively strong (£1 = €1.374 on average), which has the welcome effect of keeping the charges about 8 per cent lower than if the rate today was used.

Q I still don’t like the charges. What are my options?

Don’t use your smartphone for “normal” calls, texts or downloads. Instead, hook up to free wi-fi in hotels, cafes and public spaces. Use Skype, FaceTime (for iPhone users) or WhatsApp Calling. They use the internet connection rather than you mobile signal, and are free.

Waiting until you are in free wi-fi territory of course, is not always convenient. So you could sign up for a plan that offers a bundle of calls, texts and data abroad. For example, Vodafone’s EuroTraveller adds 1GB of data for a £3 daily fee for pay-as-you-go customers. Three's Feel at Home scheme automatically applies the normal domestic tariff in popular countries such as France, Ireland, Italy, Spain and Sweden. It also covers Switzerland, which is outside the EEA and has been the source of some very high bills for users who assume the EU caps apply. Carphone Warehouse's iD TakeAway plan offer the same concept for key holiday destinations including Croatia, Greece and Portugal. And Tesco Mobile has a summer promotion (23 May-3 September) that will remove roaming fees across the EEA, providing a foretaste of the European telecom landscape from 15 June next year.

Q Any other pitfalls?

Yes. If you are on a cruise or a ferry in the EEA - for example in the Mediterranean, the Baltic or the North Sea - and the ship uses a satellite-based comms provider, then you could pay as much as 5p per second to make or receive calls. Keep your phone switched off until you are in telephonic reach of land, or use the vessel's wi-fi system - it may look expensive, but is certain to work out cheaper than using your mobile.

Q What is the best way to keep roaming costs down outside Europe?

The only legal restriction is on data. The EU says: “To protect you against excessive data roaming bills, the volume of downloaded data on your mobile device is capped, worldwide, at €50, unless you have agreed to a different limit with your operator. You will also receive a warning when you reach 80 per cent of this agreed limit.” So deploy the same principles as for keeping costs down in Europe: use free wi-fi to make calls; buy a bundle that reduces the cost of calls, texts and data; or use a provider that offers free roaming in specific countries. For example Carphone Warehouse’s iD TakeAway and Three’s Feel at Home both offer normal UK rates in Australia and the US.

For countries that are off the “cheap calls” map, such as much of Africa, a good strategy is to wait until you get there, then buy a local pay-as-you-go SIM. This will provide you with a local number that your family and friends can dial at no cost to you (and, if they call wisely, for example via Skype's dialling system, at little cost to them). You can use the credit that comes with the SIM card to text them your number, or just give them a “missed call” so your number registers on their phone.

Or go one step further and buy a brand-new phone. In Namibia, faced with a charge of £2.50 per minute to make a call (or to answer a cold call from PPI bandits), I bought a £15 Nokia complete with SIM card with a fiver's worth of credit. After six minutes’ conversation, it had paid for itself. It can be used anywhere else, with a locally bought SIM. And if I lose it, I'll just buy another.