Mobile Networks will Benefit from Brexit at the Expense of UK Consumers
- UK operators could lose £500mn a year if the UK remains in the EU due to new legislation, while consumers benefit
- EU regulation will abolish roaming charges in EU member states from 2017, reducing revenue to UK phone operators
London, UK – Oxera, a leading economics and financial consultancy, estimates that UK mobile phone operators will face a loss of up to £500mn p.a. under a remain scenario, as a result of new EU regulations that will allow consumers to use their mobile phones anywhere in the EU paying only domestic rates. However, a large fraction of this loss would be due to savings by UK mobile phone users, who under Remain would not only pay less overall but would also use roaming services more.
New regulations will prevent operators from charging consumers any roaming fees, as well as potentially reducing the wholesale fees that operators can charge each other for providing roaming services to subscribers from other countries. The removal of roaming charges is being introduced in 2017 under an EU regulation which is binding on all member states.
By contrast, if the UK left the EU and had to trade under World Trade Organisation rules, UK operators could benefit by up to £250mn p.a. if they are no longer subject to existing EU price controls on roaming. As a result, by 2018 a Brexit scenario may be worth up to £750mn p.a. more than a remain scenario for UK operators. However, this would be largely at the expense of UK mobile phone users, who under Brexit would pay considerably more than under Remain.
Felipe Florez-Duncan, Partner at Oxera commented:
“While mobile roaming charges have recently been falling, if the UK chooses to remain in the EU these charges will be scrapped altogether in the next year, saving consumers millions of pounds. Making calls, downloading data and texting will all become considerably cheaper after 2017 if we remain in the EU.
“However, the impact to UK operators from this will be significant. Therefore it is inevitable that someone is going to end up out of pocket – but the question is will it be UK operators under Remain, or British mobile phone users under Brexit.”
