Regulators Reshape Europe's Roaming Market
The European Commission on Wednesday proposed new regulation that would force mobile operators to open their networks to other service providers as a way of introducing competition and reducing prices in the mobile roaming market in Europe. (See EC Proposes More Data Roaming Cuts.)
The proposal comes just days after new roaming price caps came into effect across the region, and it is the most radical move the European policymaker has made to bring down the cost of using voice, SMS and data services while abroad. (See EU Roaming Prices Cut Again.)
Under the new proposal, from July 1, 2014, users will be able to subscribe to a cheaper international roaming service from an alternative provider while using the same SIM card and mobile telephone number they have with their national provider in their home market. To achieve this, the EC will mandate that mobile operators must provide access to their networks on a regulated wholesale basis to any potential alternative roaming service providers. The proposed regulation will also introduce a retail price cap for data roaming for the first time, which will be set at €0.90 (US$1.30) per megabyte from July 1, 2012 and fall to €0.50 (US$0.70) per megabyte by July 2014. A wholesale data roaming price cap has been in place since July 2009.
Such structural measures will get at the root cause of "roaming rip-offs, namely lack of competition," said Neelie Kroes, vice president of the European Commission's Digital Agenda, during a press conference in Brussels on Wednesday.
Up to now, the European Commission's response to high roaming charges has been to introduce wholesale and retail price caps. But Kroes said these measures have only treated the symptoms of high prices.
"I'm sorry to say that we have been forced to conclude that the market has not moved on," said Kroes. "Competition is still very weak. Customers still get a raw deal when they cross borders. Operators still enjoy outrageous margins, particularly on data downloads."
One of the goals of the European Commission's Digital Agenda is for there to be virtually no difference between the cost of roaming and national tariffs by 2015.
The proposed regulation must be accepted by the European Council and European Parliament before it can come into force. Kroes said she hoped the regulation would be adopted before the current roaming rules expire, which is June 2012.
Why this matters
This regulation will hit European mobile operators hard. Not only will they have a new retail data roaming price cap to contend with, they will also have potentially much more competition for delivering international services.
It's also the most invasive approach the European Commission has proposed to combat the problem of high roaming charges. (See Euronews: EC's Kroes on the Warpath (Again).)
International roaming tariffs have plagued the European mobile scene for years. And the issue of data roaming has kicked off in the U.S. as well:
- EU Roaming Prices Cut Again
- FCC Issues Data Roaming Rules
- Verizon Blasts FCC's Roaming Rules
- AT&T Building Islands of LTE in 2011
- Orange Launches NFC Services, Roaming Tariffs
- DT Launches EU Data Roaming Tariff
— Michelle Donegan, European Editor, Light Reading Mobile