International Roaming in the EU: Historic Overview, Challenges, Opportunities and Solutions
13 Pages Posted: 24 Mar 2016 Last revised: 16 Aug 2016
Date Written: March 22, 2016
As technology evolves and globalization continues, the need for reasonably priced roaming services has never been higher. In 2007, the European Commission (EC) introduced a first set of regulatory decisions to cap the maximal additional roaming fee end users have to pay for calling. In the years after, additional price caps have been introduced for SMS and data, initially only for end users, in a later stage also for the inter-operator tariff. The final step, named Roaming Like at Home (RLAH), will start to take effect in June 2017, from then end users will pay the same price (for voice, SMS and data) when roaming like in their domestic country.
The effect of RLAH on the business case of each mobile operator is hard to predict, as the different national markets are extremely heterogeneous and operators face large discrepancies in terms of roaming usage due to different traveling patterns and various other reasons that cannot be harmonized (geography, economics, working force, usage history, etc.). Furthermore, competition in the telecom market will no longer be a purely national matter, as the decision to abolish roaming tariffs will expose operators to other players within Europe.
This paper aims at providing insights in the effect of RLAH for both the end user as well as the mobile operators. Following a literature survey approach, including a detailed overview of the roaming regulation process from 2007 up to now, the paper discusses possible effects the RLAH initiative might trigger, going from lower wholesale prices for mobile operators to higher retail prices for end users. Additionally, as the European Commission strives for a single European market, this paper presents a number of technical solutions (carrier portability, software-based SIMs, cross-border IMSI) that pose an alternative for roaming and explains how these may impact cross-border competition both positively and negatively. The solutions are assessed against two axes: (1) generating the best possible outcome for the end customers (in all countries), and (2) ensuring the best level playing field for (virtual) mobile operators in Europe, which will of course involve trade-offs on different levels.
Keywords: roaming, policy, Europe, MVNO
JEL Classification: D40, E61, K23
Suggested Citation: Suggested Citation