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Digital Agenda: Commission proposes more competition, more choice and lower prices for mobile phone users abroad – frequently asked questions

Commission Européenne - MEMO/11/485   06/07/2011

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MEMO/11/485

Brussels, 6 July 2011

Digital Agenda: Commission proposes more competition, more choice and lower prices for mobile phone users abroad – frequently asked questions

A proposal for a long-term solution to the continued high cost of using mobile phones and other mobile devices whilst travelling in the EU (roaming) has been presented by the European Commission (see IP/11/835). The directly binding Regulation proposed would for the first time introduce structural measures to boost competition by allowing customers from 1 July 2014, if they so wish, to sign up for a cheaper mobile roaming contract, separate from their contracts for national mobile services, whilst using the same phone number. The proposal would also give mobile operators (including so-called virtual mobile operators, who do not have their own network) the right to use other operators' networks in other Member States at regulated wholesale prices, and so encourage more operators to compete on the roaming market. To cover the period until structural measures become fully effective and competition drives retail prices down, the proposal would progressively lower current retail price caps on voice and texting (SMS) services and introduce a new retail price cap for mobile data services. This MEMO answers questions on issues arising from this proposal.

What is roaming?

Whenever you travel abroad and make or receive a mobile phone call, send text messages (SMS – Short Message Services) or download data from the Internet using a mobile connection (for emails, surfing the web, or downloading photos, music, or films), you are roaming.

What would the proposed new roaming rules mean for EU consumers and businesses?

The proposed rules would increase competition on the roaming market in two ways:

  • From 1 July 2012, mobile operators without their own networks would have the right to use other operators' networks in other Member States at regulated wholesale prices, which will decrease significantly. This would encourage more operators to compete on the roaming market, and so lead to lower consumer prices.

  • From 1 July 2014, customers would have the option to sign up for a cheaper mobile roaming contract, separate from their contract for national mobile services, while keeping the same phone number. Consumers will therefore be able to easily compare roaming offers (independently from other mobile services) and benefit from lower prices.

The combination of these two structural measures would allow customers to benefit from a choice of competitive pan-European roaming offers, and so make the most of the potential of the Single Market. For instance, a virtual mobile operator established in Member State A will be able to offer cheap roaming services to consumers in Member State B, even if it does not provide domestic mobile services in the latter Member State.

What about retail price caps?

As a 'safety net' for customers to cover the period until competition drives retail prices down, the Commission proposes to introduce a new retail price cap for mobile data services and to progressively lower current retail price caps on voice and text (SMS) services as follows:

Current and proposed retail price caps (excluding VAT)

Current

1 July 2012

1 July 2013

1 July 2014

Data (per MB)

None

90 cents

70 cents

50 cents

Voice-calls made (per minute)

35 cents

32 cents

28 cents

24 cents

Voice-calls received (per minute)

11 cents

11 cents

10 cents

10 cents

SMS (per SMS)

11 cents

10 cents

10 cents

10 cents

How much data do I typically download when accessing the Internet?

1 MB is equivalent to roughly 100 emails without attachments, less than an hour of Internet browsing time, one minute of downloading music in MP3 format or a few seconds of video download.

How long would the price caps stay in place?

The Commission has proposed that consumer price caps would stay in place until 30 June 2016, until the structural measures become fully effective. They could be removed before that point if there were evidence that competition had developed sufficiently and delivered prices lower than the caps. Following a review in 2015, if necessary, the Commission could propose to extend the duration of any of the retail caps.

The regulated prices do not correspond to domestic prices and are of limited duration - why so cautious?

The Commission has proposed a long-term solution to the continued high cost of using your mobile phone and other mobile devices when travelling in other EU and European Economic Area (EEA) countries. The Commission is confident that long-term structural solutions (separate consumer roaming contracts and opening up networks to other roaming operators) will create more competition, more choice and lead to much lower and sustainable consumer prices below the level of the retail caps, which provide a mere safety-net for consumers until such structural measures become fully effective.

Why is the Commission proposing new rules?

The current Roaming Regulation expires on 30 June 2012. After a thorough review, and extensive consultations, the Commission concluded that the roaming market is not yet competitive enough and that consumers are paying too much. For this reason the Commission has proposed a new Roaming Regulation that would apply until 30 June 2022 and would tackle in a durable way the underlying problem of the lack of competition in the roaming markets.

How would people buy a separate mobile phone roaming contract?

As of 1st July 2014, all EU customers would have the option to sign up for a mobile phone roaming contract, which would be separate from their contract for national mobile services, while keeping the same phone number. Consumers would not be obliged to do this; but some mobile phone users may find that a different operator for roaming would offer more interesting prices or deals.

Mobile phones operators would have to inform their customers from 1st July 2014 that they had the option to buy a separate roaming contract.

From that date, if you took out a new domestic mobile phone contract, you would also at the same time be able to select a separate mobile roaming provider.

The additional competition brought through this measure would generally bring prices down, so that consumers who do not choose to buy a separate roaming contract would also benefit.

What would happen if someone was in the middle of a domestic mobile contract?

People would also have the option to immediately choose an alternative roaming provider as of 1st July 2014. If you subscribed to a package which included roaming prices other than the Eurotariff, Euro-SMS tariff or Euro-data tariff, your mobile services provider could delay the switch from the old to the new subscription (for the roaming services) for a period not exceeding three months.

How would people know about the different deals on offer?

The proposed Roaming Regulation would oblige mobile operators to inform customers that they had the option to buy a separate roaming contract as of 1st July 2014. Operators would not be obliged to inform customers about different types of contracts available from other operators, but the Commission expects that alternative roaming operators would advertise their deals in order to attract new customers and that customers would be able find an overview of the different offers available in print, broadcast and online media.

Would people keep the same number when choosing an alternative provider for roaming calls/SMS/mobile Internet?

Yes, people would keep their original phone number.

Would I need to use two different SIM cards when choosing an alternative roaming provider?

No, you would not have to change the SIM card every time you crossed into another Member State. If you decided to choose a different provider for your roaming services, you might have to be given a new SIM card, which would work for both domestic and roaming services. In this case your domestic services would be provided by your original operator, and your roaming services would be provided by an alternative operator using the same SIM card. Once you entered the territory of another EU Member State, your phone would recognise that you were abroad and switch automatically to your roaming provider.

How can I find out how much I pay for data roaming?

The existing rules require this information to be included in the mobile contract, but in practice it is often difficult to identify and compare as - for the time being - roaming is offered as part of a wider mobile bundle. Under the Commission's proposal this would no longer be the case. Roaming service providers are also obliged under the current rules to send this information to the user's mobile via SMS, an email or via a pop-up window to the computer. This free and country-specific information must be provided when the consumer enters another Member State. This would continue under the proposed new roaming Regulation, but customers would be able to easily opt out of receiving this information every time they crossed into another Member State.

What if I do not want to receive text messages on roaming charges when crossing the border?

Under the new proposal, if you do not wish to receive these messages, you would be able to easily opt-out.

Why is the Commission not dealing with the high cost of roaming in other parts of the world outside the EU? This is a very real problem for many travellers.

The EU cannot apply its legislation to countries outside the EU. However mobile operators could use the Roaming Regulation price caps as a benchmark in negotiations with operators in countries outside the EU. Moreover, the new roaming rules would, like the current rules, apply in the countries of the European Economic Area (EEA).

What would the Commission's proposal mean for the telecoms industry and mobile operators?

The proposed new rules would create more competition in the roaming market. They would help smaller operators without their own networks (virtual operators) to enter the roaming market by giving them the right to use other operators' networks at regulated wholesale prices (i.e. prices that allow them to offer commercially-viable roaming prices to their customers). This would help the development of alternative pan-European roaming offers, in particular from smaller operators and mobile virtual network operators, which in turn would increase the variety of offers available to consumers.

What about industry price caps?

Under the proposal, caps on the prices operators charge each other would be retained and would fall annually until 2014, reflecting the declining costs of providing roaming services.

Current and proposed wholesale price caps

Current

1 July 2012

1 July 2013

1 July 2014

Data (per MB)

50 cents

30 cents

20 cents

10 cents

Voice (per minute)

18 cents

14 cents

10 cents

6 cents

SMS (per SMS)

4 cents

3 cents

3 cents

2 cents

After 2014, they would remain stable until the proposed Regulation expired in 2022. Wholesale price caps could be removed as from 2018 if market data indicated that competition had developed sufficiently.

The revenue operators lose from lower roaming charges will have to be made up elsewhere. Won't this lead to higher prices for domestic services and hamper investment in broadband infrastructure?

Given the current high level of retail roaming prices, operators are benefitting from excessive profit margins. There is no justification for the claim that domestic prices would need to increase to compensate for a reduction in roaming prices as a result of EU regulation. Pricing in domestic mobile markets is established by the workings of market mechanisms, especially competition.

Nor does evidence from the past support these arguments. Since the existing EU roaming rules came into effect, domestic mobile prices have consistently fallen.

What is the size of the EU Roaming Market?

In 2009, the retail EU roaming market accounted for nearly €5 billion in revenues. This is around 4 % of the total EU mobile market.

What is an EU Regulation? Does it have to be implemented nationally?

EU Regulations are legal acts that are directly applicable in the 27 EU Member States the day after their publication in the Official Journal of the European Union. Unlike an EU Directive, an EU Regulation does not need to be implemented into national law, but is the law throughout the EU from the day of its publication.

EU Regulations are thus instruments for achieving swift and uniform solutions in the interests of the EU’s Single Market, legal certainty and concrete consumer benefits.

What happens now?

The proposed Regulation will be sent to the European Parliament and EU Council of Ministers for adoption. Once adopted, it would have direct effect in all EU Member States. The current Roaming Regulation expires on 30 June 2012.


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