Leaked Draft Would ‘Fine Tune’ Reding’s Mobile Roaming Proposal
BRUSSELS -- News that the EC had shifted its stance on regulating international mobile roaming rates took mobile industry representatives by surprise here Tues. In a late- afternoon panel at a mobile regulation and competition conference, European Telecom Network Operators’ Assn. Dir. Michael Bartholomew waved -- but didn’t share -- the text, leaving many to wonder what had changed from a controversial plan floated earlier. A source close to the EC later confirmed details have been “fine-tuned.” A Commission spokesman said the document -- not officially public -- merely details principles Information Society & Media Comr. Viviane Reding announced in Feb.
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The draft is being circulated in an internal document to EC officials, and more changes could come before Reding formally presents them by the end of June, we're told. Persons familiar with the proposed plan said the mobile roaming plan would introduce a cap on wholesale fees, based on national mobile termination rates (MTRs) already set for dominant operators, the source said. Every 18 months, the EC would determine an EU average MTR. The original proposal asked for cost orientation at the wholesale level but would have required national telecom regulators to calculate real costs in detail, said the source close to the EC.
The main change to Reding’s draft is on international calls, the source said. Originally, international roaming charges for a call from one EU country to another would have been replaced with the applicable charge for an international call. That provision has been adjusted to cut the roaming charge to the rate for domestic calls and to restrict operator profit to 30%, the source said. Consumers should see a major drop in roaming fees, as most calls are made back to their home countries.
According to informed sources in Brussels, the new proposal sets the maximum wholesale roaming cost for a local call at twice the mobile termination rate at national level. International calls would be 3 times the mobile termination rate, with both changes to take effect next year. The EC’s original plan was for a flat 0.30 Euro fee for both types of call. The plan also will include retail price controls, officials said. People who attended the Commission meetings said the Commission remains undecided on whether to include price controls on receiving data such as e-mail while traveling.
It was unclear Tues. whether the changes will silence critics of Reding’s plan. Regulators endorse her aims but not her means, said European Regulators Group (ERG) Chmn. Kip Meek. Regulators had apparently seen the tweaks -- Meek said they take the right direction but need work -- but aren’t sure if they can support the proposal. “The politics of the roaming decision loomed very large” in the draft rule circulating around the EC, Meek said. The home principle, if adopted, will play very well with a certain level of European decision-maker, he said.
Industry, which was very slow to respond to numerous signals from the EC and others on excessive roaming charges, has only itself to blame for its situation, said Meek. The ERG would rather operators removed the need for regulation, he said, calling EC intervention a “very retrograde step.”
The home principle sparked concerns in some quarters and the EC is weighing those concerns, said Stephen Banable of the Information Society & Media directorate-general. A key response to the EC regulatory proposal came from the ERG, which urged action on wholesale regulation but a wait-and-see attitude on retail rules, said Banable, who heads the project on mobile roaming. There was a “mixed response” from the mobile industry. Some operators support wholesale regulation, some self-regulation, but most oppose any controls, he said.
The issue is significant for industry and consumers, Banable said. GSMA data peg the international roaming market at 8.5 billion ($10.6 billion). The EC has several problems with roaming fees, he said: (1) Wholesale and retail prices aren’t justified by their underlying costs. Operators pay around 5 Euro cents to receive roaming calls, consumers 50-60 cents. (2) Rates aren’t clear to consumers. (3) Rates don’t give consumers a similar experience when roaming and making domestic calls.