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Brussels, 11 July 2005
What is international mobile roaming?
International roaming refers to the ability to use your mobile phone when abroad on holiday or on business. Because your home network operator does not provide service in the country in which you are travelling, when you make or receive a call abroad, you are using the network of an operator in that country, i.e. you are ‘roaming’ on the foreign network. For providing this service, the foreign network operator will charge a wholesale rate to your home operator who will, in turn, charge you a retail rate.
Is international mobile roaming technically different from national roaming?
National roaming generally refers to a situation where two mobile network operators, operating within the same country, enter an agreement which allows customers of one operator to ‘roam’ onto the network of the other operator where the first operator does not have coverage. For this service, the first operator has to pay a charge to the second operator.
International roaming is required when the two operators concerned operate in different countries.
Are international mobile roaming charges too high?
In many cases, international roaming charges are very high and – as recently noted by the European Regulators Group (ERG), a body established by the Commission to advise on the regulation of markets for electronic communications – often without clear justification.
In general, international roaming charges are much more expensive than normal domestic charges. There can also be significant variations in the retail charges. The table attached presents some typical roaming charges. These are standard prices taken from operators’ websites in July 2005 for illustrative purposes only. The Commission acknowledges that some operators also offer special international roaming packages and that this could be a signal of first movements in the markets.
Why does the Commission now tackle transparency?
International roaming charges can be very complex. The Commission is tackling this issue because it believes that complexity can prevent competition from acting effectively in the market.
Roaming enables customers to make and receive calls throughout Europe and today, not enough is being done to help consumers make an informed choice. This is particularly important as we approach the peak holiday season.
The Commission therefore welcomes that national telecom regulators have meanwhile agreed to work on transparency of retail prices. In addition, the Commission intends to provide, from autumn 2005 onwards, a website which will inform consumers about retail prices charged by operators in the EU and also give consumers information about other institutions and organisations which can help consumers make an informed choice when they use their mobile phones abroad.
The Commission’s initiative on transparency in international roaming will give the market an opportunity to evolve further and should encourage operators to pass savings made at the wholesale level onto consumers. The transparency initiative is therefore an initiative which could make regulation of international roaming unnecessary.
What has the European Commission done so far about international mobile roaming charges?
The Commission is actively using its own investigative and enforcement powers to combat anti-competitive behaviour by specific network operators under the competition rules of the EC Treaty. Following a sector-wide competition inquiry into international roaming, the Commission carried out inspections in 2001 and 2002 at the premises of several mobile network operators and of the GSM Association.
Initial evidence showed some indications that operators could be abusing their dominant position by charging unfair wholesale tariffs. This led to more thorough investigations, as a result of which the Commission sent “Statements of Objections” in July 2004 and February 2005 to the Vodafone Group plc, mmO2 plc and T-Mobile regarding the roaming charges they applied to other mobile operators in the UK and/or Germany. See IP/04/994 and IP/05/161.
The Statements of Objections set out the Commission’s preliminary position that these operators may have charged excessively high wholesale tariffs, thus keeping retail roaming charges paid by the EU consumers at unduly high levels. These proceedings (based on Article 82 of the EC Treaty) are still in progress, pending the defence and/or the corrective action envisaged by the companies in question.
Regulatory framework for electronic communications (the “EU telecom package”)
Unfair wholesale charges could also be addressed using the regulatory framework for electronic communications, which came into effect in July 2003 (in May 2004 for the new Member States). Under this framework, national regulatory authorities must analyse their relevant markets to determine the effectiveness of competition before deciding whether to impose remedies.
The Commission has been encouraging the national telecom regulators to complete their analyses of this market. In December 2004, following work within the European Regulators Group (ERG), national regulatory authorities issued a harmonised questionnaire addressed to European mobile operators. See IP/04/1458.
In the light of the joint work of national regulators, the European Regulators Group adopted on 27 May 2005, at its meeting in Bled/Slovenia in the presence of the Commission, a “Common position on international roaming”. The European Regulators Group concluded that:
On this basis, the European Regulators Group decided to intensify its efforts to find a harmonised approach to the regulation of mobile international roaming services. Drawing on their common approach, the national regulatory authorities will now proceed to analyse their national markets, notifying the Commission of their planned decisions in due course.
The European Regulators Group has also established a project team to identify measures to improve tariff transparency. Regulators will discuss progress at the next meeting of the European Regulators Group in September and will consider at that time whether further development of their common approach is necessary.
What has been the impact of the Commission initiatives on international mobile roaming charges?
There are some signs that the market is beginning to become more competitive. A few large European operators have recently introduced simplified tariff packages which appear to offer the consumer a better deal. However, it is still too early to gauge the effects of these initiatives on roaming tariffs. The Commission believes that substantially more progress from all mobile opearators in Europe is both necessary and possible. This is why the Commission today started its initiative on retail price transparency.
[all rates as per operator websites, July 2005]