The Return of Roaming Fees

A new battleground emerges for UK operators

After being banned by the EU in 2017, roaming charges are back for UK customers.

From today, people on some Vodafone tariffs will be charged extra to use their phone abroad. EE plans to follow suit in March and Three in May 2022. Virgin Media O2, however, has bucked the trend and pledged not to bring back the dreaded fees.

The move to reinstate roaming fees follows the UK’s withdrawal from the EU, meaning operators no longer have to abide by Brussels’ regulations. As their European counterparts begin charging Britons again, UK operators’ wholesale costs are set to rise. These costs, combined with the expensive deployment of 5G networks and operators’ inability to boost customer spending, have triggered the reintroduction of roaming charges.

No price rise is ever welcome, but it’s important to recognize that the new charges are a far cry from the exorbitance of the past. I can recall many horror stories of people coming back from holiday having inadvertently racked up bills of hundreds — or even thousands — of pounds. This rightly led to widespread distrust and resentment toward telecom operators.

It’s also important to note that Vodafone still offers inclusive roaming on some of its premium plans; with fewer than half of its customers using their phone outside the UK and Ireland in 2019 — the last full year before the pandemic — it makes sense to position roaming as an add-on. Indeed, EE already offers roaming as one of its “smart benefits”, alongside things like Apple Music and BT Sport.

For customers without inclusive roaming, Vodafone offers eight- or 15-day passes at £1 per day and a standard £2-per-day option. Although this could add up for a family taking several phones abroad, it probably only represents a small fraction of the cost of a European holiday. Vodafone’s Spend Manager enables customers to set a limit on out-of-plan charges and the £2-per-day roaming maximum means that there’ll be no return of the “bill shock” of years gone by.

As rivals confirmed the return of roaming fees (see BT Brings Back Roaming Charges), the door was left ajar for Virgin Media O2 to break rank. The joint venture vowed to shake things up when it launched in June 2021; its decision to hold firm on roaming is the first example of it living up to its word.

This wouldn’t have been an easy decision, however. The company must have concluded that the opportunity to bolster its ability to attract and retain customers, combined with a healthy dose of positive PR, is more than worth the additional cost. Expect it to go hell for leather in both its enterprise and consumer marketing as it positions itself firmly on the customers’ side.

With roaming still a poisonous term, Vodafone, BT and Three need to be super careful about how they articulate its reappearance — I expect some challenging conversations at point of sale. Customer service teams should brace for some tough months ahead; the reintroduction of roaming coincides with a raft of annual price rises that’ll see most contract customers face higher bills, some by about 10%.

The return of roaming fees could backfire most on Three. It was the first operator to begin to phase them out in 2013, and quickly established a competitive advantage through its successful Feel at Home and Go Roam offers. Its planned U-turn will see it lose one of its major selling points to Virgin Media O2, and will probably undo much of this effort. More importantly, it could knock customer trust; in 2019, Three parked a bus outside Westminster promising to safeguard free roaming in the EU whatever the outcome of Brexit negotiations.

Virgin Media O2’s decision is also a blow for UK virtual operators, always seeking opportunities to differentiate in a cut-throat market. Tesco Mobile and Sky Mobile say they have no plans to bring back roaming charges, but I wonder if they’ve reconsidered. Without their own networks, they’re at a disadvantage — their customers will still want to roam, but they’ll be unable to mitigate the costs.

In the highly competitive UK market, roaming has emerged as an early battleground in 2022. As international travel slowly returns, CCS Insight will be closely monitoring how different strategies affect customer loyalty, satisfaction and spending.