"There is more enthusiasm in the government than in the operators"

Residents of Argentina, Brazil, Paraguay and Uruguay who visit Mercosur countries can, at some point in time, be connected to their mobile phones without paying the extra cost of roaming.

This establishes "the agreement on the elimination of the perception of international roaming charges by the end user of Mercosur", signed this week by the representatives of this common market of the city of Santa Fe.

Although the agreement was presented less than a fact, there are still several aspects to be resolved, which suggests that it will take some time for the measure to take effect.

The agreement immediately recalls a similar measure adopted in the European Union, which took several years to materialize, far more than the official local estimates.

But in this aspect between Mercosur and the EU, there is a fundamental difference: here, there is no single currency. While in the countries of the Union, there is a common currency, the euro, each country of Mercosur has its own currency.

This implies a no less important point to resolve: how exchange rate oscillations will be managed, which, as the case of Argentina showed last year, can not be less (remember that the year last, the peso lost about 50% of its value in a few months).

This question has not yet been answered and could prove to be a significant barrier. Or also that the cost is transferred to all users, whether they use roaming or not.

There are also more "institutional" aspects. First, the agreement must be ratified by the legislature of each country. This should not be a major problem, although in the case of Argentina, the election years are characterized by limited legislative activity, which could delay its approval.

In addition, there are other issues that should be resolved by Congress and that relate to tax aspects. This is mainly the application of VAT, which should, for AFIP, take into account the consumption of foreigners in the country, which would imply double taxation.

This higher cost could not be transferred to the end customer if the cost of the communication was the same as in his home country. And absorbing an additional 21% is not an easy task.

In fact, it is the question of VAT that delays the entry into force of the roaming agreement between Argentina and Chile, announced last May for 2019 and now projected for May 2020. One thing is politics and another is numbers …

The problem may be simpler to solve in the case of mobile phone service companies operating in the different Mercosur countries, where trading takes place within the same company (some say it is more difficult than negotiating with a third …).

Claro is the only one of the three local operators to be present in the four countries that have signed the agreement. Movistar operates in Brazil and Uruguay and its staff only in Paraguay. Currently, in any case, they offer a certain amount of additional data exclusively for roaming and are independent of those included in the regular subscription.

On the other hand, it will be necessary to define how many days a year a user will be able to move at no additional cost. This is to prevent an inhabitant of one country from renting a mobile line to another because it is cheaper than the local population.

Another point to consider is whether roaming without additional charges will be available for all lines or if, as in Europe, it is only required for lines with credit (and if its application to prepaid is the only decision of each operator).

It is proved again that "the devil is in the details". And obviously, this subject has several problems to solve. Setting the final prices without considering the badociated costs usually brings this type of difference. For the moment, the government is more enthusiastic than the operators, who still have a lot of "details" to come.

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