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Summary

On May 15, 2019, a new cap on intra-EU calls was introduced across the EU. All international calls within the EU are now capped at €0.19 ($0.21) per minute and SMS messages are capped at €0.06 ($0.07). This is to ensure that the price of calls/SMS made to other EU member states falls more in line with the EU’s roaming limitations. While the cap on roaming purely considers the communications made while EU residents are traveling in the EU, the new cap will take account of EU residents making calls or sending SMS to other EU member states when they are at home. It is predicted that the intra-EU cap will lead to greater numbers of EU residents making intra-EU calls in future.

The intra-EU cap will ensure customers avoid bill shock

The European Electronic Communications Code, which took effect at the end of 2018, aims to encourage more investments in high-speed connectivity and the smooth introduction of 5G in the EU. It also includes a cap on intra-EU calls/SMS. While the code must be passed into national laws by the end of 2020, the BEREC Regulation includes different dates for application – the first of which is the cap on calls and SMS charges which came into force on May 15, 2019.

The aim of the cap is to strengthen coordination across the region and ensure customers can avoid bill shock. Calls between EU countries will not cost more than €0.19 per minute and an SMS will not cost more than €0.06. These caps apply to personal usage, not business customers, and in the coming months will also apply to non-EU members Norway, Iceland, and Lichtenstein, once they are incorporated into the EEA agreement. The cap brings prices more in line with the limits on EU roaming charges which were introduced in 2017. After this date, operators should no longer be applying surcharges for roaming within the EU.

Prior to the introduction of the cap, there existed large price discrepancies across EU states, with the average price for intra-EU calls being three times higher at €0.76 ($0.85) than the standard price of a domestic call (€0.21), while an SMS would, on average, be twice as high. At its highest, intra-EU calls could cost 10 times more than a national call. Consequently, ensuring consistency across member states has been a priority.

While it is great for consumers as the vast majority will see a reduction in prices, it is important that these caps do not distort competition, innovation, or investment in the market. As with the "roam like at home" policy, there will be certain exceptions when national regulatory authorities (NRAs) may grant an operator a exemption from the price regulation. This is only applicable to operators that specialize in international calls or have a very low profit margin on domestic prices. Each NRA should have a list of providers that may be granted the exception.

In some EU member states, such as France and Slovenia, it is already common practice that intra-EU communications are included in telecoms plans. The new policy should ensure those users without an inclusive contract are not overcharged. Over 40% of EU residents already make calls to another EU member state from their home country. With the introduction of the cap, this figure is predicted to rise.

Appendix

Further reading

Impact of "roam like at home" (RLAH) regulation in the EU, GLB005-000036 (April 2018)

"'Roam like at home' in the EU is already causing price increases," TE0007-001136 (April 2017)

"EU lawmakers finally reach a compromise on wholesale roaming caps," TE0007-001130 (February 2017)

Author

Sarah McBride, Analyst, Regulation

sarah.mcbride@ovum.com

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