Countdown to July 2014: A Primer on the New EU Roaming Regulations

Filed in Roaming by on August 21, 2013 3 Comments

In less than a year, the roaming market in Europe will undergo a massive change, when the economic boundaries that govern the roaming rates between many countries will be broken down. Consequently, end users will gain an unprecedented level of choice and freedom with their roaming providers, introducing an unknown dynamic to the European roaming market.

On July 1, 2014, what is being called “EU Roaming Regulation III” will lower the limits on roaming charges paid by consumers in the European Union (EU) and European Economic Area (EEA). What’s more, EU residents will be allowed to buy roaming services from a carrier besides their regular operators, an attempt to create competition in the market that will lower prices.

The European Commissioner for Telecommunications, Neelie Kroes, said the reductions in retail price caps, especially the limit on data roaming, could save some European families €300 during a one-week summer vacation outside their home countries. Moreover, business travelers in Europe will save on average about €1,000 a year in roaming charges, Kroes said.

The new regulations represent a seismic shift for the European mobile services market that will have powerful and long-lasting ramifications. As we progress through the countdown to this change, I would like to kick off what will be the first of multiple posts on this topic with a simple overview of the key changes, challenges and opportunities that the new regulations are bringing.

First, let’s take a quick look at the major changes to come and some that have already taken effect:

  • Since Jan. 1, 2013, all EU and EEA MNOs have been required to have a standard reference roaming agreement available to EU and EEA partners, and required to be able to connect within three months with access seekers (MVNOs, resellers and MNOs) within the EU and EEA.
  • Starting on July 1, 2014, MNOs in the EU and EEA will have the opportunity to establish themselves as local breakout providers to offer mobile roaming subscribers local data access known as visited public mobile networks. These networks will establish a direct mobile data service delivery and invoicing relationship with the home public mobile network’s subscribers. Home public mobile networks will continue to provide voice, SMS and certain data services, like BlackBerry or MMS services.
  • Also beginning on July 1, 2014, MNOs and MVNOs in the EU and EEA will be obliged to provide access for alternative roaming providers to serve their mobile subscribers with roaming services on their existing IMSI or SIM card, also known as a single IMSI solution. While  subscribers can keep their normal mobile operator as a domestic service provider when moving to another country within the EU or EEA, the mobile service provider can be an alternative roaming provider, such as an airline or a cable TV company. The domestic service provider is obliged to give the alternative roaming provider with retail and wholesale billing data for postpaid and prepaid subscribers as well as welcome SMS within the EU and EEA and bill-shock prevention anywhere in the world.

The new regulations will also bring several challenges to operators within the EU and EEA:

  • Material decline of both retail and wholesale roaming revenues due to ongoing price caps.
  • Reduction of roaming margins due to the obligation to provide wholesale roaming access at regulated tariffs.
  • Need to use resources to fulfill regulation obligations rather than for commercial priorities.
  • Arrival of new competitors that may be prepared to work with much lower margins, or even with a loss, to be able to sell other higher-margin services.

With the above challenges properly addressed, the regulations may also provide some interesting opportunities:

  • Implementing local breakout of data at competitive rates to attract inbound roamers who otherwise would never register onto a network due to traffic steering, and at the same time get access to their voice and SMS usage.
  • Partnering with local breakout providers with an existing customer base or well-known brand name to attract new customers.

One of the most critical questions to be answered is, of course, will this transformation led by the EU Commission mean that we will see a whole new set of players in the European roaming market to the  benefit of consumers? For example, will airlines start bundling flights to EU destinations with roaming packages? Or will media conglomerates with mobile services throw in roaming for free if you buy their sports and movie packages? Or, conversely, will mobile network operators be forced to implement a number of complex technical interfaces without anyone wanting to use them?

How game-changing do you think these impending regulations will be? What are some of your predictions for impacts of the regulations?

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About the Author ()

Christer Gullstrand is a former Senior Director of Industry Relations and GSMA Liaison Officer at Syniverse.

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