Tuesday, May 19, 2015

Global Trends in International Roaming

 As 2015 began, it looked as if roaming charges within the European Union would soon be a thing of the past. The movement to establish “roam like at home” (RLAH) service—meaning that mobile users traveling abroad in member states would pay the same rates for voice, SMS and data that they pay their operator in their home country—began in 2007, motivated in large part by consumer discontent. In 2014 the anti-roaming movement, spearheaded by European Commission telecommunications chief Neelie Kroes, gained momentum, with voice roaming charges cut by 25 percent and those for data by 50 percent in July. Two months earlier, as a culmination of the gradual phasing-out process that had begun in 2007, the 28-member Commission voted to abolish roaming charges completely by the end of this year.

However, it now appears that the excitement was somewhat premature and that the practice of charging for international roaming will not imminently come to an end in the EU. In January 2015 the EC indicated that the December 2015 target date would be pushed back, and a proposal from Latvia, which holds the rotating presidency of the body, mentioned mid-2018 as a possible new goal.

The backing away from the original timetable was brought on by objections from member states and was motivated by factors both economic and technological. One of those is the economic and geographic differences between member states. Among the roaming dissenters were Finland and Croatia; situated on the borders of the EU, both countries have more citizens traveling outside the Union than within it, so that RLAH would cost them more than it would save. Another objection to ending roaming now is the lack of spectrum uniformity across the EU, which makes it more difficult and consequently more expensive (in terms of interconnection fees) for operators to connect their signals across borders.

On the other hand, in certain regions outside Europe we have seen smaller-scale attempts to reduce or eliminate roaming charges, an indication that anti-roaming sentiment exists in many if not all markets and that roaming charges will continue to be eroded over time. In January, the East African Community (EAC) countries—Rwanda, Kenya, Uganda and South Sudan—launched an initiative called One Area Network that provided “roam like at home” voice service to mobile callers from any one of the four countries while traveling in any of the other three. In April the initiative was expanded to include data. Russia has also established no-roaming agreements with neighboring countries in Eastern Europe and Central Asia, while in February Japan and Australia discussed lower roaming costs—especially for data—between the two countries in advance of the 2020 Tokyo Olympics.

Anti-roaming measures are generally seen as a victory for consumers at the expense of mobile operators, and indeed MNOs have vociferously objected to the lowering or eliminating of roaming surcharges on the grounds that they reduce revenues and thus make it harder to invest in the building up of network infrastructure. It is true that better infrastructure will permit lower interconnection fees and thus enable operators to lower roaming fees without damage to themselves, but governments must also participate by auctioning spectrum in such a way that there is more frequency uniformity across borders. From the operators’ point of view, the anti-roaming delay in the EU at least gives them some time to prepare for the inevitable. And politics aside, an important reason why it is inevitable is the increasing presence of public Wi-Fi networks worldwide. Used in conjunction with OTT services including VoIP, this type of connectivity will cause cellular roaming to be less and less necessary over time.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance. Click here to contact a Tarifica Analyst

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