Neelie Kroes has hit back at operators critical of her plans to scrap roaming charges, with the EU digital commissioner claiming there is no truth in their argument that network investment will suffer as a result of the cuts.
Last week operator executives reacted angrily to Kroes’ attempt to create a single European market, which includes the phasing out of roaming fees, branding it as a “headline grabbing move” that will undermine investment in networks and services.
The Financial Times cited a study commissioned by ETNO, a lobby group representing Europe’s large operators, which concluded that the abolition of roaming fees and the imposition of EU-wide packages would cut mobile operators’ cash flow by up to €7 billion by 2020.
Yesterday Kroes ridiculed this reaction, stating in a blog post that network investment in new fast networks “has very little to do with roaming”. Kroes cited the example of network investment during “the era of data roaming rip-offs (an era which, let’s remember, only ended in 2012)”, which she claims saw levels of investment “hardly stronger” than those of today.
“Investment is weak in Europe; but it has been so for some time… The fact is, if anything, roaming revenues tend to contribute to cash expenditure rather than investment capability,” she noted.
Kroes also suggested that mobile operators will react to the loss of roaming revenue via various stages of grief. “They say that when faced with loss there are several stages of grief – from denial to anger to bargaining to acceptance. I suppose that applies equally to a person facing a divorce or a company facing the loss of a cash cow. For me we shouldn’t be clutching onto old practices and rehearsing the arguments of the past: we should be grabbing the opportunities of the future.”
Indeed, Kroes argued that her plans will actually help boost investment: “I am taking measures to improve investment: like through wholesale price stability and regulatory certainty – and will shortly be coming forward with further measures to remove single market barriers, like consistent obligations, harmonised access products and coordinated release of spectrum across the EU: helping operators plan on a large scale.”
Kroes claims her goals are “win-win” for both the mobile industry and consumers. In September she will submit her “Telecommunications Single Market: A Connected Continent” package to the College of European Commissioners.