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Regulators Reshape Europe's Roaming Market

Michelle Donegan
LR Mobile News Analysis
Michelle Donegan

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).)

For more
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:

— Michelle Donegan, European Editor, Light Reading Mobile

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Michelle Donegan
Michelle Donegan,
User Rank: Light Beer
12/5/2012 | 5:37:50 PM
re: Regulators Reshape Europe's Roaming Market

The EC's Neelie Kroes (aka Steely Neelie) made some progress on her plans for new roaming rules. A preliminary agreement has been reached with the EU Parliament and Council and they're expected to approve the new rules in May and June, respectively.



That means the new rules would come into force in July this year. 

So are mobile operators ready?


User Rank: Light Beer
12/5/2012 | 5:00:04 PM
re: Regulators Reshape Europe's Roaming Market

It's about time the European Commission learnt some basic economics. Mobile operators are like any other business, and need to make a certain return on capital to attract continuing investment. Competition in the mobile industry is intense, and any margin lost on roaming charges will have to be recovered elsewhere.

Forcible reductions on roaming charges will lead to higher charges elsewhere, probably for domestic calls. It’s no coincidence that some leading beneficiaries of this measure will be expatriate Eurocrats working in Brussels- who make lots of roaming calls to family and friends- and who already benefit from fat salaries and favourable tax treatment. How dare the European Commission force ordinary consumers to subsidise these privileged bureaucrats.

User Rank: Light Beer
12/5/2012 | 4:59:33 PM
re: Regulators Reshape Europe's Roaming Market

So does this mean that North American subscribers will be able to choose between roaming providers when they travel to Europe or are they exempt because the home subscription is outside of the EU ?

I for one would welcome anything that reduces my wonderful $100 for 25MB ($4/MB) price gouge from my current service provider. Anything around a $1 looks very appealing !

No, I am not a Eurocrat on a fat salary, just a telco employee who has to travel for work and is tired of getting ripped off all the time. I'd welcome some price competition.

The reality is that the cost of airtime is the same between a roaming subscriber and a non-roaming subscriber. I'm not familiar with the inter-operator cost over GRX (but I suspect someone here is), but I doubt that the wholesale price is more than the retail price of the local market, which means that roaming subs are actually subsidising retail subs. Happy to be proved wrong if someone wants to shed more light on it :)

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