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30/08/2016

Roaming overhaul faces national hurdles, delays

Digital

Roaming overhaul faces national hurdles, delays

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Neelie Kroes, the EU's Digital Agenda Commissioner, is under intense pressure from member states that are threatening to delay or water down her proposal to abolish cross-border tariffs on mobile phone calls within Europe by 2016.

EU telecoms ministers, who were meeting in Brussels yesterday (13 December), nearly unanimously underlined the necessity to further explore technical solutions to implement key aspects of Kroes's proposal.

The new roaming regulation “should not include technical solutions but only general principles,” the ministers said.

Last summer, Kroes had proposed two important changes to the European market for mobile phone roaming services – decoupling and virtual operators.

Decoupling allows customers to switch operators when they are abroad, ensuring clients always get the best deal on offer in any given country without having to change SIM cards.

Linked to decoupling was the idea of opening competition for roaming services to completely new providers – so-called virtual operators – specialised in the sale of roaming packages.

Both provisions need technical solutions to be applied. But while time is running short – the existing roaming regulation expires in mid-2012 – an agreement on those is currently not in sight.

“We are in a hurry,” said Kroes, speaking to the EU's 27 telecom ministers during a public deliberation of the Council.

If the timeline is not respected, caps on roaming phone calls will disappear as of next summer, with the risk of bill shocks for European customers when they make cross-border mobile phone calls.

Despite the time pressure, many member states underlined that the market is not yeat ready to choose one technical solution rather than another, especially when it comes to the thorny issue of decoupling.

Big operators like Vodafone could indeed benefit from the measure by exploiting their bigger trans-European networks to lure clients from smaller mobile phone operators.

Smaller operators could face higher competition also from new entrants and risk seeing their margins dangerously trimmed. Consumers would likely benefit from lower prices in the short term but lower competition would probably reverse this trend in the longer run.

Ministers therefore suggested waiting for technical advice from the group of telecoms authorities (BEREC) before applying a specific technical solution. The experts will have to look into the technologies available to allow dual identity SIM cards that are able to support the services of both a national and a cross-border operator.

Aware of the limited timeframe, a few ministers suggested adopting a plan B if technical work took too long. “The Commission should provide options in case we cannot adopt a new regulation by July 2012,” underlined the British delegate.

Parliament hurdles

Delays on decoupling will also likely postpone the European Commission's other key proposal on virtual operators. As their name suggests, virtual operators do not have a network of their own and rely on established national telecoms firms, which have developed their network over the years.

Potential virtual operators are often active in the retail or postal services sector and include the likes of Carrefour, Tesco or Poste Italiane. Without decoupling, it would be impossible for them to enter the roaming market.

Further progress might also be hampered in the European Parliament where the MEP in charge of the roaming regulation, Angelika Niebler (European People's Party), has proposed changes that could prevent virtual operators from entering the roaming market, even if decoupling were introduced.

Niebler wants to force virtual operators to follow a number of procedures that are seen by some experts as the reason why alternative service providers have never taken off in the European roaming market.

Positions

EU Digital Agenda commissioner Neelie Kroes said technical work should now go ahead quickly to find solutions on decoupling. “I hope it will not take too long," she said. "We have to leave scope for this solution to work. We are open to examining other implementing solutions as long as they provide easy choice to consumers. I urged ministers to make progress. There is no alternative.”

BEUC, the European consumer group, has taken sides with member states on the issue of technical neutrality. “The regulation should not mention any specific solution on decoupling. It should contain just principles, such as interoperability or user-friendliness,” Monika Stajnarova, legal officer at BEUC, told EurActiv.

“For reasons of consistency and legal certainty, it should be made clear that the relevant provisions of the Access Directive, including those on non-discrimination and interoperability, apply also to the technicalities of access under this Regulation,” says MEP Angelika Niebler (European People's Party, Germany) in one of the amendments to the roaming regulation proposed in her draft report

“If this obligation was to be applied to virtual operators, the mergence of these new operators would be impossible in Europe, since the very application of the Access Directive procedures to new entrants has proved so far the cause of their exclusion from the market,” argued Innocenzo Genna, former president of the association of alternative telecoms operators (ECTA) and current representative of independent MVNOs.

Background

In June 2007, the European Commission introduced a regulation placing caps on prices of cross-border mobile calls in Europe, the so-called 'roaming regulation'.

The EU executive's intervention was limited to roaming because domestic calls remain a competence of national regulators. The first roaming regulation also excluded text messaging and data.

A second regulation entered into force in 2009, introducing further steps to gradually lower caps for voice roaming, together with guarantees against "bill shocks" for data roaming.

Last July the Commission proposed a third roaming regulation and announced plans to structurally reform the European market for roaming phone calls slashing wholesale prices and opening access to the market to new service providers.

The measures were supposed to eliminate differences for cross-border phone calls, saying that price caps will be no longer necessary as from 2016.

Timeline

  • First quarter 2012: Parliament and Council aim to approve roaming regulation at first reading.
  • Mid-2012: Current roaming regulation expires.

Further Reading