Roaming scandal: End of charges in sight?

There must be an alternative to the regulation, frustration and public dissatisfaction generated by roaming charges, says Nick White
Written by Nick White, Contributor on

Roaming charges are peculiar to comms and wouldn't be tolerated elsewhere. Their existence is all the stranger because scenarios exist that could solve the roaming problem to everyone's benefit, says Nick White.

The whole roaming issue has become a bit of a nuisance to everyone, hasn't it? Network operators, regulators and politicians have all struggled to be rid of this meddlesome priest.

Business users are still angry. The topic certainly generates good business for conference organisers — the International Telecommunications Users Group (Intug) has already presented at two this year. But is the only way forward never-ending regulation, irritated and defensive mobile network operators, political frustration, and increasingly dissatisfied customers? Isn't there a solution that pleases everyone?

Europe is reviewing its current roaming regulation, which expires in June 2012, and will shortly publish the results of its consultation that closed in February 2011. The desire of Commissioner Neelie Kroes in the EU to eliminate roaming charges in the single market is a useful step in the right direction. The European Commission will outline new plans in the coming weeks to bring EU roaming rates in line with national tariffs.

Sources said the cap on the cost of roaming voice calls in the EU would be lowered to €0.24 per minute from July 2014, a reduction of nearly 40 percent from the current cap. From July 2016, higher roaming costs would effectively be abolished for voice calls.

The draft proposal is expected to be signed off by regulators in June.

Benefits of a no-roaming world

The benefits of a no-roaming world are potentially huge. Imagine a world where there are low-cost, profitable, competitive and continuously improving international mobile services.

Imagine a world of low-risk, high-return investment for mobile network operators. Imagine multinational spectrum licences with no stealth tax sting and with no coverage obligations.

Imagine freeing regulators from wholesale and retail price regulation. That sounds great.

But just think of the benefits for the economy and for customers. No cross-border tax for multinational enterprise communications usage. Rapid growth in innovative cross-border business processes using mobile data. A cost-effective platform for machine to machine (M2M) communications in an internet of things. No handset restrictions and no bizarre avoidance behaviour needed to limit the pain. But that's not all — it could be even better.

Suppose you could eliminate notspots, and improve performance to on average 10 times faster 50 percent of the time via access to the best signal, wherever you are, from any operator, at no extra charge. Now that really would be something. You could start nationally, where the FCC has just mandated roaming in the US. And then move internationally, with the EU first, perhaps?

Shared investment

How could this situation be achieved? Well, if rollout costs are so great, and extra capacity costs are volume related, why not share investment and only duplicate infrastructure where there is economic justification? This approach might in some countries make a case for functionally separating access infrastructure for 4G.

By delinking SIM cards from the contracted operator, devices could be designed...

...to lock on to any other operator if the contracted operator signal is below a minimum level — say, 10Mbps at today's performance levels.

Anyone could use any LTE (long-term evolution) 4G network, with the terminating charge being paid, not by the customer as a roaming charge, but as a service charge paid by the contracted operator to the serving operator. Operators would be driven to extend coverage to capture notspot traffic, and to improve performance to avoid losing traffic, but in a balanced market would pay little and might receive some net revenue.

When implemented internationally, this approach would eliminate roaming charges at a stroke, and allow operators to offer service contracts in other countries without necessarily owning infrastructure there.

Some 12 years after Intug and others exposed the whole roaming-charge issue, it still remains an active regulatory topic, which is high on the agenda of users everywhere.

Submission to EC consultation

In its submission to the European Commission's latest public consultation, Intug said: "The absence of effective competition for roaming charges has meant that wholesale and retail price regulation remains essential. The behaviour of the market continues to prove this, as operators cluster together below the latest cap, while seeking to recover perceived lost revenue by pushing up roaming charges outside the EU, and for international calls from the home country, which sometimes exceed the roaming cap.

The absence of effective competition for roaming charges has meant that wholesale and retail price regulation remains essential.
– Intug

"Until a different market structure evolves, enabling business customers to secure truly international contracts on a competitive basis, Intug believes the roaming regulation in some form will continue to be necessary. The efforts of other bodies on a broader basis than the EU — for example, the OECD — and other regional initiatives, will help the process."

This long-term approach was first proposed some years ago by Stephen Temple to the UK regulator Ofcom. The rollout of the next generation of mobile services — through licences for 4G LTE — may provide an opportunity to resolve the roaming problem once and for all, based on an industry structure of a small number of major international mobile network operators, operating in every member state, and ultimately globally. However, it is a long way off.

Meanwhile, business users continue to be dissatisfied with international mobile services.

Long-term, lasting solution

Roaming will remain a nuisance topic for some years to come, but if the communications industry, politicians and regulators will only set their mind to it, and seek a long-term, lasting solution, this nuisance can be eliminated.

It is a strange concept that seems peculiar to communications and which would be completely socially unacceptable in other settings. For example, other consumer goods and services, such as food and petrol, may have different prices in different countries, but when you buy them they don't charge you based on where you've come from. But that's what happens with use of mobile communications.

Customers in particular and the overall economy in general have suffered long enough. Let's try and find a solution that fixes it once and for all.

Nick White is executive vice president of the International Telecommunications Users Group and a Communications Management Association strategic board member. He has spent more than 35 years in international telecoms, having worked for various multinationals, including Reuters, Midland Bank and Unilever. White is now an independent consultant in telecoms regulatory affairs, representing user interests at national and international level.

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