WHAT IS THE TELECOMS IMPACT OF THE EU REFERENDUM RESULT

The EU referendum is over and perhaps against the expectations we have voted to leave. So what happens now happens from a telecoms perspective.

Roaming

On April 30th 2016, the EU applied further charging caps on what the mobile operators can charge for roaming calls and data. If you are in Europe and either make mobile calls or use data on your smartphone, they became much cheaper from that date. In 2017, they will be abolished altogether within the EU.  By then assuming Article 50 is invoked later this year then negotiations will still be underway and therefore the rules will apply.

Once the UK has left the EU, this no longer be the case. A new agreement would be required. However, the precedent is there as other countries outside the EU such have Norway have signed up to the deal. The impact may be longer term if the EU starts to promote common tariffs to people visiting from outside the EU. However now that the UK can negotiate its own trade agreements it could similar seeks to do deals with countries it wants to encourage more trade with. So it could be free to roam between the UK and the USA for instance.

Competition

At the moment some of the biggest decisions affecting the UK market are taken by the EU. For example the final say on the o2 and 3 merger deal fell to European competition commissioner Margrethe Vestager.   In future any such mergers will done to the UK and as such will reflect more the views of the UK Government. The EU has generally been anti merger.   It enhances the role of Ofcom who of course recently bottled the decision to split Openreach away from BT.

Trade

Like many other manufacturing industries as a country we import far more telecoms equipment than we export. Not many mobile phones or phone systems are made here – most of them are imported. EU Trade agreements will stay in place for 2 years after we invoke Article 50. We do can negotiate our own deals with the countries that do manufacturer the equipment.   As the fifth largest economy that makes us attractive to the handset makers and we could create lower import tariffs for them

Could calling Scotland become more expensive

Nicola Sturgeon has already said she may want to hold another Scottish Referendum. If they did and voted to leave that would impact businesses with operations or customers across the two countries.

Calls from London to Edinburgh would then be international calls. If you were in Scotland with an English SIM card, you would be making roaming calls. If you check your LinkedIn status, you would be using roaming data and just how much would that cost you? There would also need an Ofcom for each country and potentially different pricing for lines and internet which could be challenging for businesses with sites in both countries.  

Like so many other things there is a lot to resolve and the two years could pass quite quickly.   But it will make the telecoms market very interesting