re: GSM Roaming Reform in EU
>> EU Continues To Examine Roaming Charges Despite Steps Taken To Simplify Tariffs
Paul Mitchell
EMC Cellular
October 18, 2001
When international roaming was first introduced, it was hoped that it would bring a valuable service to subscribers whilst allowing operators to tap extra sources of income. However, it was not long before users realised that the service's high charges could not be justified and that operators were using the device as a means to maximise revenue.
The latest development in international roaming has been for GSM Europe, the European interest group of the worldwide GSM Association, to publish a Code of Conduct for information on international roaming retail prices. The documentation was published on 14 June 2001 and European operators are encouraged to sign up to the code voluntarily, the primary objective of which is 'to provide greater consistency and clarity to the range of information available to consumers on charges and available services'. Methods of disseminating this information highlighted by GSM Europe include the internet, SMS, fax on demand, email, WAP and printed guides.
The Code of Conduct details the information which should be provided, which is summarised below:
*Tariff per minute for a call to a fixed number within the visited country
* Tariff per minute for a call to a mobile number within the visited country
* Tariff per minute for a call to a fixed number in the home country
* Tariff per minute for receiving a call on the visited network
* Tariff of sending and receiving an SMS on the visited network
* Information on whether unanswered calls are charged for
* Information on which charging units apply and whether set up charges are applicable
* Numbers and website addresses of customer care and information services
* Network display name or code, technology of network (900/1800), country code and availability of data services
* All tariffs should state whether they are inclusive or exclusive of VAT
* Information on peak and off-peak times for all roaming partners
* That not all operators grant access to toll free numbers for visitors
* Information and additional charges for WAP, high speed data, prepaid roaming and VAS Information on inter-standard roaming.
Operators which have taken up the Code of Conduct were required to implement it by 1 October 2001. A list of those which have taken this step is given below:
Amena; Spain
Ben; The Netherlands
Blu; Italy
Bouygues Telecom; France
BT Cellnet; UK
Croatian Telecom, Croatia
Eircell; Ireland
EuroTel Bratislava; Slovak Republic
Hutchison 3G UK; UK
H3G; Italy
KPN Mobile; The Netherlands
KPN Orange Belgium; Belgium
Latvijas Mobilais Telefons; Latvia
Libertel-Vodafone; The Netherlands
Max.mobil; Austria
MobiFon; Romania
MobilNet; Germany
Mobilkom; Austria
Omnitel Pronto Italia, Italy
Optimus; Portugal
Orange France; France
Orange Switzerland; Switzerland
Orange UK; UK
Pannon, Hungary
PTK Centertel; Czech Republic
SFR; France
Sonofon; Denmark
Sunrise; Switzerland
Tele Danmark; Denmark
Telecel Vodafone; Portugal
Telefonica Moviles; Spain
Telfort; The Netherlands
Telia; Sweden
Vodafone Hungary; Hungary
Vodafone Malta; Malta
Vodafone UK; UK
Westel; Hungary
Source: GSM Europe
Note: Hutchison 3G UK and H3G have commited to be compliant on the first day of launch of commercial operations.
The Code of Conduct addresses the complexity of roaming tariffs. The fact that roaming prices depend upon three different factors, the home network, the visited network and the destination of the call, means that a huge range of end tariffs are possible. Roaming agreements exist between the majority of operators, and the charges levied vary according to the terms of the agreement. The Code of Conduct should help subscribers gain access to the information they need to understand the costs they will be paying.
However, whilst GSM Europe's Code of Conduct is aimed at making it easier for subcribers to understand the costs involved in roaming, it does nothing to encourage competition within the market. Despite the steps taken by the association and operators to make roaming charges easier to comprehend, it seems that the EU still faces a battle to bring costs down.
Investigations by the EU
Ever since the first complaints were made regarding the high cost of roaming, the EU has taken steps to investigate these charges. Surveys conducted by the International Telecommunications Users Group (INTUG) in 1999 and 2000 shone light on the fact that international roaming charges in Europe varied from two to ten times as much for the same or similar call. They also revealed that calls made to the same destination by roaming and non-roaming customers could vary by up to 500%. It is the consumers who have suffered.
These and other reports have been the catalyst for investigations conducted by the Competition Directorate-General of the European Commission (who launched an investigation on 27 July 1999) and national regulators. The suggestion is that the complexity of the charges and the backroom negotiations, among other matters, mean that international roaming is not conducted in a competitive environment.
The situation has been made worse by unclear information being provided to subscribers by operators. For example, while a GSM handset is able to detect all available networks in a foreign country, it will automatically select a partner network which can then be checked by the user. The majority of subscribers do not know how to change this network and are even less likely to know what each network will charge for voice and other services. Subscriber education has been so low that some do not realise that they must pay for incoming international calls they receive whilst abroad.
Subscribers are further hit by their lack of knowledge (and the lack of readily available information) regarding the tariff structures of the operator with whom they are roaming. It is completely feasible that the peak period on offer will differ between operators, or that subscribers may be caught out by an operator using billing per minute as opposed to a per second system.
Moves to Address These Issues
The GSM Association has worked towards standardisation and transparency with regard to international roaming. To this aim it has produced the Standard Terms for International Roaming Agreement (STIRA) and the Inter-Operator Tariff (IOT).
STIRA provides operators with a framework of tariffing principles, and aims to simplify the negotiation of roaming agreements. Whilst this provides economic and technical benefits to the operators, its retail-plus pricing model means that subscribers end up paying high charges. Neither the home operator nor the roaming partner are provided with any incentive to reduce costs.
IOT seeks to address the transmission of information between operators. Whilst this is laudable, it does not help the end user, who will still be confused by the complexity of tariffs on offer. Despite the best efforts of the GSM Association in publishing these two documents, roaming charges remained high and complaints were received by the Competition Directorate-General of the European Commission.
Investigations into the high costs of roaming began with questionnaires being sent to operators and national competition authorities. By June 2000 a European Parliament report on the 1999 Communications Review laid bare the irregularities in call charges (from fixed to mobile, mobile to fixed, mobile to mobile and roaming) and urged the Commission to consider possible ways to lower prices in order to increase competition.
Despite this preliminary report, roaming charges continued to remain high, with further comment from the EU coming in November 2000 when a spokesperson said that 'structural characteristics (of the roaming market) are highly unfavourable to the emergence of competition,' and 'favour tacit collusion and excessive prices.' Even by April 2001 the EU Competition Commission was bemoaning the fact that competition dynamics appeared to be having little effect on the market.
Operators Finally React
It has taken operators a long time to react to the criticism and disgruntlement displayed by government bodies and subscribers. It is only since the start of 2001 that simplified roaming tariffs have appeared on the market; but an ulterior motive to maximise revenue is still there, albeit in a different form. Whereas in the past operators have tried to gain as much revenue as possible from roaming, they are now taking steps to promote the service and encourage use among their own subscriber bases.
The simplified pan-European tariff plans that have appeared will aid subscribers' understanding of the costs and possibilities, but the charges offered remain high in comparison to other calls. The introduction of pan-European offerings serves to promote customer loyalty where roaming subscribers will remain on networks owned or controlled by the pan-European operator. Rather than opening up the international market to competition, operators are moving the goalposts and succeeding in retaining their lucrative revenue flows.
Whilst these schemes have been cleverly marketed, industry observers have not been fooled. In July 2001 the European Commission raided operator's offices in the UK and Germany in an attempt to discover if there was active collusion to maintain the high prices. Subscribers continue to pay high costs for international roaming; the issue is still to be resolved. <<
- Eric - |
