An unwelcome return for roaming charges in the EU

EE will be the first network to bring back roaming charges for mobile phone users in Europe. It's unlikely to be the last.

When the Brexit transition period ended in January, all the UK’s major mobile-phone networks – EE, O2, Three and Vodafone – promised us that they wouldn’t be reintroducing fees for using our phones in Europe. Roaming charges had been banned within the European Union since 2017, but the UK’s decision to leave the single market meant these restrictions would no longer apply – both for UK users roaming in the EU and vice versa. However, the Brexit trade deal that the UK and EU agreed in December 2020 included a clause for “transparent and reasonable rates for international mobile roaming services”, which held out the possibility that regulatory and competitive pressures would prevent a return to the bad old days of huge phone bills for holidaymakers and business travellers.

EE breaks ranks

Less than six months later, that looks unlikely. Last week, EE announced that new customers – and existing customers switching to a new contract – who sign up after 7 July will have to pay a roaming fee to use their allowances when travelling in Europe after January 2022. The fee will be £2 per day or £10 for a 30-day pass.

The other networks have yet to make such drastic changes, but they are starting to put limits on heavy users. Networks have always been allowed to apply fair-use caps – eg, to stop customers who lived in countries with more expensive networks from signing up to the cheapest plan they could find in any EU country and using it at home all the time. Three currently has a 20GB monthly cap for using your data allowance in Europe, with a charge of £3 per gigabyte above the limit. From 1 July, this will be cut to 12GB. O2 is introducing a monthly limit of 25GB from 2 August (with an excess charge of £3.50 per gigabyte), bringing it into line with Vodafone, which already had a roaming limit of 25GB (and an excess charge of £3.13 per gigabyte).

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The start of a trend

Not many customers will be affected by these data caps for now – the average mobile customer used 3.6GB of data per month in 2019, according to regulator Ofcom – and EE’s fees are still low compared with what we used to pay. The question is whether this is just the start of a trend towards higher charges or tougher limits. Using your mobile abroad costs the networks money: they need to pay the networks you use in the country you visit. Since regulations are no longer forcing them to offer roaming for free, it seems likely that costs will creep up towards whatever the market will bear.

For now, users who plan to switch to EE or change an existing contract should consider doing so before 7 July, so that they will be on a free-roaming deal for as long as it lasts. Customers of the other networks have no immediate need to act unless they are in the small group affected by the data caps – even if their provider follows EE’s lead and brings in charges, it should not affect existing deals. However, in the medium term it may once again be necessary to consider roaming charges when choosing a provider, or be ready to use a local sim card in a spare phone or a dual-sim phone when travelling in the EU.

Cris Sholto Heaton

Cris Sholto Heaton is an investment analyst and writer who has been contributing to MoneyWeek since 2006 and was managing editor of the magazine between 2016 and 2018. He is especially interested in international investing, believing many investors still focus too much on their home markets and that it pays to take advantage of all the opportunities the world offers. He often writes about Asian equities, international income and global asset allocation.

Cris began his career in financial services consultancy at PwC and Lane Clark & Peacock, before an abrupt change of direction into oil, gas and energy at Petroleum Economist and Platts and subsequently into investment research and writing. In addition to his articles for MoneyWeek, he also works with a number of asset managers, consultancies and financial information providers.

He holds the Chartered Financial Analyst designation and the Investment Management Certificate, as well as degrees in finance and mathematics. He has also studied acting, film-making and photography, and strongly suspects that an awareness of what makes a compelling story is just as important for understanding markets as any amount of qualifications.