While a definition of' fair usage' hangs over EU plans to outlaw roaming surcharges from June 2017, two new mobile operators are set to go into action this year - Emma Kennedy
For mobile customers, I last week brought two pieces of good news as the end of roaming charges came into view, and a new operator indicated that it's close to stepping into the market and boosting competition.
The news that the days are numbered for roaming charges in Europe is good for tourists and business travellers alike, as it means that using your phone abroad will get cheaper.
EU regulations have already pushed down the cost of making calls, sending texts and using data when abroad, with roaming caps in place since 2007. Further reform is coming, with a deal struck by the EU last week set to abolish mobile roaming charges within the EU from the middle of June 2017.
As an interim move, the deal, which now needs the backing of the European Parliament, will also see roaming charges fall in 2016.
From April 30 next, the maximum roaming surcharge that mobile operators can charge on calls will fall to 5 cent per minute. Similarly, a maximum roaming surcharge of 5 cent per megabyte of data will apply from the end of next April, while the maximum allowable roaming surcharge for sending a text message will be 2 cent from that date.
While the news of the demise of roaming charges is a positive for consumers, there's a caveat: a fair use clause. The definition of what constitutes fair use is, as yet, somewhat vague.
The deal includes this fair use clause to protect mobile operators against "permanent roaming", according to an EU statement.
According to Grace Duffy of the European Consumer Centre Ireland, it's difficult to say exactly how the concept of fair usage will be defined.
"The European Commission has indicated that a number of 'technical conditions' have to be fulfilled before any abolition of roaming charges is possible," she said. "I would imagine in this regard they mean the review of the wholesale roaming market, which in turn may influence any definition of fair usage."
"It's too early to speculate on what impact the fair usage concept may have, at least until further detail is available about how it will be defined and calculated," Duffy said.
Roaming aside, there are other major changes ahead in the mobile market, both in terms of ownership and consumer behaviour.
Last year, the European Commission gave the green light for Hutchison Whampoa, the owner of Three Ireland, to buy O2 Ireland from its owner, Telefonica, in a deal worth €850 million.
The O2 brand has since disappeared, leaving consumers to choose between a range of others, such as Three, Vodafone, Meteor, eMobile, Post Mobile (An Post's mobile phone offering, which recently rebranded from Postfone, its original moniker), Tesco Mobile and 48 Months.
Before 2015 is out, two new names are set to join the list of options on offer. To allay competition concerns over the Three/02 merger, Three made mobile virtual network operator (MVNO) agreements with both UPC and Carphone Warehouse (now known as Dixons Carphone, following a subsequent merger of Dixons and Carphone Warehouse).
The agreements mean that the two new MVNOs - operators that rely on a mobile network operator's network - will enter the Irish market at some stage this year, meaning more options for consumers.
Last Thursday saw Dixons Carphone unveil some details of its new mobile offering, ahead of its upcoming launch. Its brand, named iD, will provide "greater flexibility and offer innovative plans", and Dixons Carphone is targeting a 6 per cent share of the mobile market within five years, according to a statement.
There's an appetite for new options, according to a survey conducted by Ignite Research on behalf of Dixons Carphone. The survey found that one in five pre-pay mobile customers is likely to switch mobile operator in the next 12 months.
Almost 30 per cent of bill-pay customers are likely to switch in the coming year, according to the survey, with just over half of this cohort having switched once or more in the past five years.
Also targeting switchers in the coming months will be UPC, the other new entrant to the mobile market. Details of UPC's forthcoming entry to the market are vague as yet, but look set to hinge on a bundled 'quadplay' offering, combining broadband, TV, landline and mobile.
In an interview with The Sunday Business Post earlier this year, UPC's chief executive Magnus Ternsjo said the company needed to "find ways to slot into the mobile market to make it attractive to consumers".
"We're trying to position ourselves as the connected entertainment provider - mobile is the missing piece in our jigsaw," Ternsjo said.
He indicated that UPC's mobile campaign would begin with its existing customers. "We already have a relationship with them. We obviously will try to target those customers not on our network, but we will target existing customers first," the UPC chief executive said.
Usage changing too
Both new entrants to the mobile market and existing players have a shifting landscape to contend with, as customers shift their focus away from calls and texts in favour of soaring data usage.
Figures released last month by the communications watchdog, ComReg, revealed that the way that consumers use their mobile phones is changing.
ComReg's quarterly market report for the three months to the end of March pointed to a decline in both fixed voice traffic and mobile voice traffic. Text messages are becoming less popular too. More than 1.78 billion texts were sent in Ireland in the first quarter of this year, down 11.8 per cent on the same period a year earlier.
ComReg's recent update on the market also highlighted the rise of smartphones, and increased data volumes. The regulator's statistics show that data usage soared by 86.4 per cent between the first quarter of 2014 and the first three months of this year.
Usage trends will lead to changes in the sort of plans on offer from mobile operators, according to Simon Moynihan, a spokesman for consumer comparison website Bonkers.ie.
"Consumers are after unlimited plans, especially unlimited data," Moynihan said. "So I think we'll see more of that from operators."
"Data is going to be the key component of any mobile plan in the future," said a spokesman for Eircom, which operates the Meteor and eMobile brands.
"Customers are using their mobiles for browsing and video streaming when they are out and about as well as at home. As a result, the trend towards more data in mobile phone plans will continue as this consumer demand increases," Eircom's spokesman said.
Other operators agreed. "We believe that data will be at the core of everyone's mobile service in five years' time," Vodafone's spokeswoman said.
A spokeswoman for Three said that customers were "data savvy and enjoy using services such as WhatsApp". She also predicted a growing emphasis on data services "particularly as customers adopt 4G, and plans will reflect that".
Eircom's spokesman also pointed to an increased appetite for bundling mobile services with broadband, landline and TV Currently Eircom is the only provider in the market offering all four services, and is likely to face competition from UPC in this space in the coming months.