EU to set limit on wholesale roaming rates for mobile

16 June 2016 | Alan Burkitt-Gray

The European Commission is reinforcing its ban on mobile roaming charges with a limitation on wholesale roaming rates because of what it sees as “market failures”.

At the same time the Commission – the executive arm of the 28-nation European Union (EU) – plans to make content fully portable, including films, music, sports broadcasts and e-books.

Commissioner for the digital economy and society Günther Oettinger added: “We want to make sure that the end of roaming charges works properly for consumers and market players. This is why we come today with a proposal on wholesale roaming markets. We count now on the European Parliament and the Council to keep the pace and adopt it swiftly.”

The Commission says its new roam-like-at-home (RLAH) rule will come into force on June 15 2017.

The Commission added: “For the abolition of retail roaming charges to be sustainable throughout the EU, national wholesale roaming markets need to be competitive and to enable operators offer retail roaming services without any charges in addition to the domestic price.”

A paper published by the Commission along with the new proposals said: “This analysis of wholesale markets shows that a number of market failures still affect the functioning of these markets (such as their oligopolistic character, combined with the bilateral nature of roaming agreements and the lack of wholesale substitutes).”

The Commission’s analysis says that “the negotiating position of the net senders of roaming traffic, including the weaker market players on wholesale roaming markets, may in fact deteriorate under RLAH if countervailing measures are not applied. This could in turn distort the functioning of the home operators’ domestic markets.”

It adds: “Any rules on the wholesale market should ensure that visited operators are able to recover the costs incurred in providing wholesale roaming services, including joint and common costs.”

The Commission’s proposed regulation says: “The current functioning of wholesale roaming markets could affect competition and investments in home operators’ domestic markets due to excessive wholesale roaming charges compared to the domestic retail prices applied to end users. This applies in particular for smaller or net out-bound operators, thus making RLAH structurally unsustainable.

“Operators should be given the alternative to negotiate innovative wholesale pricing schemes which are not directly linked to actual consumed volumes, such as flat payments, up-front commitments or capacity-based contracts, or pricing schemes that reflect variations of demand across the year.”