International Roaming Charges: Frequently Asked Questions

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1 MEMO/06/144 Brussels, 28 March 2006 International Roaming Charges: Frequently Asked Questions What is international mobile roaming? International roaming refers to the ability to use your mobile phone when abroad on holiday or on business. Because your home network operator does not provide service in the country in which you are travelling, when you make or receive a call abroad, you are using the network of an operator in that country, i.e. you are roaming on the foreign network. For providing this service, the foreign network operator will charge a wholesale rate to your home operator who will, in turn, charge you a retail rate. Is international mobile roaming technically different from national roaming? National roaming generally refers to a situation where two mobile network operators, operating within the same country, enter an agreement which allows customers of one operator to roam onto the network of the other operator where the first operator does not have coverage. For this service, the first operator has to pay a charge to the second operator. International roaming is required when the two operators concerned operate in different countries. Technically speaking, when a visitor from another country uses a mobile phone to make local calls (to fixed or mobile phones within the country he is visiting) the situation is the same as for national roaming. There is no significant international component of such a call: it is connected in the same way as any national roaming call. It is only the bill for these local calls that needs to be passed to another country, and to the operator with whom the visitor has his account. Yet in many cases, the per-minute tariffs charged for making such local calls are similar to those charged for international roaming. Seen from a consumer s point of view, this situation is particularly problematic. No one would expect to be paying international roaming rates when using their mobile phone for making local calls, e.g. to book a restaurant, call a taxi, or to chat to friends living near to where they are staying. 1

2 Are international mobile roaming charges too high? For several years now many stakeholders have complained that consumer prices for international roaming in Europe are excessive, and show no signs of diminishing. For example, the European Regulators Group (ERG), a body of national telecom regulators established by the Commission to advise on the regulation of markets for electronic communications adopted on 27 May 2005, at its meeting in Bled/Slovenia in the presence of the Commission, a Common position on international roaming in which it concluded that: Retail charges are currently very high without clear justification. This appears to result both from high wholesale charges levied by the foreign host network operator and also, in many cases, from high retail mark-ups charged by the customer s own network operator. Reductions in wholesale charges are often not passed through to the retail customer. Consumers often lack clear information on the charges for roaming. There are strong linkages between the markets in the different Member States. See For further information on the activities of ERG, see Despite some operators offering special international roaming packages, in general international roaming charges are much more expensive than normal domestic charges. There can also be significant variations in these roaming charges. What has the European Commission done so far about international mobile roaming charges? In addition to drawing the industry s and the public s attention to the level of these charges, the Commission has taken a number of concrete steps aimed at bringing these prices down. For example, the Commission is actively using its own investigative and enforcement powers to combat anti-competitive behaviour by specific network operators under the competition rules of the EC Treaty. These investigations are ongoing. To enhance price transparency for consumers, the Commission has published a consumer-oriented website which not only corroborates the fact that these charges are in many cases manifestly excessive, but shows a range of prices across the EU that cannot be justified in a competitive market for calls with identical characteristics in terms of quality, time of day, and duration. The latest version of the site, made available on 28 March, confirms that little progress has been made on these charges, and that in fact some have increased since the site was first published in October See The unsatisfactory development of international roaming shows that firmer action is needed. The Commission is now proposing a single market solution in the form of an EU regulation to eliminate unjustified international roaming charges. 2

3 What has been the impact of the Commission warnings on international mobile roaming charges? Since the launch of the roaming website in October last year, there has been little sign of reductions being made in the prices charged for roaming. A few large European operators have introduced simplified tariff packages which appear to offer the consumer a better deal. However, these packages have not widely been taken up by consumers since most of these tariffs are offered on an opt-in basis or may have an additional monthly charge attached to them. Why update the roaming website? In launching the Commission s roaming website last October, Commissioner Reding had stated that a further snap-shot of the situation would be taken in six months time. The updated website reviews whether or not there have been any tariff changes from those that gathered previously. In response to suggestions received from consumers on how to enhance the website and make it more useful, pre-paid tariffs and SMS tariffs have now been added. Moreover, two further countries and a number of additional operators have been now been included to better cover the range options for meeting consumer s needs. What are the main changes to the website? A wider range of tariffs have been included in the updated website. Consumers can now compare the price being charged for post-paid calls billed to their monthly accounts, with those for pre-paid pay as you go schemes, both for calling to their home country whilst abroad and for receiving a call while roaming. In most instances the price for pre-paid calls is even higher than that for post-paid calls but this is not always the case. In general today, consumers really do need to check rather carefully to see which scheme and which operator offers the most favourable rates for any given situation. The updated website also includes the prices for SMS post-paid and pre-paid tariffs since this service has become a very important communication tool, particularly for younger mobile users. What is the main message that can be taken from the updated website? In a nutshell there has been very little improvement of international roaming tariffs since the website was first launched last October. In some cases, prices have even gone up. Why not include all roaming tariffs on the website? The aim of the website is to provide user-friendly information to consumers and to raise awareness of the different tariff structures that exist. It is a way of empowering consumers to seek a better deal. There are thousands of roaming tariffs available in Europe. For comparison purposes it would have been far too complex to cross compare the full range of tariff packages currently on offer. Operators adopt different marketing strategies, which makes a clear and direct comparison of tariffs for certain roaming packages virtually impossible. In the website, we have introduced a sub-section on these innovative tariffs. Nevertheless we would urge consumers to seek more complete information either from the operators websites or else by contacting them directly, to ensure that they are aware of what is currently on offer. In general, most consumers are still charged the higher standard tariffs for roaming, unless they pro-actively opt for a special package. 3

4 Why hasn t regulation of roaming charges at national level been successful? International roaming services differ from virtually all other telecoms services in one respect. A customer buys the services of an operator in his home Member State. However, when he or she travels abroad, it is another foreign operator that provides facilities for making and receiving calls, and bills the home operator for this wholesale service. The price of these wholesale services has been traditionally high, with correspondingly high retail charges being passed on to the customer in the bills received from his or her own operator. National telecoms regulatory authorities, which are required under the EU framework to define and analyse telecoms markets and impose regulatory obligations where competition is not effective, have so far also been unable to act in relation to this particular market. This may at first sight seem surprising, given that they have been able to regulate other parts of the telecoms market effectively, with positive results for consumers. However, on closer examination it is clear that a major problem is the fact that the components of the service are made up of elements supplied in at least two Member States, the home and the visited. This means that no single national regulatory authority has the power to regulate all components of the price down. What is the Commission now doing to eliminate unjustified international roaming charges? In February, Commissioner Reding announced to the European Regulators Group (ERG) that the Commission had started work on an EU regulation on international roaming charges which would be proposed to the European Parliament and the European Council as soon as possible. Full text of Commissioner Reding s speech to the ERG in Paris on 08 February: SPEECH/06/69 To assist with the preparation of this regulation, a first phase of a public consultation was launched on 20 February on what form the regulation could take. This first phase came to a close on 22 March and allowed the Commission to further specify its proposed regulatory measures. More than 50 contributions were received from operators, consumers, trade associations, national telecom regulators and Member States. On the basis of an outline of the forthcoming regulation, the Commission will now launch a second phase of its consultation on 3 April. This second phase will be open to all interested parties until 28 April The Commission then aims to formally propose a Regulation to the European Parliament and Council by the end of June. A Regulation is the strongest legal instrument available to European legislators. Once adopted by the Council, a Regulation comes into immediate effect in all Member States. Unlike Directives, Decisions or Recommendations, a European Regulation requires no transposition into national law and is immediately binding in its entirety. There is therefore no implementation delay or any scope for national interpretation of the rules applicable, unless the regulation explicitly calls for complementary action by Member States. 4

5 What about the ongoing competition investigations regarding international roaming? The Commission launched a wide antitrust sector inquiry in 2000 into the level of retail and wholesale roaming prices in Europe because of concerns that they were excessive. The inquiry led to the opening of separate antitrust proceedings under EC Treaty rules on abuse of monopoly power (Article 82) against mobile operators in Germany and in the UK for excessive wholesale international roaming tariffs. Up to now, these proceedings have involved the issuing of a number of Statement of Objections (see IP/04/994 and IP/05/161) and are still on-going. In addition, since 2004 the Commission has been looking at the two strategic alliances created to improve international roaming services ( Starmap and Freemove ) to ensure that that they are compliant with EC Treaty rules on restrictive business practices (Article 81). What is the Commission s advice to consumers until the new EU Regulation is in force? Our website continues to encourage consumers to seek the best possible deals when roaming and to inform themselves prior to travelling to ensure that they do not receive hefty bills. In a nutshell the Commission s advice to consumers is: - Always check for different packages and if you a regular traveller consider switching operator while retaining the same number - Check the cost for making a call back home and also for receiving a call. - Learn how to manually select operators with the lowest tariffs in your destination country - Check whether its possible to switch from pre-paid to post-paid while on holiday - Remember to de-activate your voic if you are not going to make use of this service while roaming. - Consider buying a local SIM card - Consider sending text messages though these can also be considerably more expensive than your home rates 5