In July 2020, it was announced that international roaming charges between Bolivia, Colombia, Ecuador, and Peru will be gradually reduced to zero over the next two years. International roaming fees have been on the regulatory agenda for many years. The EU was the first to banish roaming fees across the European Economic Area in 2017, and since then discussions have taken place in other regions too, most notably in South America. However, in the absence of a similar supranational regulator in the region, the implementation of such a policy is more challenging to implement.
As international roaming fees are gradually removed, it will become important to address permanent roaming
In July 2020, it was announced that Decision 854 of the Andean Community CAN will be implemented. This decision from CAN, a free trade area, will see international roaming charges between Bolivia, Colombia, Ecuador, and Peru gradually fall. Under the terms of the agreement, from January 1, 2022 operators must not charge additional fees for roaming between the four nations and must apply the same tariff conditions that apply in the user’s home country for local outgoing calls, SMS, and data. In the meantime, the decision establishes price ceilings for retail and wholesale international roaming services that see the prices gradually reduced. Wholesale fees for mobile data were set at $0.0039 per MB until December 31, 2020 and $0.0033 per MB from January 1, 2021 to December 31, 2021, while wholesale incoming mobile voice service must be charged at cost. On average, these caps will see a reduction of between 60% and 80% over the next two years until international roaming charges end.
Figure 1: CAN, wholesale international roaming fees for mobile data
This approach is similar to the policy in the EU, where roaming charges have been removed since 2017 under the Roam Like at Home (RLAH) regulation. Discussions to end international roaming fees have been becoming more common since the EU’s RLAH, so this is not the first discussion to have a zero-roaming-fees arrangement in South America. On November 21, 2018, Brazil and Chile signed an agreement to end international roaming charges between the two countries as part of a free trade agreement. There have also been numerous previous attempts by operators to make commercial agreements to remove roaming fees. Some operators are already offering free regional roaming in some of their plans; for example, in most markets Claro includes free regional roaming for its mid and high postpaid plans.
RLAH has proved popular with customers in the EU, but it is unclear whether the same will be experienced in South America, particularly if the cost of roaming is recouped from customers through a price-plan hike. This would especially impact prepaid customers, who in general would probably not use this offer. It will also be important to consider how to tackle permanent roaming in order to ensure that subscribers do not buy subscriptions from markets that are cheaper than their home country and then continue to use them in their home country.
“EU lawmakers finally reach a compromise on wholesale roaming caps,” TE0007-001130 (February 2017)
“New cap on intra-EU calls to bring pricing more in line with roaming caps,” GLB005-000157 (June 2019)
“Zero roaming fees between Brazil and Chile could lead to retail price rises, but the effect should be limited,” GLB005-000117 (December 2018)
Sarah McBride, Senior Analyst, Regulation