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Brussels, 4 February 2000

Commission launches second phase of telecommunications sector inquiry under the competition rules: mobile roaming

The European Commission has sent out formal information requests as part of its investigation under the competition rules concerning the conditions and pricing of national and international mobile roaming. Almost 200 such requests were sent out simultaneously EU-wide to national competition authorities and telecommunications regulators, as well as to mobile network operators and service providers. Recipients have a deadline of two months to reply. Mobile roaming is the second of three telecommunications areas that are currently under investigation as part of a sector inquiry under the competition rules.

Competition issues concerning roaming

Mobile roaming occurs when customers use their mobile telephone handset on a different mobile network than the network to which they subscribe, and it is based on bilateral roaming agreements between different mobile operators and service providers. The ability to enable roaming is a key feature of the GSM/DCS mobile standard that should facilitate the emergence of pan-European networks and services, and a standard model for international roaming agreements is provided by the industry's GSM Association. However, although mobile operators can now enter into roaming agreements with a number of different mobile operators in most countries, competitive wholesale and retail roaming offerings do not appear to be emerging.

The Commission has received a number of complaints that roaming charges continue to be extremely high, as well as complaints concerning collusion on roaming rates, and refusal to deal at national and international level. In November 1999, the international telecommunications users association (INTUG) completed a study comparing roaming retail tariffs with retail tariffs for mobile calls without roaming. The INTUG study indicates that for mobile consumers the difference in price between roamed and non-roamed international mobile calls to the same destination within the EU can be up to 500%. There appears to be no convincing technical explanation for such differentials at retail level, which suggests that the underlying wholesale markets are not competitive either.

The aim of the Commission's inquiry is to establish whether current commercial practices and prices concerning mobile roaming infringe the EU competition rules, in particular the prohibition of restrictive practices and abuses of dominant position (Articles 81 and 82 of the EC Treaty).

Information requests and follow-up

To obtain the necessary information, the Commission's Directorate-General for Competition has prepared extensive formal requests for information. The Competition DG has sent out on 13 January 2000 a total of nearly 200 questionnaires to national competition authorities and telecommunications regulators, as well as to mobile network operators and service providers across the EU. Addressees have two months from receipt of the information requests to reply. If the Commission finds sufficient evidence of practices or prices that constitute infringements of the EU competition rules, it will at a later stage open formal proceedings against individual undertakings (or groups of undertakings).

Sector inquiry in three steps

The Commission decided on 27 July 1999 to open a sector inquiry across the European Union covering three areas in the telecommunications sector. For practical reasons, the Commission is assessing these three areas in three phases. Following the inquiry into leased lines launched on 22 October 1999 (IP/99/786), mobile roaming is the second of the three areas to be examined as part of the telecommunications sector inquiry under the responsibility of competition Commissioner Monti. The third area involved is the provision of access to and use of the residential local loop. The launching of the local loop inquiry under the competition rules will be co-ordinated with the harmonisation work on local loop unbundling announced by telecommunications Commissioner Liikanen.

The EFTA Surveillance Authority (ESA) is organising a parallel inquiry into the same three areas of telecommunications, and the results of these inquiries will be analysed by the Commission services and the ESA jointly.

Procedural background

Based on Article 12 of the procedural regulation implementing Articles 81 and 82 (Regulation 17/62) the Commission may at its own initiative start general inquiries into sectors of the economy (sector inquiries) where it believes competition might be restricted or distorted. This provision enables the Commission to investigate suspicious pricing structures and other practices that indicate a possible anti-competitive situation may exist across an entire industry. Indications that specific companies have infringed the competition rules are not required to trigger a sector inquiry.

Once the Commission has formally decided to start a sector inquiry it has the powers to request and obtain all necessary information from Governments and competent Member State authorities as well as from companies. The Commission may fine companies or associations of undertakings if they supply incorrect information in response to a formal information request, and if they refuse to reply, or fail to reply within a deadline set by a further decision.

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