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Consumers happy, industry less so on roaming regulation

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Published 29 March 2006 - Updated 31 January 2007
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mobile telecoms roaming
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Consumers and private telecom operators are happy about a Commission proposal to bring down the costs for using a mobile phone abroad. Network operators say the proposal will harm their industry.

In reaction to what she considers failed appeals to mobile network operators' good will, Ms Reding proposed, on 28 March 2006, "an EU regulation [to] be used to eliminate all unjustified roaming charges". 

The regulation aims at bringing international roaming charges, both on the wholesale level and on the consumer level, down to the prices charged for national mobile roaming,  which occurs when a user is outside the reach of his or her operator's network. Ms Reding said: "A mobile phone customer should not be charged a higher tariff just because he is travelling abroad."

Positions: 

Jim Murray, the director of BEUC, the European Consumers' Organization, is happy with the Commission initiative: "The regulation is a very good initiative, as people have been getting ripped off for ages on these charges. The consumer experience shows a lack of transparency, excessively high tariffs, and a lack of real choice and competition in this area."

The GSM Association (GSMA) the mobile industry’s global trade association, called the Commission proposals "unprecedented, unnecessary and heavy-handed". GSMA CEO Rob Conway said: "Enabling consumers to use their mobile phones on a pan-European basis is a value-added service and mobile operators should be able to charge a market-rate for this service. Moreover, it is inappropriate to regulate tariffs at a pan-European level as the commercial and regulatory factors in each national market are different."

ETNO, the incumbent telecom network operator's association, said the Commission proposal was missing a proper impact assessment. ETNO Director Michael Bartholomew said: "The aim of the regulatory framework was to establish a single legal framework for all e-communications services in order to streamline procedures and create a level playing field. Taking action outside of the regulatory framework would bring uncertainty for operators. Such a heavy intervention, at both the wholesale and retail levels, would be unprecedented in the mobile market and appears disproportionate. It risks hampering competitiveness of the industry."

ECTA, the association bringing together the non-incumbent competitors to ETNO members, is in favour of regulation on international mobile roaming. ECTA Managing Director Steen Clausen said: "We recognise the urgent need for the Commission to propose additional ex ante regulation ahead of the wider review of the telecoms market.  It is vital that this intervention focuses on empowering greater competition in the market and this requires that mobile virtual network operators should be permitted to enter directly into roaming agreements. Regrettably this is not possible in most member states, including many where those markets were previously validated by the Commission."

Next steps: 
  • In a 20 February - 22 March 2006 consultation, operators and users of mobile telephony have had a chance to speak out on international roaming tariffs.
  • A second phase of consultation will be open from on 3 April until 28 April 2006.
  • The Commission is still working on a detailed impact assessment for the regulation. After it is presented, the proposal could be adopted in June. It will require the approval of the Parliament and the Council.
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Background: 

International roaming occurs when a person uses a mobile telephone network in a country other than the one where the person's mobile phone is registered. On a wholesale level, network operators - typically the incumbent telecom operators - charge other companies different and sometimes quite high prices for the use of their networks. These prices are then handed down to consumers, who quite often do not know how much they will be charged for a call made or received abroad. 

On a general level, the Commission considers prices for international mobile roaming too high and lacking in transparency. In October 2005, Information Society Commissioner Viviane Reding launched a roaming charges clearinghouse on the internet and warned that "the European Commission cannot tolerate unjustifiably high prices [...]  I expect to see substantial progress in the market by [the beginning of April 2006]." March 2006 figures show, however, that the prices are not diminishing but in some cases are even rising. In reaction to this, Commissioner Reding has proposed a regulation to bring them down to the level charged for national calls.

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