EESC Public Hearing on EU mobile roaming system 23 October Christian Salbaing Deputy Chairman, Hutchison Whampoa (Europe) Limited
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1 EESC Public Hearing on EU mobile roaming system 23 October 2013 Christian Salbaing Deputy Chairman, Hutchison Whampoa (Europe) Limited
2 Three Group in Europe Networks in six European countries: UK, Ireland, Italy, Austria, Sweden, Denmark A challenger network with 25.6 million subscribers in Europe as at 30 June 2013 Retail prices are lowest in EU countries where Three is present (Source: OECD 2011)
3 EU Roaming Timeline 1999: DG Competition launches investigation into the wholesale roaming agreements between large operators. July 2007: Roam I introduced wholesale and retail caps for voice roaming and transparency obligations. July 2009: Roam II reduced wholesale and retail voice caps and extended caps to SMS and wholesale data, introducing per second and per KB billing and added measures against bill shock. July 2012: Roam III further lowered wholesale and retail caps for voice and SMS as well as wholesale data caps, added retail data caps and decoupling (ARP and LBO) to introduce competition in the market. Sept. 2012: Draft Roam IV would reverse the pro-competitive approach of Roam III by exempting agreements between large operators and halting the reduction in wholesale caps, putting at risk the competition gains of the last 15 years.
4 Three Group campaign since 2008: Data roaming is a barrier to the Single Market
5 The wholesale rates charged by incumbent groups are a barrier to low roaming prices
6
7 Wholesale caps ( cents) Source: EC, Rewheel (2013) Caps have fostered competition but have not gone far enough Wholesale data (per MB) Wholesale voice (per minute) Wholesale SMS (per SMS)
8 Source: EC, Rewheel (2013) Retail caps ( cents) Consumers have benefitted but not enough Retail data (per MB) Retail voice calls made (per minute) Retail SMS (per SMS)
9 Mobile data ( /GB) Wholesale data caps compared to EU-wide retail prices Average retail prices of 5-9/GB in Three Group countries yet 2013 wholesale cap is 150/GB Wholesale roaming Retail national
10 Roam IV Will not end roaming or high roaming prices. Favors operators with large footprints and undermines the competitive position of other operators and alternative roaming providers. In effect, rewards the players that created the roaming problem in the first place. Undermines the Roam III pro-competitive decoupling solutions and potentially excludes a large proportion of European customers from a competitive roaming market. Incentivizes anti-competitive behavior by destroying the competitive level playing field. Relies on agreements between large operators to bring down roaming prices. This has not worked in the past and will not work now.
11 How can we end excessive roaming charges? By enabling competition between all operators, not just a few By giving all operators the opportunity to offer low tariffs, including roam-likeat-home throughout the EU, by continuing to reduce wholesale price caps Competition comes from challengers such as Three: Three invented Roam- Like-Home back in 2008 with 3 Like Home and now Feel At Home. But because of high wholesale prices, Three can only offer RLH in countries where it controls the wholesale costs, i.e. in countries of Three Group s footprint. RLH is what Roam IV seeks to achieve but won t. Incumbents with larger footprints could already have offered RLH in far more countries, but they don t.
12 Lower caps are proven exemptions for incumbents are anti-competitive Wholesale caps have created conditions for a more competitive market and will continue to work With lower wholesale rates challenger operators can make roam-likeat-home an EU-wide proposition The Commission s aim to eliminate high roaming prices can be achieved without undermining consumer choice and competition All consumers need to benefit, without having to change operator
13 Three Group s proposal: continue with lower wholesale caps Voice ( /min) SMS ( /SMS) Data ( /GB) July 2010 July 2011 July 2012 July 2013 July 2014 July With lower wholesale costs roam like home becomes affordable across all Member States. 13
14 Thank You
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