Transcript The issue of „International Roaming” in the EU

International roaming
Pál Belényesi
University of Verona
November 2006
Why do we talk about this?
 We experience high charges
 Existence of Single European Market
 11th Report on European Electronic
Communications Regulation and
Markets – indication
 Int. Roaming regulation is in process
What is international roaming?
 International roaming is the ability of
mobile phone subscribers to use their
phones whilst traveling abroad
 (National roaming is different!)
 The importance of international
roaming agreements (by MNOs)
 Wholesale level: MNOs (foreignhome) IOTs
 Retail level: Consumers traveling
Int. Roaming in the Electronic
Communications Framework
 Comm. Rec. 2003/311/EC: market No.
17 – Wholesale Int. Roaming (WIR)
 Given the particularities of the market
(buyer-seller location): concerted
practice in the ERG or Regulation
 ERG Common position on the
coordinated analysis of the markets for
Wholesale Int. Roaming – May 2005
The Commission’s involvement
 July 2004: United Kingdom – O2 and
Vodafone (statement of objections)
 February 2005: Germany – T-Mobile
and Vodafone (statement of
objections)
 December 2004: EU-wide
investigation on roaming charges –
July 2005: first result
The UK case (O2, Vodafone)
 Time period: 1997-2003
 Charge: both companies exploited
their dominant position on the market
of WIR
 Findings:
 Each mobile network is a separate
market
 Both are dominant in their networks
 IOTs are unfair, excessive, high
The UK case (O2, Vodafone) II.
 Income on IOTs
 ISPs with regards to IOTs
 Domestic roaming / Intern. roaming
 Similarity
 Enormous price difference
 Statement of objections – Hearing
June 2005
The German case (Vodafone, TMobile)
 Time period: 1997 (2000) – 2003
 Charge: Their practice may be
contrary to Art. 82. of the EC Treaty
(abuse of dominant position)
 Allegations: The companies charge
IOTs at a price being excessively high
to other MNOs.
The German case (Vodafone, TMobile) II.
 Findings:
 Each individual German network is a
separate market
 They enjoy dominant position on their
markets
 Roaming charges accumulate to higher
profits than national roaming charges
(airtime access supplied to national
roaming for other MNOs)
Commission starts EU-wide
investigation
 December 2004: (ERG) –
questionnaire sent to MNOs to
indicate roaming charges – sector
inquiry
 Reason: Serious concern about
charges
 To help NRAs to analyze
 Foretells a EU-level Regulation
 July 2005: transparency announced
General conclusions
 Retail charges are very high – no
justification
 Reductions on wholesale charges
are not passed to the consumers
 Users have no clear information
about International Roaming
charges
 Linkages between national markets
Issues
 Competitors claim more competition
to bring down prices
 Interdependence (?)
 National market specificities (?) –
GSM Association
 Prices are high at retail level
 Wholesale price reduction is not passed
onto costumers
 Traffic direction technique
Ideas
 Remedies within the framework of
market analysis (Joint dominance)?
 Gencor, CMB, Airtours
 Investigation under Article 81 could
lead to concerted practice?
 Direct Regulation at EU-level
(compare to banking)? – NRAs are
not fully equipped to deal with the
issues at national level
Action is taken
 February 2006: speech at the ERG
meeting in Paris (Reding) followed by
the official proposal of the EC on the
28th of March
 Regulation is proposed similar to
cross-border payments
 International roaming page updated
 Cost-based regulation
Problems
 What happens to those who only offer
national roaming?
 Multiple commercial agreements hard
to implement
 Missing cost data (in the NRAs)
 Retail price regulation is fortunate?
Current state of art
 Neither wholesale nor retail prices are
justified by the underlying costs of
the service
 existing regulatory tools NOT
ENOUGH
 Market cannot deliver alone
 Everyone welcomed the initiation of
the regulation safe for operators
Cont’d
 „home pricing principle”
 No pay for receiving the call
 ERG favoured wholesale regulation
instead of retail regulation
Possible content of the regulation
 Prices paid for international roaming will not be
unjustifiably higher than the charges for calls paid
within the user’s country.
 Consumers will benefit from lower prices for making
calls in the visited country, back home or to any other
EU Member State
 Prices that operators charge each other (wholesale
charges) will be considerably lower than what they
are today.
 Mobile operators will be required to provide customers
with full information on applicable roaming charges
 National regulators will also be tasked to monitor
closely the development of roaming charges for SMS
and multi-media message services (MMS)