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Ofcom has for some time expressed concerns about the high prices paid by consumers who use their mobile phones whilst abroad. These concerns are shared by other regulators across Europe, and by the European Commission (EC). Further, a consumer survey undertaken by Ofcom in October and November 2005 suggests that awareness of international roaming charges is low in the UK.

Ofcom has, for some time, been working closely with other National Regulatory Authorities (NRAs) in Europe and with the EC to assess the best course of action to address the problem of expensive international roaming prices.

In January 2006 Ofcom published a consumer information guide (at: http://www.ofcom.org.uk/advice/mobile_abroad/) on how to reduce costs for consumers using their mobile phone abroad. This included the most commonly available tariffs for each of the UK mobile providers available at the time; guidence on how to reduce call costs whilst overseas; and links to various sources of further information.

The European Regulators Group (ERG), a body of EU telecoms regulators including Ofcom , published a Common Position paper seting out a framework to facilitate NRAs in considering the potential competition problems in individual wholesale roaming markets under the current regulatory framework. This document can be found at:
www.erg.eu.int/doc/publications/consult_wholesale_intl_roaming/erg_05_20_rev1_wir_common_position.pdf

Ofcom is responsible for the regulation of the international roaming market in the UK, which affects the prices paid by visitors coming to the UK from abroad, and has undertaken preliminary work in assessing the wholesale international roaming market in the UK.

EC Regulation

On 8 February 2006 the EC announced its intention to impose an EC Regulation in relation to international roaming charges, and asked for input in respect of this intention.

Ofcom played a leading role in the ERG’s response to this proposal on 22 March. In this response, the ERG agreed that an EC regulation in response to concerns over the current level of international roaming prices was warranted, and made a suggestion on the form that the regulation may take.

On 3 April the EC made a further announcement setting out the detail of its proposed Regulation, which would impose a cap first on the amount that one operator charges another for access to its network, and second on the amount billed to the consumer for the call.

On 11 May 2006, the ERG made a second response, this time to the EC’s more detailed proposals. The ERG reiterated its view that an EC regulation to reduce the current level of international roaming charges was necessary, and its support to the EC’s objective for a substantial reduction in average retail roaming prices.

However, the ERG including Ofcom has significant reservations about the regulatory mechanisms proposed by the EC. In the first instance the ERG favours wholesale regulation, with regulation on retail prices implemented only if, after a suitable period, wholesale price reductions have not been passed through to consumers. In its response the ERG suggests a period of six months should be suitable for mobile operators to pass on such savings in the form of reduced retail prices.

Retail regulation often has unexpected consequences – for example, operators might choose to increase domestic tariffs or reduce handset subsidies to compensate. It is also inconsistent with the general approach to regulation taken within the EU.

Ofcom market assessment

In light of the EC’s proposal for an EC regulation, which Ofcom supports, Ofcom has decided to postpone its assessment of the wholesale international roaming market in the UK at this time.

Ofcom will continue to work within the ERG to assist the EC as it takes its proposals forward.

Related Items

EC proposals - at: http://ec.europa.eu/information_society/index_en.htm

ERG response – at: http://erg.eu.int/index_en.htm

ERG news release – at: http://erg.eu.int/index_en.htm

Ofcom consumer guide – at: http://www.ofcom.org.uk/advice/mobile_abroad/

Ofcom FQ on international roaming – at: http://www.ofcom.org.uk/media/mofaq/telecoms/roaming/

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