The term ‘bill shock’ sends a shudder down the spine of people receiving it and operators causing it.  It is a generic term used to describe the surprise an individual experiences when he or she receives a bill that has an amount higher than expected, to be paid.  Most ‘bill shocks’ are handled by calls to customer care; in fact, billing inquiries make up the greatest percentage of calls to operator call centres worldwide.

Quite regularly, major ‘bill shocks’ make national and international headlines—a  recent example being a German resident who downloaded a TV program while roaming in France and now facing a bill of €46,000.  But, that’s all about to change; European service providers will have to comply with ‘cut-off’ requirements by March.  For some, this could be quite a challenge.  The days of European ‘bill shocks’ may be well and truly numbered. 

2009 was a monumental year for European mobile customers roaming in another EU Member State.  Subscribers were able to benefit from lower prices for not only making and receiving calls, but also texting when abroad and using data services.  For those unaware of the far-reaching regulations, many in force since July 2009, they:

•    Limit the price for sending a text message while abroad at €0.11.  Receiving an SMS in  another EU country remains free of charge.
•    Reduce the cost of surfing the Web and downloading movies or television programs, with a mobile phone while abroad, by introducing a maximum wholesale cap of €1 per megabyte downloaded.  This limit will be decreased each year.

•    Include further reductions in prices for mobile roaming calls, with a maximum tariff of €0.43 for making a call and €0.19 for receiving one.
•    Introduce per second billing after the first 30 seconds for calls made and immediately for calls received.
•    Ensure that citizens are kept adequately informed of the charges that apply for data roaming services.

However, by March this year, new rules will also protect consumers from ‘bill shocks’ by introducing a cut-off mechanism once the bill reaches €50, unless subscribers choose another cut-off amount.  This will effectively mean that all roaming calls will have to be monitored in real time, to ensure that a customer balance is not exceeded.  This will mean quite extensive changes to the way post-paid accounts are handled and will require investing to bring systems into a real-time state.

Many CSPs might bemoan the extra investment and the fear that their revenues may be impacted (some reports claim revenue loss exceeding €6 billion), but there could be considerable light at the end of the regulatory tunnel.  Roaming has, to date, clearly been the domain of the very wealthy or those with corporate accounts.  Ordinary roamers and tourists learnt years ago that any other type of call is cheaper than a roaming mobile call.  Regular travelers often resort to carrying two phones and purchasing a local, pre-paid SIM card in every visited country just to avoid exorbitant roaming charges, and Skype is the order of the day in every hotel room with an Internet connection.  It is not surprising when it is reported in some markets that 90% of roamers have experienced some form of ‘bill shock’ locally or whilst roaming.

With the economic downturn, many road warriors’ roaming habits have also been curtailed by their management, and operators in some markets have seen a noticeable drop in roaming revenues.  Now with regulated charges and self-imposed, cut-off limits, even mere mortals may be tempted back.  Sadly, the European legislation only applies to roamers from and roaming to member countries, but if the action creates a new market segment, particularly smartphone users reliant on data access at all times, then there could well be a sharp increase in roaming revenues.  If this does occur, we could see similar methodology adopted in non-Euro markets, especially amongst mobile operators that belong to one of the many alliances that are in place but go unnoticed because of their lack of beneficial customer policies.

So, it will be up to the operators to persuade subscribers to use their devices more, and that can only be good news for ‘bill shocked’ roamers. Time will tell.