EUROPEAN COMMISSION 
Brussels, 6.7.2011 
SEC(2011) 870 final 
  
COMMISSION STAFF WORKING PAPER 
IMPACT ASSESSMENT OF POLICY OPTIONS IN RELATION TO THE 
COMMISSION'S REVIEW OF THE FUNCTIONING OF REGULATION (EC) No 
544/2009 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL OF 18 
JUNE 2009 ON ROAMING ON PUBL IC MOBILE TELEPHONE NETWORKS 
WITHIN THE COMMUNITY 
{COM(2011) 407 final} 
{SEC(2011) 871 final}  
 
EN 2   EN TABLE OF CONTENTS 
IMPACT ASSESSMENT .......................................................................................................... 5 
1. Procedural issues and consulta tion of interested parties.............................................. 5 
1.1. Background ................................................................................................................ .. 5 
1.2. Implementation of the Roaming Regulation................................................................ 5 1.3. BEREC Analysis and Be nchmark Data Reports.......................................................... 5 
1.4. Public consultation....................................................................................................... 6 
1.5. Meetings with interested parties................................................................................... 7 1.6. Commission studies ..................................................................................................... 7 1.7. Development of an economic model............................................................................ 7 1.8. Commission Services  Inter-service Group................................................................... 7 
1.9. Impact Assessment Board............................................................................................ 7 2. PROBLEM DEFINITION ........................................................................................... 7 2.1. Definition of roaming services..................................................................................... 8 2.2. Market Size and segments............................................................................................ 9 2.3. Evolution in wholesale a nd retail roaming charges ................................................... 10 
2.4. Comparison of roaming prices with pri ce ceilings in the Roaming Regulation ........ 11 
2.5. Comparison of roaming pri ces with underlying costs................................................ 12 
2.6. Comparison of roaming prices  with domestic prices................................................. 13 
2.7. What are the underlying causes of the problem? ....................................................... 13 2.8. Who is affected by the problem (specific actors, sectors …)?................................... 17 2.9. Why is public intervention necessary, why at the European level?........................... 17 2.10. Conclusion on the roaming market and its development........................................... 20 3. Definition of the policy objectives............................................................................. 22 3.1. General objectives...................................................................................................... 22  
3.2. Specific objectives ..................................................................................................... 23  
3.3. Operational objectives................................................................................................ 24 4. ALTERNATIVE POLICY OPTIONS....................................................................... 26 4.1. Option 1: No regulation ............................................................................................. 27 4.2. Option 2: Maintaining the current approach .............................................................. 27 
 
EN 3   EN 4.3. Option 3a: Decoupling of roaming services............................................................... 33 
4.4. Option 3b: Additional wholesale Access Measures................................................... 34 4.5. Option 3c – Safeguard price caps acco mpanying the decoupling and wholesale 
access measures.......................................................................................................... 36 
4.6. Option 3d: Spot market .............................................................................................. 38 5. Assessment of the policy options............................................................................... 39 5.1. Qualitative assessment ............................................................................................... 39 5.2. Identification of the relevant impacts......................................................................... 39 5.3. Qualitative assessment of Option 1: No Regulation .................................................. 41 5.4. Qualitative assessment of Option 2a: Conti nuation à l’identique – current price caps
............................................................................................................................... ..... 41 
5.5. Qualitative assessment of Option 2b: Ex tension of the current methodology with 
adjusted annual price caps incl retail data.................................................................. 42 
5.6. Qualitative assessment of Option 2c: Roam like at Home......................................... 43 5.7. Qualitative assessment of Option 3a: Unbundling option.......................................... 43 5.8. Qualitative assessment of option 3b: Improved wholesale access measures............. 44 
5.9. Qualitative assessment of Option 3c: Dec oupling plus MVNO access plus safeguard 
price caps.................................................................................................................... 4 6 
5.10. Qualitative assessment of Option 3d: Spotmarket ..................................................... 46 5.11. Quantitative assessment ............................................................................................. 49 5.12. Assessment of the economic impact (Social welfare impact).................................... 49 5.13. Estimation of the economic impact under each option in the EU 27......................... 49 5.14. Estimation of the economic impact under shortlisted options ................................... 51 5.15. Assessment of the costs of implementi ng the roaming regulation options (incl. 
feasibility) .................................................................................................................. 5 2 
5.16. Overall cost-benefit assessment of the selected policy options ................................. 54 
6. Conclusion.................................................................................................................. 56 
7. Evaluation and monitoring......................................................................................... 57 ANNEX I........................................................................................................................ .......... 58 
1. Technological developments related to roaming ....................................................... 58 1.1. Alternatives to roaming services................................................................................ 58 1.2. Possible substitution between services within the roaming market........................... 65 1.3. Innovations affecting the roaming market ................................................................. 66 
 
EN 4   EN 2. Barriers to Competition.............................................................................................. 67 
3. Overview of how the different  stakeholders are affected .......................................... 70 
4. Table of impacts......................................................................................................... 77 Annex II Qualitative Assessment............................................................................................. 79 ANNEX III...................................................................................................................... ......... 84 
Annex IV – Economic Model .................................................................................................. 95 Annex V ........................................................................................................................ ......... 101 
Theory framework for the determination of unr egulated retail and wholesale roaming prices
............................................................................................................................... ... 101 
Annex VI ....................................................................................................................... ......... 108 
Breakdown of Roaming services............................................................................................ 108 
 
EN 5   EN IMPACT  ASSESSMENT 
1. PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES  
1.1.  Background 
In June 2007, a first Regulation on roaming on pub lic mobile telephone networks within the 
Community (the Roaming Regulation) was adopted  to contribute to the smooth functioning of 
the internal market while achieving a high leve l of consumer protection, fostering competition 
and transparency in the market . In July 2009, revised regulation1 was adopted and this is valid 
until 30 June 2012. In the meantime the Commission' s task was to monitor and report to the 
European Parliament and Council on the f unctioning of the Regulation. The Commission 
must review the functioning of the Regul ation by 30 June 2011 at the latest.  
This impact assessment (IA) report examines options arising from the Commission's review 
of the functioning of the Roaming Regulation2 pursuant to Article 11 thereof. In particular it 
examines whether it is necessary to extend regulatory intervention beyond its current expiry date of 30 June 2012 and the options for such  intervention. In each case it examines the 
impact of these options on consumers and the industry. 
1.2. Implementation of the Roaming Regulation  
The Commission has been monitoring developments  in the roaming market carefully and in 
its Interim Report
3 on the functioning of the Regulati on, published June  2010, noted that 
competition was not strong enough. In that report that Commissi on found that, overall, 
implementation of the amending Roaming Regul ation has gone smoothly and operators have 
complied with the new provisions. Consumers are benefiting from reductions  in the prices for 
voice and SMS roaming services and from incr eased transparency. The prices for data 
roaming have also fallen but consumers are not yet enjoying fully the reductions seen at 
wholesale level.  
1.3. BEREC Analysis and Benchmark Data Reports 
The Commission services have continued to work closely with the Body of European 
regulators for Electronic Communications (B EREC) which has provided highly valuable 
input to the Commission's ongoing monitoring of the Roaming Regul ation as well as to this 
review of the Regulation. This report draws h eavily on the work carried out by BEREC and in 
particular on: 
The six collections of operator roaming data ca rried out by NRAs including trends in roaming 
prices and volumes for all roaming services at w holesale and retail levels as far back as the 2nd 
quarter of 2007 and up to and including the first half of 2010. Furthermore, BEREC has 
                                                 
1 Regulation (EC) No 544/2009, OJ L 167, 29.6.2009, p.12 
2 (EC) No 717/2007 of the European Parliament and of the Council of 27 June 2007 on roaming on 
public mobile telephone networks within the Co mmunity and amending Directive 2002/21/EC, OJ L 
171 of 29 June 2007 p 32-40 
3 See COM(2010)356 final (29/06/2010) 
 
EN 6   EN published a number of other reports which c ontribute to specific requirements of the 
Commission's review of the Regulation4.  
Article 11 of the Roaming Regulation specifically  requires that in its assessment of methods 
other than price regulation which could be used to create a competitive internal market for roaming, the Commission has regard to an anal ysis carried out by BEREC. To meet this 
obligation, in December 2010
5 BEREC published a full analysis the effects of the Roaming 
Regulation as well as its views as to possible future regulatory approaches. 
1.4. Public consultation  
The European Commission launched a wide-ra nging public consultation on 8 December 2010 
seeking comments on the review of the Roam ing Regulation. The response rate was high – 
around 90 contributions were received in total.  
Most responses argued for the need for further regulatory intervention beyond 2012. 
Responses from industry players were mixed – most acknowledged the inevitability of further 
regulation while a few argued that competition ha s developed to a level that does not warrant 
future regulatory intervention. Most responde nts acknowledged that the current Regulation 
had succeeded in bringing benefits for consumers. On the other hand, very few believed that competition was stronger because of the Regulatio n. Industry in particular  was sceptical of the 
current model's ability to foster competition. 
The Commission had put forward a number of op tions for future approaches to regulation. 
Among these were options which would link roam ing prices directly to domestic prices. 
These alternative options of retail price regulation (Roam-Like-a t-Home/RLAH or Roam-
Like-a-Local/RLAL) were assessed by stakeholde rs but views were quite divergent. RLAL 
was the least popular option amongst operators as it would make the task of ensuring adequate 
transparency of tariffs complicated. Only a few positive replies came regarding the RLAH 
option, mostly stating that this is a better op tion than RLAL. The con tinuation of the existing 
price cap model was favoured by most stakeholder groups. 
The Commission had also suggested  a number of possible structur al solutions to the roaming 
problem. Some network operators and nationa l authorities expresse d doubts on structural 
solutions, which were considered to be costl y, time consuming and (especially the decoupling 
option) challenging to implement. In this regard, it was also unde rlined that, if not limited to 
roaming specific services, such structural solu tions could even distort the national mobile 
markets which are considered to be competitive The effectiveness and general workability of 
the 'spot market' was also questioned, though su pported by a few small operators. An access 
obligation for MVNOs was perceived more ne utrally and some responses (from smaller 
operators) highlighted its potential to promote competition. 
Most operators were strongly opposed to retail  data roaming regula tion while consumers, 
Member States and others support this approach . If such regulation is to be proposed, MNOs 
suggested a retail cap which w ould allow flexibility in this new and emerging market. Other 
stakeholders (Member States, consumer representatives and some MVNOs) however argued 
                                                
 
4 http://www.erg.eu.int/documents/berec_docs/index_en.htm#board 
5 http://www.erg.eu.int/doc/berec/bor_10_58.pdf 
 
EN 7   EN that the spread between the re tail price and the wholesale cap  is too big and shows that 
competition has not kicked-in. It was widely acknowledged that current technology does not 
provide for a viable roaming substitute.  
1.5. Meetings with interested parties 
The Commission services have held numerous meetings with mobile operators over the 
course of the review of  the Roaming Regulation. 
1.6. Commission studies  
A Study entitled “Study on the Options for a ddressing Competition Problems in the EU 
Roaming Market” was completed for the Commission by WIK Management Consultants. Support for this impact assessment provided by Van Dijk Management Consultants.  
1.7. Development of an economic model 
In addition to the general data gathering exer cise undertaken by BEREC referred to above, all 
NRAs have provided directly to the Commission the operator-specific data which was 
gathered by them as part of that general m onitoring exercise. This comprehensive data has 
enabled the Commission Services to construc t an economic model which provides estimates 
of the impact of the current Regulation as well  as the economic impact of the policy options 
set out in this report. This model is  explained in detail in Annex V.  
1.8. Commission Services Inter-service Group 
In order to support the preparation and drafting of this impact assessment, a Commission 
Services inter-service group was establishe d. The following Commission Services were 
invited to participate: Secretariat General, Lega l Service, Enterprise a nd Industry, Health and 
Consumer Protection, Internal Market and Services, Competition, Economic and Financial Affairs and Trade. There were  two meetings of this group. 
1.9. Impact Assessment Board 
On 8 April 2011 the Impact Assessment Board (IAB) in its final opinion recommended the 
several improvements that are all included in this final impact assessment report. Following 
the IAB examination and suggestions, the following improvements were made to the report: (a) the final impact assessment report now provides a more developed analysis of the EU market for mobile roaming services; (b) the report analyses and quantifies to the extent possible the costs that telecom operators and serv ice providers will have to bear to implement 
the structural elements of the preferred option; (c) the report provides the improved 
comparison of options by clarifying the scori ng method used and explaining its conclusions; 
(d) the report presents a more detailed summary the different positions of the stakeholders; (e) 
the quantitative analysis is further improved. 
2. PROBLEM
 DEFINITION   
Roaming charges are still an important impedi ment to the single market and create an 
important cost factor for busin esses and citizens in Europe. Ma ny Europeans avoid, or curtail, 
usage of their mobile phones when travelling outs ide of their home Member State in order to 
 
EN 8   EN avoid incurring mobile roaming charges6. Every day European businesses and citizens are faced 
with the reality that this bottleneck to cross-border activity remains. T he weak linkage between 
cost and price for roaming services indicates the lack of competition.  
The overall problem  that is dealt with in this impact assessment study is that: 
“Roaming charges that are a result  of market forces alone are excessive compared to costs”  
More precisely, the central question  to address is if the objectives of the current Regulation 
have been achieved by the present provision s, and if and how th e Regulation should be 
adapted after 30 June 2012. Derive d from this, the ove rall aim for this impact assessment can 
be summarised as follows:  
“If regulation is justif ied, what approach should be applied for regulating roaming services 
after 30 June 2012”? 
2.1. Definition of roaming services  
International Roaming7 is a service that allows a custom er of a Mobile (Virtual) Network 
Operator (M(V)NO)8 in one country, to obtain services (v oice, SMS or data) from an MNO in 
another country. The service provi der ensures that consumers remain connected to a mobile 
network abroad while using the same mobile handset (or possibly laptop in case of data 
roaming) and the same telephone number. A dist inction can be made between wholesale and 
retail roaming services. 
Wholesale roaming services 
The term “wholesale roaming services” refers to  the provision of roaming services between 
service providers lo cated in different countries. More prec isely, service providers that want to 
offer roaming services to their customers have to buy them from MNOs located in the visited 
countries. To this end, commercial agreements  between service providers have to be 
concluded. 
The wholesale roaming market is actua lly divided in two different parts: 
– The wholesale inbound roaming  market  is the market where MNOs can sell and buy 
roaming services to each other by negotiating commercial agreements. As membership to GSMA is in practice requi red for service providers to conclude 
agreements with foreign MNOs, this market solely includes MNOs.  
The wholesale resale roaming  market
 is the market where other service providers 
(MVNOs and resellers) can buy roaming services previously negotiated by their MNOs. Indeed, MVNOs are generally not able to access the wholesale inbound 
market for negotiating themselves bilate rally with all foreign MNOs. Generally, 
                                                
 
6 2010 Eurobarometer report on Roaming: 
http://ec.europa.eu/information_society/activities/roaming/docs/survey2011_en.pdf 
7 International roaming is most often referred to as simply ‘Roaming’. Unless otherwise indicated, 
‘roaming’ will always refer to ‘international roaming’ in the remainder of this text. 
8 It is assumed than MNOs as well as (full) MVNO s can conclude an inter-operator wholesale contract 
for international roaming services. 
 
EN 9   EN MVNOs and resellers negotiate agreements  for buying roaming services via their 
domestic MNO but this is not especially required. 
Retail roaming services 
The retail roaming services are the roaming se rvices sold by all dom estic providers (MNOs, 
MVNOs and resellers) to end-users.  On this market, service provi ders resell to their domestic 
customers roaming services which they have bought  (directly or via a domestic MNO) from a 
foreign MNO. 
2.2. Market Size and segments9 
The EU market for mobile roaming services can be divided into voice services, SMS and 
broadband data services. In 2009, the retail  EU roaming market10 accounted for 4,777 billion 
EUR in revenues. This can be divided as fo llows between the differe nt services: 71% for 
voice (nearly three quarters of which is relative to  calls made, the rest to  calls received), 17% 
for data and around 11% for SMS. For wholesale  revenues, figures only differ slightly, with 
respectively 69%, 15% and 16% of wholesal e non-group roaming revenues coming from 
voice, SMS and data services. The total w holesale market size in 2009 amounted to 1,253 
billion EUR. 
With a total EU mobile market  size of about 164 billion EUR11, EU (retail and wholesale) 
roaming revenues appear to represent around 3,68%12 of the total EU mobile market. Between 
2007 and 2009, revenues for voice roaming fell quite  significantly as a result of both lower 
prices as well as lower volumes of traffic (-3,2%). For SMS roaming, the impact of the Regulation can already be clearl y seen as total revenues in 2009 compared to 2008 decreased 
significantly despite a big increa se in volume (+23,1%). Finally, for data services, the increase 
in volume of 43,6% between 2008 and 2009 co mbined with the imposed decrease in 
wholesale prices led to an overall decrease in revenues. At the retail level however – where no 
price ceilings were imposed for data roaming, th e total revenues in 2009 remained at the same 
level as in 2008. 
The structure of the EU roaming market has not substantially change d since the introduction 
of roaming regulation in 2007 in  terms of actors in the market. There are around 100 mobile 
network licences granted in 27 Memb er States. Half of these opera tors are subsidiaries of or 
have co-operation agreements with the four main  market players. Almost 80% of EU citizens 
subscribe to one of the four main mobile groups
 (460million subscribers). While mobile 
operators' strategies (e.g. in terms of negotiati ons with suppliers or investment decisions) are 
European, mobile services are produced and marketed at the national level . For example, 
when purchasing retail roaming services as part of the mobile service bu ndle, the end-user has 
a choice between 2 or 6 network operators de pending on the Member State. In addition to 
                                                 
9 All figures in this section are derived from a detaile d data-collection exercise undertaken by the national 
regulatory authorities and the European Commission. Data were collected from 27 NRAs on an 
individual per-operator basis, and were then aggregated by means a bottom-up approach. See the annex 
for a detailed explanation.  
10 I.e. excluding revenues from rest of world traffic 
11 See 15th Progress Report on the Single Eu ropean Electronic Communications Market (15th 
Implementation Report), figure is for 2008. 
12 The BEREC report “International Mobile Roaming Regulation” of December 2010 indicates a market 
size for roaming services of 4,2% on average for the EU in 2009. 
 
EN 10   EN existing mobile network operators , retail roaming services are provided also by mobile virtual 
network operators, MVNOs. MVNOs market sh are varies from one Member States to 
another. In March 2010 their cumulated market  share reached 20% in Germany and Denmark, 
between 10-19% in the UK, the Netherlands a nd Finland. In the remaining countries the 
market share is below 10%.  
Technological developments related to roam ing, including possible substitution between 
services within the roaming market as well as detailed description of barriers to competition on the European roaming markets are pres ented in more details in Annex I.  
2.3. Evolution in wholesale and retail roaming charges 
When considering the problem that “R oaming charges that are a result of market forces alone 
are excessive compared to costs ”, the evolution of tari ffs is a useful starting point for a more 
thorough analysis. Roaming charges at the wholesale and retail le vel for the different services 
offered have steadily decreased over time. Th is is shown by the following graphs with EU 
averages for the different services considered:  
 
Figure : Evolution of wholesale and retail pr ices for voice roaming (per min), 2007-2010 
(SOURCE: BEREC database on roaming data collection) 
 
 
EN 11   EN Figure 1: Evolution of wholesale and reta il prices for SMS roaming (per SMS), 2007-
2010 (SOURCE: BEREC database on roaming data collection)  
 
Figure 2: Evolution of wholes ale and retail prices for data  roaming (per MB), 2007-2010 
(SOURCE: BEREC database on roaming data collection)13  
From the above, it thus appears at first sight th at wholesale and retail  prices have steadily 
declined, and that declines in wholesale and retail prices have occurred simultaneously and in 
a rather coordinated way. As will be discussed in  the next paragraph, this however is largely 
due to the regulations at bot h wholesale and retail level that are in place since 2007.  
Moreover, upon closer inspection it becomes clear that although the absolute margin between 
wholesale and retail prices has remained constant or has slightly declined, in relative terms the difference between wholesale and retail prices  has even increased in recent years, thus 
enlarging the relative operator margin (e.g. for voice, the difference between wholesale and 
retail prices has risen from 49% in Q2 2007 to  81% in Q2 2010). Finally, for retail data 
services, the only service currently not subject to  price regulation, declines  in wholesale prices 
do not appear to have been st ructurally passed through to the retail level: between Q2 2009 
and Q2 2010 (so in the first year of applicat ion of wholesale data roaming price caps), 
wholesale prices have decreased by about 70% , whereas retail prices decreased more 
marginally with about 15%. This evolution is in stark contrast with previous conclusions
14 
that “ the analysis of the evolution in wholes ale and retail prices between 2007 and 2008 
suggested that there is  a higher likelihood of pa ss-through of wholesale price reductions to 
end-users [for data] than is the ca se for voice or SMS roaming services ”. 
2.4. Comparison of roaming prices with pr ice ceilings in the Roaming Regulation 
In a price-regulated environment,  more important than the absolu te evolution of the prices is 
how these compare to the price caps that were defined in the Roaming Regulation. The most 
                                                 
13 Since Q1 2010, the BEREC database makes a distinction between retail tariffs applicable to prepaid 
versus post-paid customers. Therefore, a weighted tariff has been determined, based on respective 
volumes of roaming data services used by prepaid and post-paid customers. More precisely, on average for Q1 and Q2 2010; 13% of roaming data volumes was transmitted by prepaid user and 87% by post-
paid subscribers. 
14 See SEC(2008) 2489 – page 25. 
 
EN 12   EN recent benchmark data that exis ts on the roaming tariffs appl ied in the different Member 
States stems from the BEREC international roam ing benchmark data collection for the period 
January – June 2010. Since the current price ca ps for retail and wholesale voice and SMS 
roaming services and for wholesale data roam ing services only came into force on 1 July 
2010, the following graphs set out the most recent BEREC results for average EU tariffs applied against the price caps applicable in the pr evious step of the glide path, i.e. from July 
2009 to June 2010. 
As the above graph shows, average EU tariffs in general are very close to the price caps 
defined by the 2009 Regulation. Differences for regulated wholesale tariffs range from 
respectively 63,60
15% and 18,85% lower for data and voice service to tariff at the same level 
as the price caps for SMS roaming. 
2.5. Comparison of roaming prices with underlying costs 
For voice roaming , an estimation of the underlying cost s per min was made at the Member 
State level, with very conservative estimat ions based on two times the current mobile 
terminating rate (MTR), 2cEUR for the inte rnational transit and 2cEUR for the roaming 
specific costs16. It can be concluded that current re tail roaming prices are on average 118% 
higher than the outcome of our estimated underl ying costs. The differences vary from +20% 
for Ireland (which could be par tly explained by the second most  high MTR in the EU 27) and 
+515% for Cyprus (which in turn has by far the lowest MTR) 
Another more recent approach developed by BEREC17 makes a further distinction between 
technical costs, sales and marketing costs a nd common costs. While remaining conservative 
(e.g. for the terminating part of the routing, it is  still assumed that all calls are terminated at 
more expensive mobile networks), the methodol ogy for estimating underlying costs also takes 
a more forward looking approach by estima ting costs for the period 2012-2015 (e.g. taking 
into account the expected further decrease of term inating rates to the LRIC level, at least for 
the terminating leg18). The results of the new methodology suggest an average wholesale costs 
of 5,42 cEUR/min and between 5,69-8,13 cEUR /min when including retails costs. 
Similarly for data and SMS  the underlying costs are extremely low compared to the current 
caps.19 A similar approach as developed for voi ce roaming services has led to following 
results: the average wholesale costs per SMS is 0.81 cEUR ( between 1,41 and 2,01 cEUR 
when retail costs are included)  whilst wholesale costs for da ta per MR are estimated at 8,08 
cEUR (between 8,49-12,12 cEUR wh en including retail costs). 
                                                 
15 This is compared to the cap of 1 EUR/MB on 1 Ju ly 2010; this will however further go down to 0,5 
EU/MB on 1 July 2011. 
16 This is consistent with the approach taken in the Impact Assessment for the amended Regulation – SEC 
(2008) 2489.  
17 See “International Mobile Roaming Regulation” – BEREC Report – December 2010 
18 For the originating leg, a Fully Distributed Costing (FDC) approach is used in order to also cover the 
cost of coverage (i.e. ‘the access cost’). 
19 A comparison at the country level, based on publicly available data, was not possible for SMS and data 
services. 
 
EN 13   EN 2.6. Comparison of roaming prices with domestic prices  
It can be concluded that roaming prices for voice services are on average 200% higher than 
the domestic Average Revenue Per Minute (APPM). For SMS, no readily available 
information on average retail prices per SMS at the Member State level could be found.  
These elements clearly confirm a previous statement by the ERG20 (i.e. before the 
introduction of Regulation 544/2009) that th e difference between domestic and roaming 
prices appears to be no better for SMS than for voice and that those differences are unlikely to be justified on the basis of roaming-specific costs. The introduction of the price ceiling 
already largely reduced the roaming cost for SMS, but these remain very much above the 
underlying costs. 
Finally, for data services, a first comparison was made based on data collected on mobile 
broadband offers and internal research by Van Dijk Management Consultants related to Q1 
2009
21. It was observed that many domestic offers  already contain a number of Gigabyte (GB) 
(most often 1, 3, 5 or 10GB) in the monthly subscription fee. Addi tional volume can be 
bought at an additional cost per GB. After th e elimination of some extreme values, and 
assuming a total monthly consumption of re spectively 1, 5 and 10GB, an EU average 
domestic price for mobile data could be deri ved. Depending thus on the total consumption, an 
average cost of 12; 15,6 and 17,5cEUR per MB22 was obtained.  
The BEREC report on Internati onal Mobile Roaming Regulati on also provides benchmarking 
information on domestic mobile data servic es. The results obtained indicate a European 
domestic average of 4,8cEUR per MB. 
Based on these elements, it can be concluded that  the gap between the prices for domestic and 
(non-regulated) retail data roaming services23 ) remains enormous ( > 95%) and is thus very 
far from reaching the DAE Key performance ta rget of differences between roaming and 
domestic tariff approaching zero by 2015. 
2.7. What are the underlying causes of the problem? 
The impact of the 2007 and 2009 roaming re gulation on competition has been limited. The 
BEREC data suggests that there have been no major developments which change this position 
i.e. prices are still clustered close to the ma ximum level of the caps, except in the case of 
wholesale data. The structural issues which we re identified as causing mobile retail and 
wholesale roaming markets to be not effectivel y competitive are still evident. These include 
lack of (or substantial imperfections in) reta il roaming substitutes and relatively inelastic 
demand for roaming services for a significant part  of the customer base: only few subscribers 
                                                 
20 Submission to Public Consultation for the Impact Assessment SEC(2008) 2489 
21 Collection of data made during the same data collection period as for the DG INFSO Broadband 
Internet Access Cost (BIA C) Study in April 2009. 
22 The higher cost per MB in case of a consumption of 10GB compared to a lo wer consumption is caused 
by the higher cost for additional GB that are added to the cost of those tariff plans that do not include 10 GB in the fixed subscription fee. 
23 The overall average for on -net and off- net at Q2 2010 was 1, 30 EUR/MB, whereas the overall average 
for off-net traffic was 2,604 EUR/MB 
 
EN 14   EN chose their operator based on the roaming charge s offered. In the wholesale roaming market, 
the majority of deals are reci procal, so that purchasers buy a nd sell wholesale roaming from 
the same counterparty while negoti ating agreements for residual tr affic with most (if not all) 
other operators to ensure good network coverage for their roaming customers. For relatively 
small volumes of residual traffic, there is no t much incentive to compete vigorously on price, 
especially for larger operators.  
To illustrate the reasons for these problems in more detail, the following section will focus on 
the specificities of the roaming market and th e market failures that are at its heart. A 
distinction will naturally be made be tween the wholesale and retail market. 
Wholesale market  
Since the widespread use and efficiency of traffic steeri ng, the wholesale roaming price 
offered to an operator is principally driven by the amount of traffic that th is operator is able to 
offer to send back to the count ry with which it is negotiating24. Bilateral negotiations between 
operators are greatly affected by the amount of traffic that the ot her operator will in return 
steer onto the other operator’s  network, this way increasi ng the operator’s revenues. 
Therefore, negotiations principall y evolve around agreei ng to ‘balance traffic’, and then to 
apply a marginal rate (wholesale roaming price) to the remainder of the traffic25. It was 
confirmed by market players that the volume of traffic an operator  has to offer in return, at 
least plays a role in the price it ca n obtain for its roaming customers26.  
Another argument recently ra ised, more specifically in the “Study on the Options for 
addressing Competition Problems in the EU  Roaming Market”, commissioned by the 
Commission as a preparatory study for the pres ent Impact Assessment, is that the data 
available on applicable roaming tariffs shows a somewhat twisted view of reality. It is argued 
that bilateral negotiations between operators solely focus on the rate to be applied to 
unmatched minutes (thus in excess of the balan ced traffic), whereas the matched minutes are 
simply exchanged at the wholesale cap. Whereas  the negotiated price for unbalanced traffic 
can thus in some instances be as much as 40% less than the regulated cap, this is not as such 
shown in the statistics, since the relatively sm all amount of unbalanced minutes is mixed in 
with the high volume of balanced traffic. Wh ereas this theory presents good news for the 
wholesale market in itself, i.e. this would m ean that there is more price competition in the 
wholesale market than has been assumed until now based on the available data, it could also be concluded that in this case the difference be tween the retail prices actually paid and the 
retail prices that should  be applicable based on the underlying costs, is even greater than had 
been presumed, thus suggesting that the problem on the retail roaming mark et is even greater.  
Another problem in the wholesale inbound market often raised by full MVNOs is the fact they 
are in practice excluded from this market. Lo oking closer, the underlying problem relates to 
                                                
 
24 EUI Working Paper RSCAS 2010/62 - Robert Schuman Centre for Advanced Studies – Florence 
School of Regulation – A Structural Solution to Roaming in Europe, by Tony Shortall 
25 For the sake of clarity it should be mentioned that the wholesale cap as regulated by the Roaming 
Regulation applies to all traffic and sets thus the upper boundary both for balanced and unbalanced traffic. 
26 See “Study on the Options for addressing Compet ition Problems in the EU Roaming Market”, by WIK 
Consult for DG INFSO 
 
EN 15   EN the fact that bilateral negotiations for roaming services are most often based on STIRA 
agreements (i.e. standard documents regula rly amended giving a general framework to 
conclude agreements with foreign MNOs), which can currently only be used by GSMA 
members. MVNOs, however, cannot have th e required GSMA membership. Although in 
theory, other types of contra cts could be concluded, sin ce STIRA agreements are not 
obligatory, in practice these introduce a higher de gree of uncertainty resulting thus in much 
higher transaction costs27. Furthermore, it appears th at MVNOs coul d obtain GSMA 
membership by paying high fees and after fulfilling some technical requirements28. 
Theoretically again, full MVNOs could thus be able to negotiate roaming agreements with 
foreign MNOs. However, in practice, since te chnical conditions for GSMA membership are 
difficult to fulfill and since agreements out of  the STIRA framework ar e more costly, MVNOs 
are excluded from the wholesale inbound market. To improve this situation, the GSMA has 
however mentioned that they  are currently preparing to  allow MVNOs use standard 
commercial documents such as STIRA. 
The exclusion of MVNOs from the wholesale inbound market as explained in the previous 
section has several consequences on the wholesal e resale market. The most  obvious is the fact 
that, as MVNOs cannot directly  negotiate with foreign MNO’s, they must buy roaming 
services from a domestic MNO, most of the time their host MNO. As no price cap has been 
imposed on the wholesale resale market, a nd since domestic MNOs are at the same time 
suppliers for the MVNOs (on the wholesale mark et) as well as competitors for the MVNOs 
(on the retail market), MVNOs often encounter  margin squeeze problems. Such a strategy 
seems easy to understand since domestic MNOs - by imposing prices for the MVNOs that are 
close to the retail price cap - are maximizing their own revenue from resale of roaming 
services and reducing at the same time the margin that MVNOs can make by reselling 
roaming services to end users on the retail market. 
The wholesale roaming market presents many ch aracteristics of a na tural oligopoly market, 
which is practically a synonym to low competitive  pressures. This is aggravated by the fact 
that there exist few alternatives at the whol esale level for operators wanting to provide a 
service to their clients when abroad. Substitute s that have developed rather recently are 
internalization and localization. Internalization is the process whereby operators form roaming 
alliances, roaming partner agreements, roaming hubs etc. to minimize th e costs of roaming. 
This phenomenon has of course only become e ffective since the more widespread use of 
traffic steering. Localization refers to the em ergence of global MVNOs, which have access to 
networks in different countries  on local terms a nd conditions based on domestic wholesale 
agreements or MVNO regulations. On the retail level, they provide local numbers to their 
subscribers for each of the different countries within their area of presence. Whereas these 
developments might create some competitive pressure on wholesale roaming prices, they are not expected to become full roaming substitutes. Localization for instance has the disadvantage that consumers need to have more than one mobile number, which is considered 
to be rather inconvenient.  Internalization from its end is not aimed at by all operators, i.e. it is 
typically less interesting to operators with  a positive roaming traffic balance (those who 
receive more roaming minutes than their domestic clients cause abroad). 
                                                
 
27 See. BEREC Report – International Mobile Roaming Regulation – December 2010, P.48 
28 See. BEREC Report – International Mobile Roaming Regulation – December 2010, P.71 
 
EN 16   EN The In its Interim Report, which was publis hed on 29 June 2010, the Commission noted that 
while consumers are benefiting from lower ro aming charges, and that broadly speaking 
compliance has been good, competition in this market is not yet strong enough. The latest BEREC data, covering the first two quarters of  2010, suggests that there have been no major 
developments which change this position i.e. prices are still clustered close to the maximum level of the caps, except (possibly) in the case of  wholesale data. Retail data prices (which are 
not regulated) are also falling, but remain significantly higher  than the average wholesale 
rates in most countries. The average wholesal e price also fell more in both relative and 
absolute terms than the average retail price resulting in higher margins for operators and 
suggesting a lack of competition. 
Retail market
 
Like in the wholesale market, the Roaming re gulation has not brought about competition in 
the retail roaming market. In its Interim Repor t, the Commission noted that while consumers 
are benefiting from lower roaming charges, co mpetition in this market is not yet strong 
enough. 
As discussed above, there are little or no substitutes  to roaming at the retail level. This lack of 
pressure from substitutes is a first reason as to why the market appears not to be functioning 
well. Another cause of concern in the roami ng retail market is the limited demand elasticity 
among mobile users. This demand elasticity can take two forms, the first one being the price 
responsiveness at the time  of selection of an operator/ a subscription, the second one being the 
price responsiveness at the time of roaming, i.e. when the customer is abroad and is 
contemplating using the roaming service.  
When selecting a specific tariff plan for a s ubscription with a specific operator, the roaming 
prices attached to this offer have little influence on the deci sion of the consumer. This is 
because it is only one component of a complete  mobile services bundle, which moreover often 
represents only a minor fraction of a consum er’s total spend on mob ile communications. The 
low elasticity is thus linked to  a lack of inte rest from the consumer who has to buy a bundle of 
services (where roaming represents only one of the different services concerned). This could 
change if roaming could be purchased as a st and alone service. There is also a lack of 
transparency, since comparison of the roami ng tariffs of different operators is a time-
consuming task, especially since tariffs can di ffer from one country to the other and because 
roaming tariffs are just one of the items incl uded in a long price lis t of bundled services. 
Again, this could change if roaming was offere d as a stand alone service, easily allowing for 
comparison between alternative roaming offers. 
Recent data suggests that usage elasticity, i.e. elasticity linked to use of the roaming service 
when abroad, is also rather low. The prep aratory study for the present Impact Assessment 
estimated the elasticity  for voice and SMS to be in the range of -0,2 tot -0,3, whereas the 
elasticity for data roaming possi bly would be higher, but is di fficult to assess since usage 
might also be growing because of an increase in the use of smart phones.  
A full description of the barriers to competition in  the roaming market is provided in Annex 1.  
 
EN 17   EN 2.8. Who is affected by the proble m (specific actors, sectors …)? 
The stakeholders affected by the problem of ro aming charges can be di vided in three main 
categories: 
• Network operators and service providers; 
• Customers (both businesses and consumers); 
• Public authorities (especially NRAs)  
Regarding network operators and service provide rs, the figure below provides an overview of 
how each of the different categor ies of providers par ticipate to the typical value chain of a 
mobile service provider: 
 
Figure 3: Value chain of different cate gories of mobile service providers 
A detailed assessment of how and to what extent  all of these stakeholders would indeed be 
impacted under each of the policy options is further elaborated in Annex 1. 
2.9. Why is public intervention necessa ry, why at the European level? 
Need for public intervention  
High retail prices on the international roaming ma rket have been a source of concern for many 
years. If the problem mostly concerned voice calls at the beginning, it progressively extended 
to SMS messages and exchange of data. The ex cessive tariffs applied for using a mobile 
phone abroad can have a very damaging effect on consumer welfare.  
Despite past EU interventions29 to reduce roaming charges for European customers, they are 
still high and much higher than those charged at the domestic le vel (e.g. up to > 25 times for 
data services). Moreover, these prices do not re flect the underlying cost  for providing roaming 
services as margins up to over 95% can be ob served. In her recent speech in September 2010, 
Vice President Neelie Kroes, emphasised this poi nt and mentioned that examples of excessive 
                                                 
29 See Directive 2002/21/EC, Regulation 717/2007 and Regulation 544/2009. 
 
EN 18   EN charging for mobile downloading abroad  “bear little relation to the true cost of supplying the 
service”30.  
The European Commission Communi cation of June 2010 notes that “for voice and SMS, the 
extent to which operators offer prices below the le vels of the regulated caps is considered as a 
key indicator of the level of competition in the market”31. Regarding data roaming, the same 
Communication noted that ev en if tariffs are decr easing at wholesale as well as retail level 
since the introduction of the wholesale cap, th e margins made by mobile operators are still 
very high at retail level. The benefits of th e reduced wholesale prices have not yet been 
reflected on the retail market. 
The lack of competitive pressure in the international roaming market is one of the biggest 
issues. This occurs both at wholesale and retail level. The quasi-oligopoli stic structure of the 
mobile network industry32 and the existence of very fe w substitutes do not encourage 
competition on the international roaming market and do not force mobile operators to provide services at the lowest possible price. 
At the retail level, the lack of competitive pressure is also perceptible. The European 
Regulators Group noted in 2008 that regulation solely at the wholesale level does not 
guarantee that lower wholesale tariffs would result in lower retail prices
33. 
Why intervention at the EU level?  
The cross-border nature of the international roaming market has already pushed the ERG in 
December 200534 to mention that the NRAs cannot indivi dually manage the i ssue of very high 
retail prices. 
One of the most important arguments was the f act that it is impossible for a NRA which has 
to protect the welfare of nati onal consumers to control the act ions of mobile operators of 
visited countries, located by definition in other Member States.  
The NRAs are also supposed to promote the in terests of their national consumers and they 
have no incentive to force their own national pr oviders to reduce their wholesale tariff since 
the beneficiaries of this measure would be foreigners and since no thing guarantees that 
national providers could benefit from sim ilar reductions in other Member States. 
Since individual Member States have no incentive to regulate in  a way that takes into account 
the possible effect of its regulation on the othe r Member States, a centralized intervention at 
                                                 
30 Neelie Kroes European Commission Vice-President for the Digital Agenda Telecoms markets – 
Working together for change Brussels, 23 September 2010. Speech/10/472. 
31 See COM(2010)356 final (29/06/2010) 
32 The market is characterised by a limited number of players and an obvious lack of transparency.  
33 See IRG/ERG Response to the Commission’s public Consultation on Review of the functioning of 
Regulation 717/2007 and of its possible extension to SMS and data roaming services, 28 July 2008, also confirmed in the BEREC Report – Internationa l Mobile Roaming Regulation – December 2010. 
34 See ERG letter to the Directorate general of the Co mmission's DG information society, Fabio Colasanti, 
December 2005. 
 
EN 19   EN the European level is preferable as this would better ta ke into account the general interest of 
all European Member States. A European appro ach would also avoid th at individual Member 
States take divergent approaches for dealing with the problem of high prices, which would 
create obstacles to the Intern al Market since European serv ices providers and consumers 
would be treated differently according to home  country they belong to and the country in 
which they are offering or consuming roaming services. 
Moreover, the excessive retail prices for roam ing services paid by the European consumers 
when traveling in another Member State, as we ll as the difference between roaming tariffs and 
domestic prices for using mobile phones are consid ered to be an obstacle to the completion of 
the Digital Single Market. The establishment of  a single market for telecommunications is 
today a priority for the European Commi ssion. According to Vice President Kroes, “a true 
digital market is a market wh ere effective competition ensure s that citizens, customers and 
businesses do not experience substantially different  services or costs when they pass a border. 
A true Single Market is one where the price differences between voice, SMS and data relate 
only to the actual cost of prov iding these different services”35.  
Based on all elements presented above, the harm onization of national regul ations in order to 
ensure and to improve the functioning of  the Internal Market is therefore a key argument in 
favour of an intervention at the EU-level 
Another argument is the protection of the European consumer  which has always been an 
important principle at the European  level. Written into the treaties36, it is a general and 
underlying objective of all policies in the European Union.  
Can EU act, and if so, how? the principl es of subsidiarity and proportionality  
On the basis of the article 114 of the Treat y on the functioning of the European Union37, the 
European legislator has alr eady adopted 2 successive tem porary Regulations in 2007 and 
2009 contributing through the harmonization of the national legislation in the establishment of 
an internal market. Although the legal basis for these Regulations was contested by some 
mobile operators, the European C ourt of Justice (ECJ) recently confirmed the validity of the 
application of Art 95 TEC38 as a legal basis for the 2007 Regulation39. According to the ECJ, 
“the object of Regulation No 717/ 2007 is indeed to improve the conditions for th e functioning 
of the internal market and that it coul d be adopted on the basis of Article 95 EC“40. 
                                                 
35 See Neelie Kroes European Commission Vice-Presid ent for the Digital Agenda Telecoms markets – 
Working together for change Brussels, 23 September 2010. Speech/10/472. 
36 See title XV of the Treaty on the functioning of the European Union. 
37 Previous Art.95 TEC 
38 See New Art. 114 Treaty on the functioning of the European Union 
39 See Case C-58/08: Judgment of the Court (Grand Chamber) of 8 June 2010 (Reference for a 
preliminary ruling from the High Court of Justice of England and Wales, Queens’s Bench Division 
(Administrative Court) (United Kingdom)) — The Queen on the application of Vodafone Ltd, Telefónica O2 Europe plc, T-Mobile International AG, Orange Personal Communications Services Ltd 
v Secretary of State for Business, Enterprise and Regulatory Reform (Regulation (EC) No 717/2007 
40 See Case C-58/08: Judgment of the Court (Grand Chamber) of 8 June 2010, §48. 
 
EN 20   EN As shown in the previous secti on, the cross-border natu re of the internati onal roaming market 
forced the NRAs to recognize that actions at th e national level would not be sufficient to deal 
with the problem of excessive prices on the ma rket and that divergent actions among Member 
States would be ineffective and harm the esta blishment and the functio ning of the internal 
market.  
The European Court of justice al so concluded that the principle of proportionality is respected 
in the case of Regulation 717/2007. The Court found that the partic ular characteristics of the 
roaming market allowed the legislator to believ e that reduced tariffs at the wholesale level 
will not necessary result in redu ced prices at the retail level. The ECJ then emphasized the 
objective of consumer protection and on th e temporary nature of the Regulation41. 
The setting of prices caps by the European legi slator aims to correct in the short term the 
dysfunctions observed on the inte rnational roaming market by lowe ring retail prices and thus 
avoiding consumers paying excessive roaming charges when travelling in another Member 
State. Given the above mentioned characteri stics of the international roaming market, 
regulation at the wholesale level as well as at the retail level is justified. Caps solely at wholesale level do not automatically guarantee th at consumers will benefit from the reduced 
wholesale prices. Ceiling prices at the retail level only could squeeze small providers’ margin, 
favouring thereby only large mobile operators. 
It is also important to mention that the temp orary basis of current roaming regulation is a 
crucial argument to assess the proportionality of the European action. This underlines the 
European legislator’s efforts to create the conditions for competition to develop on the international roaming market so that, in the futu re, competitive pressure will be sufficient to 
guarantee low retail prices with a less constrai ning regulation or even without any regulation. 
The proportionality of regulator y options including elements which aim at addressing the 
structural problems in the EU roaming market  should be assessed against the objective of 
achieving competitive market. For example, implementation costs of structural solution(s) enhancing competitive dynamics should be weight ed against the costs of continued price 
regulation in the absence of competitive pressure. 
2.10. Conclusion on the roaming market and its development 
Based on the evidence presented above, the following conclusions can be drawn on the 
European roaming market and its development: 
– The roaming market is significant in te rms of size (4,777 billion EUR in 2009); 
– Roaming price levels have decl ined steadily in the last few years, but this is mainly 
due to the regulation of wholesale and reta il prices (cf. conclusion below on the 
difference with price ceilings); 
                                                
 
41 See Case C-58/08: Judgment of the Court (Grand Chamber) of 8 June 2010, §69. 
 
EN 21   EN – For retail data roaming se rvices, only services currently not subject to price 
regulation, declines in  wholesale prices (-70%42) do not appear to have been 
structurally passed through to the retail level (-15%43).  
– The margin between wholesale and retail prices in absolute terms has remained 
constant or has slightly d eclined. This means however that the margin in relative 
terms has risen significantly; 
– Average EU tariffs remain in general very close to the price caps defined by the 2009 
Regulation; the only exception are wholesale data roaming tariffs which were in Q2 
2010 63,6% below the cap of 1 EUR/MB (which  is however further declining to 0,5 
EUR/MB on 1 July 2011). Competitive ma rket forces are t hus not reducing the 
roaming prices much further; 
– There are large variations between the minimum and maximum national prices when 
compared to the EU average per services. Th ese variations are pa rticularly strong for 
the non-regulated re tail data roaming service (from  
-90,33% to +279,26% compared to EU aver ages). These variations are further 
hindering factors for the accomplishment of the single market. 
– The comparison of the roaming prices with  the underlying costs indicates very large 
differences both at the retail  and at the wholesale leve l (from ± 50% margin up until 
>90%). This confirms that there is toda y no meaningful relati on between the roaming 
tariffs and the underlying costs and th at there are significant margins for 
improvement when bringing the prices down to cost based levels; 
– Based on the comparison of the roaming prices with the domestic prices (retail), it 
was concluded that roaming prices are t ypically a multiple of the price at the 
domestic level. Voice roaming calls were  on average 3 to 4 times more expensive 
than domestic outgoing calls; for SMS and da ta, the ratio is respectively 2,5 and 25 
to 35 times higher; 
– Transparency measures taken so far have been positively welcomed by consumers 
and have improved their awareness of roaming prices and their ability to control their 
invoices. It could however not be observed if or how these have actually impacted 
the take-up of roaming services by consumers; 
– A number of suggestions were made by ma rket players for modifying the scope of 
the transparency measures (e.g. including VAS services, excluding pre-paid data 
customers from the bill control measures as  well as MMS) as well as regarding the 
implementation of the measures (e.g. suitabili ty for new devices such as e-readers, 
application of average exchange rate outside the euro zone); 
– The volume of roaming voice traffic has rema ined rather stable over the last few 
years. SMS roaming has increased more sign ificantly in volumes during the last four 
quarters for which information is available (+23,1%) than for the four quarters preceding that period (+4,3%). This coul d possibly indicate more significant 
substitution of voice by SMS, e.g. arising fr om the current economic crisis. Finally, 
                                                
 
42 Between Q2 2009 and Q2 2010 
43 Between Q2 2009 and Q2 2010 
 
EN 22   EN data roaming is still growing fast, alt hough at a slower pace dur ing the last four 
quarters (+43,6%) compared to the preced ing four quarters (+102,46%). Again, part 
of this could possibly be explained by the current economic climate; 
– A number of – at least partial – substi tutes are available for roaming services, 
allowing consumers to reduce their costs. None of these alternatives are however 
sufficiently easy to use in order to convince consumers to use them as real substitutes. As such, the existing partial substitutes – that are rather to be considered as a complement  to roaming services - do not put competitive pressure on the 
roaming market; 
– Within the roaming market, SMS was indi cated as the main substitute used for 
reducing the cost of roaming; 
Technological developments in terms of devices (e.g. dual-SIM phones or smartphones) may 
in the future allow some (although limited) co mpetitive pressure. However, this is not 
expected in the short or medi um term. Development of new a ll IP networks (especially LTE) 
supporting higher capacity and possi bly leading to further deve lopment and more intensive 
use of data may in the longer term eliminat e voice and SMS roaming problems (as voice and 
sms would become part of the data traffic) , but would not as such solve data roaming 
problems. In conclusion, in the absence of pro-competitive structural measures, the market 
alone is not expected to deliver much lo wer roaming prices in the upcoming years. 
3. D
EFINITION OF THE POLICY OBJECTIVES  
Based on this framework of objec tives, different policy options can be analysed in order to 
address how the problem of roaming charges that are too hi gh as a result of market forces  
could be dealt with and thus to evaluate whether the current roaming regulation should be 
adapted and if so, how this should be done in  order to create a Digital Single Market . 
3.1. General objectives 
For defining the general objectives of the policy initiative sought for, it is useful to take a 
broader view of the general long term EU policies and objectives in which the policy initiative 
would be situated. More specifically, th e EU 2020 Strategy which was launched by the 
Commission on 3rd March 201044, aims that Europe would ‘be turned into a smart, 
sustainable and inclusive ec onomy delivering high levels of  employment, productivity and 
social cohesion’ . 
One of the building blocks of this new strate gy is the new Digital Agenda for Europe (DAE)45 
which defines a number of the ‘Key Performan ce Targets’ for attaining the Digital Single 
Market. In relation to international roaming services, the target is that ‘the difference between 
roaming and national tariffs would approach to zero by 2015’46. This target will be achieved 
                                                 
44 See Communication from the Commission: Europe 2020 – A strategy for smart, sustainable and 
inclusive growth, COM (2010) 2020 of 3rd March 2010. 
45 See http://ec.europa.eu/information_society/digital-agenda/index_en.htm. 
46 See Annex 2 of the Digital Agenda for Europe 
 
EN 23   EN if competition  in mobile markets gives consumers the rapid and easy choice  of a roaming 
service at, or close to, a relevant competitive domestic price level. 
Given these aims of the EU 2020 and the DAE and referring to Chapter 2 on why public and 
EU intervention are required, the issue that is dealt with  in this IA is to improve the conditions 
of the functioning and ensure further promotion of the development of the  Digital Single 
Market with regard to Community wide roaming services .  
Referring to the Framework Directive47, achieving a true Digital Si ngle Market requires an 
intervention that meets three general policy objectives: 
• The first general objective relates to ensu ring the development of a single coherent 
regulatory framework, contributing to the development of the internal market  (cf. 
also Article 8.3 of the Framework Directive). 
• The second general objective relates to s timulating and strengthening sustainable 
competition  in the Digital Single Market (cf.  also Article 8.2 of the Framework 
Directive).  
• Finally, the third general objective is to promote the interest of citizens  and to ensure 
a high level of consumer protection for EU consumers (cf. Article 8.4 of the 
Framework Directive). 
3.2. Specific objectives  
For each of the three general objectives above, a number of specific objectives can further be 
derived. Specific objectives for ensuring the development of a single coherent regulatory 
framework, contributing to the development of the internal market : 
• Objective 1: Prevent distortions between Me mber States i.e. in terms of regulatory 
divergences so that conditions for competition on are equal across the ; 
• Objective 2: Ensure an optimal level of governance in terms of avoiding isolated 
measures at the Member States level.  
Specific objectives for stimulating and strengthening sust ainable competition in the Digital 
Single Market: 
• Objective 3: Ensure that competitive market  developments are stimulated and that 
technological developments are not hindered; 
• Objective 4: Strengthen the competitiveness of European industry by ensuring that 
businesses have access to competitive roaming prices. 
Specific objectives for promoting the interest of consum ers and ensuring a high level of 
consumer protection fo r all EU consumers: 
• Objective 5: Ensure user choice and transparency; 
                                                 
47 See Directive 2002/21/EC; ame nded by Directive 2009/140/EU 
 
EN 24   EN • Objective 6: Ensure that prices are at a levels reflecting underlying costs (as they 
would result from competitive market forces); 
• Objective 7: Ensure that consumers can easily benefit from prices reflecting 
underlying costs; 
3.3. Operational objectives 
For each of the specific objectiv es presented above, a number of operational objectives or 
“measures” can be identified.  
Specific objective Operational measures 
Objective 1:  
Prevent distortions 
between Member States • Ensure regulatory coherence between member states; 
• Allow for consistent implementation of the chosen 
regulatory approach in all Member States; 
• Ensure that comparable competitive market 
conditions for roaming apply in all Member States. 
Objective 2:  
Ensure an optimal level of 
governance • Ensure that the heterogeneity  of Member States (e.g. 
countries with positive compared to negative roaming 
traffic balances) is given sufficient attention in order to correctly evaluate the di stribution of impacts on all 
MS. 
Objective 3:  
Ensure that competitive 
market developments are stimulated and that technological 
developments are not 
hindered • Ensure that smaller network operators and MVNOs 
can benefit from competit ive wholesale markets and 
compete effectively at the retail market (avoid that 
markets become too concentrated); 
• Ensure that challenges regarding the technical 
feasibility of imposed measures do not lead to 
operators exiting the market; 
• Allow MVNOs to use own IMSI codes; 
• Allow operators (e.g. full MVNOs) currently 
excluded from the STIRA framework to use the 
available standard templates for roaming agreements; 
• Allow for the recuperation of innovation costs 
(limited in the case of roaming services); 
• Ensure that regulatory in tervention does not weaken 
the global position of European mobile operators; 
• Ensure that there is no risk of price squeeze 
(especially for the smaller operators); 
 
EN 25   EN Specific objective Operational measures 
• Ensure that the market for wholesale roaming is open 
to different type of prov iders (e.g. MNO as well as 
MVNO) and that no discrimination takes place for the conclusion of w holesale contracts; 
• Ensure that wholesale roaming prices are transparent 
(e.g. how do wholesale resa le roaming prices for 
MVNOs relate to wholesal e inbound roaming prices 
for MNOs, how are roaming prices to be applied in case of VAS,…); 
• Provide operators the possibility to further develop 
services in parallel with the imposed service 
provisions;  
• Ensure that MVNOs have sufficient room in their 
wholesale resale agreement in order to differentiate 
the retail roaming products. 
• Allow market entry of specialized roaming operators, 
offering stand alone roaming services across Europe 
Objective 4: 
Strengthen the 
competitiveness of European industry • Ensure levels of roaming prices that are competitive 
at the global level; 
• Allow business users to negotiate special roaming 
terms so that these can benefit from competitive roaming charges.  
Objective 5: 
Ensure user choice and 
transparency 
 • Ensure that the user can control / monitor its 
international roaming expenditure; 
• Ensure user choice regardi ng bill control measures 
(e.g. what limit); 
• Ensure user choice in terms of its (unbundled) 
provider of roaming services; 
• Ensure easy access to information on the applicable 
tariffs; 
• Ensure easy access to information on possible 
options or choices availabl e to the end-user (e.g. 
regarding bill control measures); 
• Ensure availability of information on roaming tariffs 
in the appropriate language. 
 
EN 26   EN Specific objective Operational measures 
Objective 6: 
Ensure that prices are at a 
levels reflecting underlying costs (as they would result from competitive market  forces)  
  • Ensure that price/structural mechanisms are put in 
place to avoid unreasonable margins, leading to 
excessive prices, can be  obtained by operators; 
• Ensure that levels of roaming tariffs are better 
aligned with tariffs for domestic mobile services (i.e. ensure that differences are close to what is justified 
based on the underlying costs); 
• Ensure that the price reductions at the wholesale level 
are transferred to the retail level. 
Objective 7:  
Ensure that all categories 
of consumers can benefit from prices reflecting underlying costs • Ensure that the decrease of roaming prices for one 
category of roaming consumers is not at the detriment of another category of consumers; 
• Ensure that compliance with regulation can be 
monitored. 
4. ALTERNATIVE  POLICY  OPTIONS 
This section examines a range of options for ad dressing the problems highlighted in previous 
sections. Apart from complete removal of re gulation (also considered below) the options 
broadly fall into two categorie s i.e. options involving conti nued price regulation or options 
involving structural approaches aimed at tackling the root caus es of the problem but possibly 
also including safeguard price regulation. For the purposes of this impact assessment these 
options will be grouped as follows: 
1. No regulation  after June 2012  
2. Maintaining the current approach  of applying both wholesale and retail price cap 
regulation, including the extensi on of the retail price caps to data roaming services 
(in b and c below). Three va riations are considered: 
(a) Continuation à l’identique  with the same price ca ps (baseline scenario); 
(b) Extension of the current methodology with adjusted annual price caps 
plus retail data roaming price caps;  
(c) Roam-Like-Home/Roam like a Local with fixed mark-up. 
3. Structural solution - introduction of a combination of 2 or 3 new elements at the 
wholesale and retail levels: 
(d) decoupling (home and visited);  
 
EN 27   EN (e) granting access to mobile virtual network operators (MVNOs);  
(f) the above combined with safeguard price caps.  
(g) Spot market  
4.1. Option 1: No regulation 
“Option 1: No regulation” mean s the expiry in June 2012 of the current roaming Regulation 
544/2009 without replacing it by any other form of regulation. 
Maximum price caps would no longer be applicab le at the wholesale level, or at the retail 
level. Operators would be free to apply any roaming charges th ey want on both the wholesale 
and the retail market. 
Operators would also no longer be obliged to apply any transparency measures in order to 
allow customers to better control their roaming expenses. Charging on a per second basis 
would also become optional at the wholesale and at the retail level as would the maximum 30 
seconds of initial charging period. 
Most responses to the public consultation on roaming argued for a need of a further regulatory 
intervention beyond 2012, this is particulary tr ue for consumer organisations and national 
authorities. Industry response was mixed – most  acknowledged at least the inevitability of 
further regulation and some argued that compe tition has developed to a level that does not 
warrant future regula tory intervention.  
4.2. Option 2: Maintaining the current approach 
Option 2(a): Continuation à l’identique – same price ceilings  
This assumes the same price caps and the sa me regulatory approach as in Regulation 
544/2009 would be maintained and that the regu lation would not be extended to new areas. 
The regulatory approach in Regulation 544/2009 c onsists of a combination of both wholesale 
and retail price caps (for voice se rvices and SMS), wholesale price caps (for data services) 
and transparency measures allowing consumers to better control their expenditure for international mobile roaming. Furthermore, ob ligations regarding the unitization of billing 
were introduced. For this impact assessment, this first scenario will be considered as the baseline scenario. Although the estimation of ec onomic impacts of various scenarios vis-à-vis 
the baseline scenario is carried out for the period 2012-2014, in the overall assessment it is 
assumed that under the baseline scenario the sa me price caps would apply for the period of 
ten years, i.e. the proposed durat ion of the revised Regulation.  
Most respondents to public consultation acknow ledged that the current regulation succeeded 
to bring benefits for consumers. Much fewer, however, believed that competition was stronger because of the current regulati on. Industry response in particular was sceptical of current 
model's ability to foster competition. Few indu stry stakeholders argued for wholesale price 
caps regulation only and elimination of retail price cap regulation. 
 
EN 28   EN Option 2(b): Extension of the current methodology with adjust ed price ceilings plus cap 
on data roaming 
For the second scenario, further annual adjustments will be determined following a 
methodology that is consistent with the one that  was previously devel oped for the Regulation 
544/200948. Furthermore a price ceiling for retail data roaming is added.  
The methodology for determining the glide path is based on the analysis of the structure and 
level of forward looki ng underlying production costs  (where relevant incl. retail costs) and the 
assumption that the regulated price caps should refl ect these costs. A detailed analysis of the 
underlying costs of roaming serv ices is presented in the BEREC report on the Roaming 
Regulation.  
Format of the price caps 
For voice services, the price-caps are derived based on the difference between the current 
level of the caps and the estimated underlying co sts and are determined in a linear way, as 
was done for the current Regulation, i.e. in terms of a reduction by an equal fixed annual amount (i.e. 3 cEUR) per year. For SMS roam ing, one single price ceiling for the whole 
regulated period was determined as - unlike for voice services - it was difficult to predict a 
significant downward trend for underlying SMS roaming costs at the time when the current 
regulation was developed. This has however cha nged now and consequently a glide path is 
included for SMS. Finally, for data service, a non-linear price cap was set for the wholesale 
services. This will now be replaced by price cap s with a glide path, bot h at the wholesale and 
retail level. 
The approach presented above leads to the following price caps for each of the roaming 
services: 
Voice services
 
Based on the estimated average cost for wholesale roaming it was first of all concluded that a 
continued reduction by 4cEUR per year over a thr ee year period would lead to approximately 
the cost estimated by BEREC (i.e. 5,42cEUR) . This reduction corresponds to a compound 
annual reduction of ± 30%. 
For determining the retail roaming price caps, account was taken of the fact that the price 
ceilings in the 544/2009 Regulations aimed at incr easing the margin availa ble to operators to 
100% (compared to the level of 65,3% in 2008 ). However since significant competition has 
failed to materialize over the course of the cu rrent Regulation it is considered that for this 
scenario a margin of 100% is unnecessarily hi gh. It is therefore prop osed for the adjusted 
annual price ceilings under this op tion, that a margin of 70% shoul d be applied, at least for the 
retail calls made. 
                                                 
48 See SEC(2008) 2489 
 
EN 29   EN By consequence, the price ceiling per minute of retail calls made (‘Retail outgoing’) was 
determined based on the adjusted price ceiling for roaming calls, includ ing a mark-up of 70%. 
For the retail calls received (‘Retail incoming ’) no corresponding regulated  wholesale ceilings 
are available. However, the BEREC report has provided inputs on th e underlying wholesale 
costs for receiving a roaming call (i.e. 5,3cEUR) . It could be observed that the current 
regulated cap for a retail incoming call is indeed approximately 100% higher than the 
corresponding wholesale cost. Theref ore, in order to allow for a glide path for these services 
as well, it was decided to bri ng the retail mark-up down to 50%49. This implies that 
assumption was taken that mobile operators are mainly focusing their retail efforts at 
stimulating increased consumption by their ow n customers, which is reflected in the 
allocation of a lower retail cost for call received  compared to calls made .  
in EUR/min (excl. VAT)1 July 
2012 1 July 
2013 1 July 
2014 
Retail outgoing 0,24 0,17 0,10 
Retail incoming 0,10 0,09 0,08 
Wholesale 0,14 0,10 0,06 
Table 1: Adjusted annual price ca ps for voice roaming services 
SMS services  
The forward looking underlying costs estimat ed by BEREC for the wholesale costs 
correspond on average with the outc ome of the pure NITA approach50 of June 2008 (i.e. 
0,8cEUR). Minimum and maximum costs co rrespond respectivel y to 0,06cEUR and 
2,67cEUR. Based on these elements, it was decide d to bring the wholesale price cap for SMS 
down to 2cEUR. 
Keeping in mind that it could be too drastic to br ing the wholesale roaming cap down from 
4cEUR51 to 2cEUR at once, it could be envisaged to introduce a glide path  for the SMS price 
ceilings, as was previously done for voice roaming.  
Furthermore, the difference between the wholes ale and retail costs for SMS roaming consists 
of the internal network cost for terminating the SMS on the own network or an average SMS 
terminating paid if the SMS is sent to anothe r network, as well as a compensation for retail 
costs (incl. reasonable return). These additional re tail cost elements were previously estimated 
at 7cEUR52. The new forward looking costing exerci se of BEREC now indicates a much 
                                                 
49 This is still the upper limit of the range of retail ma rk-ups that were considered by BEREC in the report 
‘International Mobile Roaming Regulation’ – December 2010 
50 See SEC(2008)2489 – page 59 
51 I.e. corresponding to 2 times 2cEUR in order to account for an allowance for the unrecovered cost of 
SMS terminating. 
52 Approximately twice the cost of terminating 25% of the SMSs on the own network (valued at a cost of 
0,5cEUR) and 75% of the costs on another network (valued at 4,4cEUR); resulting in a weighted 
 
EN 30   EN lower cost of 0,53cEUR (for prospective cost-bas ed terminating charge) and a retail mark-up 
between 5% and 50%.  
It needs however to be kept in mind that the retail roaming charges should allow the operator 
to pay for the (domestic) termination of the SMS. The charges for this service are not 
regulated and amounted to 4,4cEUR on average in 2008. Bringing the component relating to 
domestic termination down to the prospective co st level of 0,53cEUR could therefore be too 
drastic, so an intermediate valuation for this  service could be more appropriate. Again, given 
the significant gap between the current roaming price ceilings and the u nderlying costs, it is 
suggested that a glide pa th would be introduced. 
The calculations described above, lead to th e following price ceilings over the period of 
regulation:  
in EUR/SMS sent 
(excl. VAT)1 July 2012  1 July 2013  1 July 2014  
Retail 0,05 0,05 0,03 
Wholesale 0.03 0.03 0.02 
Table 2: Adjusted annual price caps for SMS roaming services 
Data services BEREC indicates an average wholesale cost  of 8cEUR/MB, whereas the maximum cost 
presented equals 15cEUR/MB. Given the remark  that cost for mobile data could be 
overestimated, it was considered that a glide pa th towards the level of the average wholesale 
costs is a not too aggressive approach. More precisely, the estimated average wholesale cost 
for data roaming can be reached by a fi xed annual decrease of 10 to 20cEUR/MB
53. Based on 
the BEREC estimate for average cost per MB a target wholesale cap of  10c in 2014 is not 
unreasonable. This leads to the following ad justed annual price cei ling over the period of 
regulation: 
in EUR/MB of data transmitted 
(excl. VAT1 July 2012  1 July 2013  1 July 2014  
Wholesale 0,30 0,20 0,10 
Table 3: Adjusted annual price caps fo r data roaming services (wholesale) 
Method for applying the reta il price caps for data  
                                                                                                                                                         
average costs of 3,4cEUR times two in order to include an allowance for the unrecovered cost of 
termination (cf. SEC(2008) 2489 – page 61). 
53 As of 1 July 2011, in accordance w ith the current Re gulation, the wholesale cap is set at the level of 
0,50cEUR which means a reduction of 20 cEUR on 1 July 2012. 
 
EN 31   EN Based on the BEREC data it is clear that the ga p between the average retail prices that were 
observed in 201054 and the estimated underlying costs is very significant. Given that past 
experience has shown that operators do not tend to pass decreases of wholesale prices on to 
the consumers (but generally retain higher reta il margins), in the absence of pro-competitive 
structural changes, it would be reasonable to limit the retail margin s to 70%, as for retail calls 
made and SMS. 
Given the considerations above with regard to safeguard reta il caps and allowing a 70% mark-
up at retail level produces the following glid e path for retail and wholesale prices:  
in EUR/MB of data transmitted 
(excl. VAT)1 July 2012  1 July 2013  1 July 2014  
Retail 0,51 0,34 0,17 
Wholesale 0.30 0.20 0.10 
Table 4: Annual safeguard price caps for data roaming services (retail) 
In summary the following price caps can be proposed for Option 2b  
Voice     
in EUR/min (excl. VAT)1 July 
2012 1 July 
2013 1 July 
2014 
Retail outgoing 0,24 0,17 0,10 
Retail incoming 0,10 0,09 0,08 
Wholesale 0,14 0,10 0,06 
SMS    
in EUR/SMS sent (excl. VAT)1 July 
2012 1 July 
2013 1 July 
2014 
Retail  0,05 0,05 0,03 
Wholesale 0,03 0,03 0,02 
Data    
in EUR/MB of data transmitted 
(excl. VAT)1 July 
2012 1 July 
2013 1 July 
2014 
Retail 0,51 0,34 0,17 
                                                 
54 The overall average for on -net and off- net at Q2 2010 was 1, 30 EUR/MB, whereas the overall average 
for off-net traffic was 2,604 EUR/MB 
 
EN 32   EN Wholesale 0,30 0,20 0,10 
This option was particularly welcomed by the c onsumer organisations and to some extent by 
the national authorities. Indus try response was negative towa rds continued downward retail 
price regulation and especially nega tive with regard to retail re gulation of data services, which 
in most industry stakeholders view would negatively influence any competitive dynamics 
exhibited by data roaming market. 
Option 2c – Roam like at  home/Roam like a local 
This approach links the roami ng price paid by the individual cu stomer to the domestic price 
for national calls by that same customer. We cons ider here the variant “RLAH+X” (that is, the 
roaming price is an amount greater than the co rresponding domestic pri ce). In principle, the 
roaming premium covers two things. First, it allows recovery of the genuine (albeit small) additional costs of provision of roaming. Second, it aims to deal with issues that arise from 
price differences across Europe. The option only delivers tariffs “like at home” if the value of 
X is indeed sufficiently small. This requires two preconditions:  
(a) Wholesale prices very close to cost-oriented levels; and  
(b) Broad similarity in domestic tariffs across Europe.  
If the conditions permit "X" to be set at a su fficiently low level, i.e. including low wholesale 
roaming prices, providers might take the commerc ial decision to offer “Single Europe” tariffs 
where the price of a call, for example, was the same wherever the customer was situated, i.e. in their home country or a nother EU Member State.  
In roam like a local, the roaming price is linked to the price paid for national domestic calls in 
the visited country (as opposed to  the roamer's home country). Again, this could be seen as a 
method of reaching the DAE target.  
This method also requires adoption of a mark- up to avoid at least some of the problems 
mentioned above. The size of the mark-up can be  “tuned” so that roaming prices approach 
domestic prices to a lesser  or greater extent, according to the policy objective.  
This method has some of the char acteristics of “Roam like at ho me” but also some significant 
differences. On the positive side, the linkage of roaming prices to domestic prices in the visited country significantly reduces the scope  for margin squeeze. On the other hand, the 
measure is less consumer-friendly. The consumer would pay a different price in each visited 
country (unlike at present). Most would have li ttle idea in advance what they will be paying 
(unless they take the trouble to  search for the information) . For those who disregard the 
welcome SMS messages, they will have little idea of the charge until they receive their bill. 
The method would also necessitate a significant statistical exercise, probably annually, to 
establish and calculate a benchmark rate for each  visited country, increasing significantly the 
regulatory burden for industry and regulators as regards implementation and compliance. 
Responses to public consultation on the altern ative approaches for price regulation (Roam-
Like-at-Home/RLAH or Roam-Like-a-Local/RLA L) were quite divergent. Regulators, 
 
EN 33   EN national authorities and consumer organizations  argued to continue with the current price 
regulation approach. In those in stances where industry stakeholde rs expressed in terest in the 
alternative price regulation models, there was no consensus regarding which of the 
alternatives, RLAH or RLAL, model would be better.  
4.3. Option 3a: Decoupling of  roaming services  
Option 3a relates to the introduction of an add itional structural measure at the retail level. 
This option is also often referred to as “d ecoupling” or “(pre-)sel ection” of the roaming 
operator. Under this option, roam ing services would no longer always be offered as part of a 
bundle with domestic mobile serv ices. Instead, customers would be  able to easily choose and 
purchase roaming services from an operator othe r than the provider of the domestic services.  
Selection of the most appropriate scenario  
Based on the assessment of advantages and disadva ntages as presented in the Table below, it 
was concluded that unbundling in the domestic  market is the most promising approach and the 
other two approaches are exclud ed from further analysis. The selected scenario would thus 
allow consumers to opt-out  of the default roaming services offered by their provider of 
domestic roaming services and pre-select an alternative home operator for roaming services only. Each time the customer roams, the retail  roaming service would automatically switch to 
this alternative provider. 
As the unbundling option consists of a measure th at is meant to improve the awareness of 
customers of the level roaming prices, consider ing that this should lead to competitive 
pressure bringing the prices clos er to cost levels, this assessment is mainly made from the 
viewpoint of the consumers: 
Unbundling in the domestic 
market (home country) Unbundling in the visited 
country Choose your operator at 
the border 
Advantages 
Consumers are familiar with the other mobile operators offering services in their country; 
Information on roaming offers is 
available in the language of the consumers; 
An opt-out approach could avoid 
that all consumers are obliged to modify their mobile contract, even if they never use roaming services. Competitive pressure could in 
some circumstances be more important as the operators in the visited countries have a direct possibility for attracting new customers (the choice of roaming operator could become comparable to e.g. the choice of a car rental company). 
 The relation with the own 
operator supplying domestic retail services would be maintained; 
Consumers would not be 
obliged to do research on foreign providers and subscribe to their offer before travelling abroad since information about available providers and tariffs would be sent by SMS at each border. 
 
EN 34   EN Advertising campaigns to make 
the consumers aware about the opportunity of se lecting another 
provider for roaming and regarding the different available tariff plans could be more effective. 
Consumer would have the same 
roaming services provider for all European countries. 
Disadvantages 
If not accompanied by mandated wholesale access at cost oriented prices, this opti on risks not being 
effective. 
Not all consumers would switch 
towards alternative more advantageous offers. However, the consumers who would not switch towards alternative more advantageous offers should normally benefit from the reduction of prices to be expected due to the competitive pressure created by such offers. 
 Consumers are not familiar 
with the other mobile operators offering services in the visited country; 
Information on roaming offers 
is possibly not av ailable in the 
language of the visiting consumers; 
This scenario is per definition 
“opt-in” so imposes a large administrative burden, also for users with very limited roaming traffic volumes. 
Consumer would have to select 
a different provider in each visited European Member State. It could very soon become 
very cumbersome if a roaming operator needs to be chosen every time you cross a border (even if the home provider is assisting by providing an overview of the tariffs available at different operators; 
 Information received by 
SMS giving an overview of the different available providers’ tariffs could possibly be too short to make a considered choice. Problems of transparency could appear. 
Table 5: Comparison of possible scenarios for the unbundling option  
Despite that most respondents to the roaming public consultation agreed that a structural 
solution should always be preferred instead of price regulation, most of  the respondents from 
all stakeholder groups were not certain or convin ced about feasibility, costs and complexity of 
the decoupling/unbundling option. Only few stake holders were of the opinion that unbundling 
solution would deliver the best result. 
4.4. Option 3b: Additional wh olesale Access Measures  
Option 3b relates to the introduction of an additional structural measure at the wholesale level. 
Depending on the scenario selected, these measur es can relate to the access to specific levels 
 
EN 35   EN of wholesale charges  or to the access to specific services itself . Moreover, these services can 
be restricted to roaming services  or correspond to all mobile services. 
Selection of the most appropriate scenario  
The table below compares possible approaches for defining an additional measure for 
wholesale access: 
Same wholesale 
caps apply to 
MNOs and 
MVNOs Limited wholesale 
access for MVNOs 
for roaming  Full wholesale access for MVNOs for all 
mobile services 
Advantages 
Enabling MVNOs to gain access to regulated wholesale prices could stimulate greater competition for retail roaming services 
 Enabling MVNOs to 
gain access to roaming services could stimulate greater competition for retail roaming services 
 This option could stimulate greater 
competition for all mobile services by allowing that any MNO or MVNO would be entitled to enter any other EU national market on the basis of guaranteed wholesale access (at regulated prices); 
As the presence of the same M(V)NO in 
different EU member st ates could replace the 
need for wholesale roaming agreements, this could stimulate the emergence of a true pan-European mobile market. 
Disadvantages 
  If not limited to the roaming services, this 
options could strongly distort the development of competition in the domestic markets, going far beyo nd what is necessary 
to solve roaming specific problems  
Table 6: Comparison of possible approaches fo r defining additional wholesale measures  
Decoupling (Option 3a) is not likely to be ef fective without also a dding an access obligation 
which will facilitate market entry. Therefore Option 3(a) s hould be combined with Option 
3(b). It was conclude d that the best approach consists of a combination of th e first and second 
approach. This implies that MVNOs would have the choice between continuing buying 
roaming services from their domestic MNOs (wh ile having the guarantee that the rate applied 
are consistent with the regulated price-caps at  the wholesale level) and directly negotiating 
roaming agreements with MNOs in other memb er states (allowing MVNOs to benefit from 
the same conditions as MNOs at the inbound market). 
 
EN 36   EN Furthermore, while the combination of these options is likely to produce positive competitive 
effects in the roaming market, safeguard retail pr ice regulation is desirabl e to ensure that the 
existing consumer benefits are preserved durin g a transitional period of implementation of 
such structural solutions. Such safeguard caps should be set at sufficiently high levels which 
do not distort the potential competitive benefits of structural solutions  and could be removed 
completely once the structural approaches have had an opportunity to deliver concrete gains 
for all consumers.  
In their responses to the roaming public co nsultation, smaller operators and several non-
operator industry stakeholders supported additional measures for wholesale access for roaming. 
4.5. Option 3c – Safeguard price caps acco mpanying the decoupling and wholesale 
access measures 
The above (Options 3a and 3b) combined w ith safeguard price caps. The unbundling measure 
combined with MVNO access is assumed to in troduce competitive pressure in the retail 
market. Stringent retail price caps would therefor e not be needed to get competitive prices for 
the consumers. However, it would be appropriate to  keep retail caps, set at a sufficiently high 
level to leave room for competition in order to  ensure a safety-net for consumers until the 
unbundling measure has had an oppor tunity to become fully opera tional and effective. It is 
expected that the retail safeguard caps would remain in place for a period of years into the 
course of the next Roaming Regulation.  
 
EN 37   EN The retail safeguard caps would follow a glidepath until the structural solution is in place (two 
years after the commencement of the next Re gulation i.e. by June 2014) after which the 
safeguard caps would remain flat for up to a further two years. These caps could be removed 
completely thereafter. The other features of th e structural solution i.e. the wholesale caps 
(kept at the level of 1 July 2015) and the regul atory obligations to f acilitate the consumer's 
ability to choose an alternative provider for roaming services only, would need to remain in 
place for a longer period, in order to ensure regulatory stability and predictability for 
operators, and in particular for new entrants in the decoupled roaming market. However, it is 
possible that the wholesale caps could also be  removed following a subsequent two-yearly 
review (e.g. six years after the commencement of the next Regulation). In  this respect, it is 
important to note that the wholesale market for data roaming services exhibits more dynamism than the corresponding wholesale markets for voice and data.  
Price caps at the wholesale level
 
Since the unbundling option consists of adding a structural measure at the retail level , it 
would not imply any change at the wholesale level. There is no reason to believe that 
providing MVNOs with similar conditions as MNOs  would as such lead to lower wholesale 
charges. By consequence, the same wholesale price caps will be applied as under Option 2b. 
These are summarized for all services in the table below: 
in EUR (excl. VAT) 1 July 
20121 July 
20131 July 
2014 
Voice (per minute) 0,14 0,10 0,06 
SMS (per SMS) 0,03 0,03 0,02 
Data (per MB) 0,30 0,20 0,10 
Table 7: Wholesale price ca ps for the unbundling option  
Safeguard price caps at the retail level  
At the retail level, a specific set of safeguard  price caps have been defined. Indeed, while the 
proper functioning of the unbundling measure co mbined with MVNO access is assumed to 
introduce competitive pressure in the retail market, it would be appropriate to foresee a safety-net for consumers while awaiting the unbundling measure to become fully operational and 
effective. More precisely, the assumption was ta ken that, compared to the baseline scenario 
only 50% of the additional decrea se for bringing down the caps at cost based levels (including 
retail margin) would be taken into  account. It is then up to the market to deliver further price 
decreases. 
This leads to the following set of safeguard retail price caps: 
 
EN 38   EN  
in EUR (excl. VAT) 1 July 
20121 July 
20131 July 
2014 
Voice-calls made (per minute) 0,32 0,28 0,24 
Voice-calls received (per minute) 0,11 0,10 0,10 
SMS (per SMS) 0,10 0,10 0,10 
Data (per MB) 0,90 0,70 0,50 
Table 8: Retail safeguard price caps for the unbundling option  
Transparency measures and unitization of billing The same measures regarding transparency and the unitization of billi ng would continue to 
apply as under the cu rrent Regulation 544/2009. 
4.6. Option 3d: Spot market 
The spot market refers to a trading mechanis m which would be able to remove the current 
barrier related to the fact that the volume of roaming traffic that an operator can offer in 
return, largely determines the wholesale prices  in the wholesale inbound market. If this spot 
market works well, it would lead thus to cost or iented wholesale prices for all roaming traffic 
and all operators instead of the much higher ou tcome of the current negotiations, leading to 
much higher wholesale charges which are solely  actually paid for the unbalanced traffic.  
Moreover, since MVNOs would also be allowed to access this market, the spot market could 
also (and to the extent that MVNOs would actua lly directly go to the spot market) remove 
those barriers that are specific to the resale ma rket. Those barriers relate mainly to the strong 
dependency of MVNOs on the home MNOs, the fact that supply in the resale market does not 
allow for differentiation and the high  risk of price squeeze for MVNOs. 
More precisely, the spot market would separate  the offer  to supply  a given number of roaming 
minutes in a given visited country from  the offer to purchase  a given number of roaming 
minutes. Bilateral traffic exchanges would be  disallowed. Total vo lumes of demand and 
supply would be broken down in standard size “bonds” in order to allow for easy and neutral 
trading. 
The implementation of this option would requi re the obligation that  all wholesale inbound 
roaming traffic would need to be purchased by means of open trading (e.g. via an electronic 
platform). 
Overall a neutral reaction from the stakeholders in reply to public consultation respondents to 
the public consultation. Some i ndustry stakeholders questioned a pplicability of spot market 
 
EN 39   EN principles for roaming, which as such is not a commodity. Several smaller operators 
expressed interest in spot market for roaming. 
5. ASSESSMENT OF THE POLICY OPTIONS  
5.1. Qualitative assessment 
The following paragraphs present the qualitative assessment of  the impact of each of the 
seven policy options. Next to a more general desc ription of the expected consequences of the 
implementation of each option, a detailed anal ysis is made of the type, magnitude and 
likelihood of impacts corresponding to each po licy option. These are presented for each 
option individually in Annex II. The table in which the assessment of all impacts of all 
options is compared is presente d at the end of this section.  
5.2. Identification of the relevant impacts 
The impact of each policy option will be assessed in relation to each of the seven specific 
objectives. These specific objectives have been derived from the general objectives. These in 
turn are drawn from the Framework Direct ive for electronic comm unications which is 
generally considered to be c ontributing greatly to the functio ning of electronic communication 
services and, in that way, to the overall de velopment of the EU economy. Since the specific 
objectives are directly linked to the general objectives from which they are derived, the 
assessment of the impacts at the specific object ive level will provide for the most detailed 
possible approach. Moreover, given the relation between the specific and general objectives, it 
is redundant to assess impacts of policy opti ons in relation to the general objectives.  
This can be illustrated by the following example:  the assessment of the extent to which a 
policy option (directly) contributes  to the specific objective 5 rega rding ensuring user choice 
and transparency also indicates how it will (indi rectly) contribute to the promotion of the 
interests of consumers and ensuring a high le vel of consumer protect ion for EU consumers 
(cf. General objective 3).  
The relationship between the list of impacts and the specific and general objectives is further 
illustrated below: 
 
EN 40   EN    GENERAL OBJECTIVES    
The general objectives contribute to the overall EU2020 
Strategy and DAE and relate to achieving a true Digital 
Single Market, in accordance with the Framework Directive: 
 
They consist o f:   
 -  Ensuring the development of a single cohe rent 
regulatory framework ;   
-  Stimulating and strengthening sustainable 
competition in the Digital Single Market; 
-  Promoting the interest of consumers and ensuring a 
high level of consumer protection 
  
SPECIFIC  OBJECTIVES   
Objective 1:    Reduce distortions between 
Member States  ;  
Objective 2:    Ensure an optimal level o f 
governance ;  
Objective 3:    Ensure that competitive market 
developments and  technological developments 
are not hindered  
Objective 4:    Strengthen the competitiveness 
of Europ  ean industry ;  
Objective 5:  Ensure user choice and 
transparency ;  
Objective 6: Ensure that prices are at levels 
reflecting underlying costs;  
Objective 7: Ensure that consumers can
 benefit from prices reflecting underlying costs 
 IMPACTS   Per specific objective:  
 Identification of economic, 
social and environmental 
impacts .  
  
 
Per impact: 
 Assessment provides 
indications of the extent to 
which the policy options  
specific objectives, and 
thus indirectly the general 
objectives are attained. IMPACTS   
 
Figure 4: Illustration of how the impacts di rectly relate to the specific and indirectly 
relate to the general objectives  
 
EN 41   EN It should be noted that the ‘B aseline Scenario’ against which th e impacts of all options will be 
assessed, consists of a situation in which the current state of affairs is maintained, thus 
corresponding to “Option 2a: Continuation “à l’identique” (with July 2011 Caps)”.  
The assessment of all of the impacts under each of the options is done by analysing the 
magnitude of the expected impact, as well as the likelihood that the impact  will actually occur 
as a result of the proposed policy option.  
5.3. Qualitative assessment of Op tion 1: No Regulation 
In the case of expiry of the cu rrent roaming Regulation, the curre nt lack of competition at the 
wholesale as well as at the retail level indica tes that prices will not decrease. They are much 
more likely to increase due to a reduced number of operators able to actually compete on the 
retail market. Indeed, market failures exposed in  the table presenting barriers to competition 
on the wholesale and on the retail markets (A nnex I) clearly express concerns about the 
current lack of competition in the roaming market.  
Removing the wholesale regulation would most probably lead to worse wholesale deals for 
small MNOs since terms of co mmercial agreements are linked with the volume of services 
that the MNOs can offer in return to the foreign MNO. Small MNOs would have no other 
choice (unless they join a group or alliance of mobile operators ) than either increasing their 
retail price to compensate their increasing whol esale charges or suffering margin squeeze if 
retail prices are maintained. 
MVNOs would still suffer from margin squeeze, and this situation could even become worse 
in the case of MVNOs buying roaming services from small MNOs which could themselves 
suffer from margin squeeze. 
In any case, removing regulation would result in a smaller number of providers fully able to 
compete on the retail market without margin squeeze. Big MNOs could still compete at the 
current retail prices but will have no incentive to decrease retail roaming prices since competitive pressure would be reduced. It is even more likely that big MNOs will increase retail prices in order to benefit from higher profits. 
In summary and referring to the objectives iden tified in Chapter 3, it can be concluded that 
under Option 1, there would be no development of a single coherent regulatory framework 
(cf. General Objective 1). Furthermore, sustainable competition in the Digital Single Market, in which all mobile operators  would participate, would not be stimulated and strengthened 
(cf. General Objective 2).. 
Finally, consumers will not benefit from truly competitive offers and will no longer be 
protected as is the case under th e current regulation. This would lead to reduced user choice 
and transparency (cf. Specific objective 5), pr ices that remain high above the underlying costs 
(cf. Specific Objective 6) and a significant risk that some categories of consumers would 
suffer from material increases of roam ing charges (cf. Specific Objective 7). 
5.4. Qualitative assessment of Option 2a: Co ntinuation à l’identique – current price 
caps 
 
EN 42   EN The baseline scenario implies that the problem of  high roaming charges as would continue to 
be dealt with in the same way as dealt w ith by Regulation 544/2009. It is clear that the 
baseline scenario would mainly focus on prev enting excessive retail tariffs while ensuring 
transparency of roaming charges and preventing ‘bill shock’ for data roaming services (cf. 
General objective 3 regarding pr omoting the interest of cons umers and ensuring a high level 
of consumer protection for all EU consumers). 
Furthermore, the intervention at EU level has led to more uniform rates being applied across 
Europe. Moreover, it was ensured that no measur es at the country level can be taken that 
would introduce negative cross-country ex ternalities (cf. General objective 1). 
Finally, the current regulatory approach does not deal in a structured way with a number of 
barriers at both the wholesale (inbound and resale ) market and retail market. By consequence, 
there is e.g. almost no transfer of reductions in wholesale charges, leading to retail tariffs 
below the maximum caps and there remain significant differences between wholesale rates available to MNOs and to MVNOs  (cf. General Objective 2). 
The effects of this option would be temporar y, as it would not tackle the underlying problem 
of the lack of competition in the roaming mark et. Therefore, a new regulatory intervention 
would be required after the period concerned, creating a significant regulatory uncertainty for 
the operators. 
5.5. Qualitative assessment of Op tion 2b: Extension of th e current methodology with 
adjusted annual price caps incl retail data  
The main difference between this scenario with adjusted annual price caps, compared to the 
baseline scenario, is better roam ing prices for all users. The ma in advantage of this approach 
is that it would lead to the achievement of the DA E target (general objective) as the retail caps 
established for 1 July 2015 (for voice, data a nd SMS) are approaching domestic level prices. 
This would also lead to a further strengtheni ng of the competitivene ss of European Industry 
(cf. Specific Objective 4), but would especially en sure that prices would be closer to levels 
reflecting underlying costs (cf. Specific Objective 6). Since retail prices would be set at a 
lower level than under the baseline  scenario, there could finally be  a slightly higher risk that 
the new technological developments would deve lop less since there is less room for the 
recuperation of initial investments (cf. Specific objective 3).  
There would be an improvement in the deve lopment of the single market since minimal 
uniform safeguard caps would be imposed on all Member States (cf. Specific Objective 1). 
Furthermore, imposing retail price caps fo r data could distort competitive market 
developments (cf. Specific objective 3).  
Furthermore, defining price caps for data could have a limited but positive effect on the 
choice between roaming tariff plans available to  consumers (cf. Specific objective 5) and on 
reducing the difference between roaming and domestic charges while somewhat increasing the transfer of price reductions at the wholesale level to the reta il level (cf. Specific Objective 
6). 
 
EN 43   EN The effects of this option would be temporar y, as it would not tackle the underlying problem 
of the lack of competition in the roaming mark et. Therefore, a new regulatory intervention 
would be required after the period concerned, creating a significant regulatory uncertainty for 
the operators. 
5.6. Qualitative assessment of Option  2c: Roam like at Home  
Roam like at home is more consumer-friendly th an roam like a local (cf. Specific objective 5) 
since the customer's experience of bill shock in using services abroad is minimised. Subject to the size of the mark-up, consumers would face charges for roaming services closer to 
domestic levels. The “roaming price” would no longer be a material consumer issue. A 
"welcome SMS” could be retained to ensure  tariff transparency, especially where the 
customer has a bundled or "un limited” domestic tariff, given that a small payment (roaming 
supplement) would apply when abroad. While doi ng very little to prom ote competition (cf. 
Specific objective 3) in the provision of roaming services, the method ensures that the benefits 
of domestic retail competition are automatically  passed through to roaming users (cf. Specific 
objective 7).  
BEREC estimates that, for 2012, the value of th e mark-up might well need to be around 10c 
per minute for outgoing voice calls in order to a void margin squeezes. While this would lead 
to lower prices than are typical at present for some consumer segments, overall the option 
would lose all its advantages compared to Eurotariff price ca ps (assuming European average 
prices are the same in each case), as regards bringing roaming prices closer to domestic levels. (cf. Specific objective 6).  
5.7. Qualitative assessment of Op tion 3a: Unbundling option 
From the demand perspective, it is expected  that the unbundling option could have a positive 
impact on the competitiveness of European Industry (cf. Specific Objective 4) as the 
decoupling of the roaming servi ces would further increase the bargaining power of this high 
usage segment. Furthermore, all users could benefit from increased choice regarding the 
applicable tariff plan (cf. Specific Objective 5)  since each customer would have access to all 
tariff plans of all national operators. Unbundli ng would bring about a consistent regulatory 
approach and therefore would help to a void distortions between Member States. 
Since the unbundling option focuses on the retail market, Option 3a is not expected to 
improve the market conditions at the wholes ale level (cf. Specific Objective 3) unless 
combined with Option 3b. There is a slight positive effect of lower wholesale caps compared to the baseline scenario and the unbundling is  expected to lead to the development of 
additional retail services, but enabling this re quires however tackling a number of technical 
challenges on the compliance and administ rative cost related to this option.  
Depending on the interest of consumers to have a different provider of their roaming services 
and the willingness of domestic op erators to compete against e ach other (e.g. in a specific 
market niche), the unbundling option could make ope rators reduce their retail charges in order 
to retain existing clients or to attract new c lients. As such, Option 3a would thus reduce the 
difference between the roaming charges and th e domestic charges and underlying costs (cf. 
Specific Objective 6). Despite the significant inelasticity of  demand for bundled retail voice 
and SMS roaming service observed today, the competitive offer of such services separately 
 
EN 44   EN from other parts of the mobile bundle may allow the consumers to easily compare prices and, 
in case of significant differences, switch to alte rnative roaming suppliers. Moreover, the data 
used for this impact assessment suggests that the demand for data roaming services is more 
elastic. Taken this into account together with  the forecasted increase in data traffic, 
unbundling has potential to enhance retail competition si gnificantly in the medium term.  
Moreover, it should be considered that also consumers who do not switc h towards alternative 
more advantageous roaming offers should normally  benefit from the reduction of prices to be 
expected due to the competitive pressure created by such offers. In this respect, it is again 
important to note that the market for data roam ing services exhibits more dynamism than the 
corresponding markets for voice and SMS. Given that data traffi c is expected to increase 
strongly in the future it is expe cted that this will also have a bearing on the markets for voice 
and SMS (at least for the strongly growing nu mber of smart-phone users). However it will 
take some time to implement this solution whic h suggests that the continuation of safeguard 
retail price caps may be necessary for a period of time. As indicate d, decoupling alone may 
not create the conditions for new entry to the roaming market. It may therefore need to be 
accompanied by access obligations (see Option 3b below) which facilitate the entry of dynamic new players. 
5.8. Qualitative assessment of option 3b: Improved wholesale access measures  
A consistent regulatory approach to wholesale access would help to a void distortions between 
Member States Since the improved wholesale ma rket conditions could result in a situation 
whereby M(V)NOs request access to foreign MNOs in order to be hosted as MNOs, this 
could lead to the development of pan-European  virtual networks by these providers and could 
enable them to offer the same roaming tariff plans to customers in different countries. The 
chances of this happening however are increased si gnificantly if this option is combined with 
Option 3a. 
 
EN 45   EN It is expected that Option 3b would have a po sitive impact on competitive market conditions 
(cf. Specific Objective 3). The improved ac cess conditions for MVNOs would clearly 
increase the availability of wholesale roaming se rvices at the same conditions for all operators 
(at least for the “unbalanced” part of traffic)  and reduce the risk of price squeeze via the 
availability of cost based wholesale services55. The changes at the whol esale level would most 
probably also introduce more competition in the business segment and as such strengthen the 
competitiveness of European industry (cf. Specifi c Objective 4). This effect was estimated as 
less important than under Option 3a since the roaming offers w ould still remain bundled with 
domestic mobile services. Mo re precisely, the importance of  competitive pressure would 
depend on the extent to which MVNOs would succeed  in increasing their market share in the 
business sector and the likelihood that businesses would select an other provider for all mobile 
services, triggered by the possibility of obtaining lower roaming rates.  
Furthermore, Option 3b is expect ed to slightly increase user choice and transparency (cf. 
Specific Objective 5), but to a lesser exte nt than the unbundling option. On the one hand, 
there would indeed be a larger number of ope rators that are actua lly capable of providing 
attractive roaming tariff plans. On the other hand, that fact that roaming offers would still be 
bundled with domestic services could make the tariff options less transparent and require 
customers to be willing to change the pr ovider for all of their mobile services.  
The extent to which the lower prices at the w holesale level, available to all providers (cf. 
Specific Objective 6), will actually be transfe rred to the retail level will depend on the 
likelihood that consumers will indeed be interest ed in a better deal for roaming services as 
well as on their attitude towards the barrier of needing to switch to another provider for all 
mobile services at once. Sin ce MVNOs would have more room for lowering the retail charges 
compared to Option 3a, a more significant reduction of the difference between the roaming and domestic charges could possibly be reali zed. Again, the significant inelasticity of demand 
for retail voice and SMS roaming service observed today is likely to reduce the efficiency of 
this regulatory option whereas the more elastic demand for data roaming services may indeed 
make consumers adapt their behavior and cons ider better roaming charges as a trigger for 
changing to another roaming provider. 
Finally, it is questionable whether all customers will actually benefit from more advantageous 
roaming offers. However, Specif ic Objective 7 would be satisfi ed if customers could benefit 
form such offers. Moreover, it should be considered that consumers who do not switch 
towards alternative more adva ntageous roaming offers should normally benefit from the 
reduction of prices to be expect ed due to the competitive pressure created by such offers. The 
risk that some categories of us ers would have a limited benefit is  expected to be higher in the 
case where there is no unbundling as low usage c onsumers would be lock ed into their bundled 
mobile offers. The chances of boosting competition are increased significantly if this option is 
combined with retail structural  obligations (Option 3a).  
                                                
 
55 As MVNOs margin is currently very small, it could be  expected that the availability of cost based tariff 
will represent a significant reduction, introducing more competitive pressure in the retail market. 
 
EN 46   EN 5.9. Qualitative assessment of Option 3c: Decoupling plus MVNO access plus 
safeguard price caps 
Decoupling (option 3a) in combination with enha nced access obligations (option 3b) is likely 
to have a significant impact on competition in the roaming mark et (cf. Specific Objectives 3 
and 4), although this solution will take time to implement. This stru ctured solution would 
avoid distortions between Member States by ensuring a consistent regulatory approach 
thereby contributing to the development of the Si ngle Market. Essentially it  is considered that 
for decoupling to be fully effective it would ne ed to be combined with an access obligation 
which will facilitate market entry by new or existing players including pan-European roaming 
service providers. However given that this solu tion will take time to im plement there will be a 
need to ensure continued consumer protection against excessive roaming charges by maintaining safeguard caps for all services at an appropriate level for a period of time. This 
combination of obligations should lead to the possibility for a sustainable competitive solution 
to the roaming without the need for long terms price regulation.  
5.10. Qualitative assessment of Option 3d: Spotmarket 
Finally, the creation of a spot ma rket for wholesale roaming servic es would first of all provide 
no guarantee that more uniform prices across the EU would be obtained or that roaming prices 
would be aligned to the domestic charges of the different Member States (cf. Specific 
Objective 1).  
Moving towards a system in which roaming service would be traded on a spot market to 
which all M(V)NO would have access, would cl early increase the availability of these 
services under the same conditions for all opera tors, thereby also reducing the risk of price 
squeezes (cf. Specific objective 3). However, the whole structure of the market would be 
shaken up since all competitively and commercia lly grown alliances wo uld be broken down. 
This structure would be replaced by a new structure which would take a lot of effort and time to put in place, first of  all to ensure trading of existing services and technologies today but 
also it would also need to come up with appr oved EU wide agreements  on how to deal with 
new services (e.g. specific m achine-to-machine services, LTE
56 based services…) before 
these can be traded on the spot market. These agreements would possibly imply a delay in commercializing these technologies  between EU Member States. 
It is not expected that this drastic change in the roaming market struct ure would be beneficial 
to the European Industry (cf. Specific objec tive 4) since it would be uncertain if the 
advantageous offers by multi-country alliances w ould still be possible once all of the national 
partners of these alliances would need to pass via the spot mark et. The spot market would also 
definitely make it much more difficult for operators to provide pan-European mobile offers since the underlying wholesale cond itions would become too variable. 
Furthermore, the impact on user choice and tr ansparency (cf. Specific objective 5) and the 
extent to which retail prices w ould better reflect underlying costs (cf. Specific objective 6) is 
assessed to be moderately positive and comparab le to the impact that the improved wholesale 
access measures could have (cf. Option 3c). 
                                                
 
56 Long term evolution, the latest standard in the mobile network technology 
 
EN 47   EN Finally, establishing a spot market, will not ensure that all categories of users would be able to 
benefit from price better reflecting the underlyi ng costs (cf. Specific Objective 7) and would 
not bring competition at retail level.  
Summary of the qualitative assessment of all options – per objective  
 
 
Option 1 
No Re gulation 
Option 2a 
Option 2b 
Annually adjusted caps
Option 2c 
Roam like at home/ Local
Option 3a 
Decoupling
Option 3b 
Improved wholesale access
conditions
Option 3c 
3a + 3b + safeguard caps
Option 3d 
Ensuring the development of a single coherent regulatory framework 
Objective 1: Reduce distortions between member states 
Total 
Objective 1 -8 0 +3 +1 +5 +2 +8 0 
Objective 2: Ensure an op timal level of governance 
Total 
Objective 2 -2 0 0 0 +0 0 0 0 
Total -10 0 +3 +1 +5 +2 +8 0 
Stimulating and strengthening sustainable co mpetition in the Digital single market 
Objective 3: Ensure that co mpetitive market conditions are stimulated and that 
technological developments are not hindered 
Total 
Objective 3 -14 0 -1 -1 +6 +10 +12 -3 
Objective 4: Strengthen the compet itiveness of European Industry  
Total 
Objective 4 -3 0 +4 +6 +3 +3 +5 0 
Total -17 0 +3 +5 +9 +13 +17 -3 
Promoting the interest of consumers and ensu ring a high level of consumer protection 
for all EU consumers 
Objective 5: Ensure user choice and transparency 
 
EN 48   EN  
 
Option 1 
No Re gulation 
Option 2a 
Option 2b 
Annually adjusted caps
Option 2c 
Roam like at home/ Local
Option 3a 
Decoupling
Option 3b 
Improved wholesale access
conditions
Option 3c 
3a + 3b + safeguard caps
Option 3d 
Total 
Objective 5 -8 0 +3 +1 +6 +2 +10 +2 
Objective 6: Ensure that prices are at levels  reflecting underlying  costs (as they would 
result from competitive market forces) 
Total 
Objective 6 -10 0 +8 +4 +2 +2 +8 +2 
Objective 7: Ensure that all categories of co nsumers can benefit from prices reflecting 
underlying costs 
Total 
Objective 7 -12 0 +3 0 +0 +0 +1 0 
Total  -30 0 +14 +5 +8 +5 +19 +4 
Overall total  -57 0 +20 +11 +22 +19 +44 1 
Table 9: Summary of score per option and per objective57 
In summary, it can be concluded that Option 1 (no regulation) runs  the risk of a return to high 
roaming charges and consequently scores least be st for all of the three general objectives. The 
more positive assessment of Option 2b compared to the baseline scenario is fully due to the fact that better prices would be secured for customers of all segments (industry as well as consumers) and is further strengthened by the inclusion of caps for retail data services. 
However this approach does not address the underlying problems and is likely to mean long 
term price regulation. 
The structural approaches outlined in Options 3a and 3b will take significant time to 
implement but together hold the promise of a sustainable long term solution. The combination 
of these options, with transitional safeguard price caps (Option 3c), rates very positively against on all objectives. Finally, Option 3d is not  expected to have a very positive overall 
impact.  
On the basis of the above assessment it is pr oposed to carry out quantitative assessment on 
Option 1, Option 2a, Option 2b and Option 3c. 
                                                
 
57 Please see Annex II for the detailed assessment and explanation of the scoring mechanism. 
 
EN 49   EN 5.11. Quantitative assessment  
For the quantitative assessment of the policy options, a distinction is made between the 
economic impact (social welfare), and the compliance  and administrative  cost  of 
implementing the specific options. Estimates fo r the social welfare and these costs are 
presented in detail in the following sections. In  order to facilitate comparison between the 
options on a quantitative basis, they are comp ared over a four year period commencing on 1 
July 2012. After mid-2015 it is assumed that the effects of competition will have developed. Furthermore it is envisaged that competition will also be effective at the wholesale level meaning that these caps should have no material effect in economic terms. 
5.12. Assessment of the economic impa ct (Social welfare impact) 
For the assessment of the economic impact, a detailed economic mode l has been developed. 
The aim of this model is the de termination in the aggregate and for each country the effect of 
different regulatory options on roaming quantities
58 and revenues, consumer and producer 
surplus, and total social welfare. An underlyi ng roaming market model analyses how roaming 
wholesale and / or retail prices are expected to evolve due to market forces, e.g. without 
regulation.  
The paragraphs below, firstly, present the results of the economic  model estimating the 
impact, measured as the variat ion of producer and consumer surplus against the baseline 
scenario, of each regulatory option. Secondly, th is economic impact (social welfare) is 
assessed against total sector tu rnover and gross operating surplus59 of the electronic 
communications sector to put the figures into perspective. Finally, the estimated distribution 
of this economic impact under each of the po licy options defined above will be discussed. 
5.13. Estimation of the economic impact  under each option in the EU 27 
An economic model has been developed for estimating the economic impact (social welfare)  
of each regulatory option in the EU 27. This social welfare  can very briefly be described as 
the sum of the producer surplus (or industr y profits) and the consumer surplus.  
The consumer surplus can be defined as “the amount that consumers are willing to pay for a 
given good or service minus the amount they are required to pay”60. For a single good, it can 
be measured by the area of the triangle below the demand curve and above the observed price. 
In reference to the industry profit, “ the amount paid to the sellers above and beyond the 
required minimum ”61 to bring forth production, it can be  determined by the area below the 
observed prices and above the cost func tion (see below the comparison between two 
hypothetical scenarios). 
                                                 
58 Demand has been calibrated with the country-wise retail and wholesale roaming data available from 
BEREC. 
59 Cf. Code 12 170 of Commission Regulation (EC) N° 2007/98 of 17 December 1998 concerning the 
definitions of characteristics for structural business statistics. 
60 Fundamentals of Managerial Economics , Mark Hirschey - 2009 
61 Idem 
 
EN 50   EN 
Demand
QP
Q'P‘A
B
CostsConsumer Surplus
Producer Surplus
QP
DC
P‘‘
Q''Consumer Surplus
Producer Surplus
Demand
Costs
QP
Q'' Q'P‘
P‘‘Consumer Surplus
Producer Surplus
Demand
CostsSocial Welfare Gain +Baseline Scenario Target Scenario
Impact Assessment
 
Figure 5: Illustration of how the economic im pact (social welfare) has been determined 
In this sense, this impact assessment aims at estimating the social welfare gains resulting from 
the potential implementation of each regulatory option, that is, the sum of the variations of 
consumer surplus and industry profits. Accord ing to the graphs above, the variation of 
consumer surplus will be derived from (C-A) and the variation of industry profits from (D-B).  
The calculation of the social welf are is structured in 6 steps: 
• Step 1. Determination of the relevant parameters for the Status Quo of the 
International Roaming market. 
• Step 2.  Estimation of the demand parameters. 
• Step 3 . Determination of the relevant prices  by service for each regulatory option. 
• Step 4 . Estimation of the quantities (traffic volume) by service for each regulatory 
option. 
• Step 5 . Estimation of the revenues and costs by service for each regulatory option 
over the relevant period. 
• Step 6 . Estimation of the industry profits (o r producer surplus), consumer surplus 
and social welfare for each regulat ory option over the relevant period. 
 
EN 51   EN 5.14. Estimation of the economic im pact under shortlisted options 62 
The estimates of the accumulated economic imp act, for the price caps of the shortlisted 
options (plus Option 1) listed in  the Table below, over the re levant period (2012-2014) have 
the following values at EU level as measured  against the baseline scenario (Option 2a): 
Option 1 Option 2.a. Option 2.b. Option 3.c. 
  No 
Regulation Baseline 
Scenario Adjusted price 
caps incl. retail 
data Unbundling + 
Access + 
safeguard caps
Consumer surplus (m €) -18.604,64 ----- 6.323,50 3.656,7363 
Total profits (m €) 4.998,48 ----- -4.901,99 -2.373,1964 
Welfare (m €) -13.606,16 ----- 1.421,51 1.283,54 
Table 10: Estimated economic impact (accumulated over the relevant period) for each 
regulatory option 
Option 1 has a significant negative impact. Fo llowing the results presented above, the option 
of de-regulating tariffs is inadequate, due to the current lack of competition at both the 
wholesale and the retail levels. The market equi librium, driven freely by market forces, would 
result in a significant increase in pric es and a high social welfare loss.  
                                                 
62 In analysing the options we assume that the policy measures would be applied homogeneously across 
countries. Therefore they will be assessed at the EU  level, though the differences between countries are 
in some cases significant. 
63 The consumer welfare impacts calculated for this option constitute a conservative minimum and the 
actual welfare benefits are likely be higher (takin g into account the benefits of increased competition 
which will arise from this option). 
64 The implementation costs of the structural solutions have not been factored in these figures. It is 
estimated by the industry that the implementation of unbundling would cost around EUR 300 million at 
the industry level compared with the annual roaming revenue of around EUR 5 billion and with the total 
annual revenue of around EUR 164 billion. It is important to note that this is one-off cost and is 
necessary to address the structural  problems in the roaming market. Unbundling provides a long term 
solution and therefore the implementation costs should be spread over a longer time horizon. For 
instance, if the cost is di stributed over the ten year period, which is the proposed duration of the revised 
Regulation, the (nominal) annual cost for industry would be EUR 30 million. If this cost is incorporated 
into the producer surplus figures (table 10, p.48), the overall welfare of options 3c will be reduced, but 
only marginally (approximately from 1.284 m € to 1.193 m €). 
 
EN 52   EN On the other hand, options 2b and 3c involve positive and comparable gains of social welfare. 
These options both foresee that consumers woul d benefit from lower pr ices for all roaming 
services. While option 3c is expected to have also an effect on prices mainly due to the 
increased competition, both options foresee a reta il data price-cap (glide-path towards cost 
oriented level), in addition to the existing price-cap for the rest of services, namely voice and SMS.  
Regarding the differences among these options, it should be mentioned that Option 3c is 
based on a competition enhancing structural approach, allowing a less strict retail price regulation, leaving space for market forces to determine prices. The consumer welfare 
calculation above is based only on the safeguard caps foreseen under this option and does not 
take into account the downward pricing effect arising from competition enhancing structural 
measures. On the other hand, it should mentioned that the welfare estimates above do not take into account the implementation costs (see sect ion 5.15) which are estimated by the industry 
to be around EUR 300 million at the industry level.  This represents less than 10% of annual 
roaming revenues and 0.2% of the total annual revenue. The costs will be one-off but at the 
same time the unbundling provides a long term solution that would bring benefits over a 
longer time horizon. The general finding of small elasticities for roami ng services, except for 
retail data, implies that the effects on total welf are are small – and therefore the differences 
between these options are also small, since reduc tions in prices only imply that consumers pay 
less for roughly the same consump tion - that is, create a transf er from firms to consumers. 
However, this may change due to the expected growth of data, as lower data roaming prices 
are expected to lead to hi gher data roaming consumption. 
However, it can be observed that while achieving similar levels of social welfare gain, these 
options might be considered as less distortionary  since they produce less  variation in producer 
and consumer surplus.  
It should also be considered that the positiv e effects of option 3c would remain over time, 
while the effects of option 2b would disappear if no new price cap were introduced after the 
period concerned. 
5.15. Assessment of the costs of implementing  the roaming regulat ion options (incl. 
feasibility) 
The table below presents an overview of the co st of implementing the different policy options 
assessed. These “costs of managing the system ” comprise both administrative costs (i.e. 
related to ‘ costs incurred by enterprises, the volunt ary sector, public aut horities and citizens 
in meeting legal obligations to  provide information on their ac tion or production, either to 
public authorities or to private parties’
65) as well as some substant ive compliance costs, e.g. 
for the implementation of the organi zation and management of the option. 
For the assessment  of the cost of implementing the ro aming regulation, the focus is both on 
comparing the cost of implementation between options and providing a basis for comparison 
with the outcome of the economic model. 
                                                 
65 See http://ec.europa.eu/governance/impact/docs/key_docs/sec_2005_0791_anx_en.pdf) 
 
EN 53   EN Option 1 
No Regulation 
 Option 2 
Caps of 2012 - 
Baseline Option 2b 
Annually adjusted 
caps Option 3c 
Unbundling + 
Access + safeguard 
caps 
ADMINISTRATIVE COSTS  
For mobile operators 
No costs Same cost for 
reporting as under current Regulation  Same cost for 
reporting as under current Regulation. Additional cost for 
specific system changes and billing arrangements. 
For NRAs/BEREC 
No costs Same cost for 
monitoring as under current Regulation Same cost for 
monitoring as under current Regulation Additional 
implementation costs plus extra monitoring will be required in order to measure if these structural options are indeed delivering in terms of bringing down the retail prices below the safeguard caps. 
For Consumers  
More effort is 
required if transparency and bill shock measures no longer apply. No specific costs No specific costs Benefiting from 
Option 3c implies more research costs and dealing with additional invoices. 
COMPLIANCE COSTS  
FOR MOBILE OPERATORS  
No costs No costs Need to update 
wholesale agreements. 
  Need to update and 
extend wholesale agreements. 
A number of 
technical, security and routing issues to deal with. 
 
EN 54   EN Option 1 
No Regulation 
 Option 2 
Caps of 2012 - 
Baseline Option 2b 
Annually adjusted 
caps Option 3c 
Unbundling + 
Access + safeguard 
caps 
FEASIBILITY  
- 
   The impact assessment for the current 
regulation confirmed limited additional burden compared to previous market analysis approach. 
 Complex and time 
required to implement. 
In terms of administrative costs it is consider ed that Option 1, 2a and 2b would not result in 
significant incremental costs si nce these either involve no  regulation (although continued 
monitoring would be required) or  the continuation of the status quo - the costs of compliance 
and the administrative costs are the same as those already bei ng incurred. Industry has already 
incurred the costs of compliance (e.g. with da ta collection and implem entation of the cut-off 
limit for data roaming). Option 3c will take time to implement since there are a large number of technical, security and r outing issues to deal with. Th e practical implementation would 
involves issues such as implementation of mu lti IMSI SIM cards with an EU-wide roaming 
authentication algorithm, special  signalling protocol to re route incoming calls, adapting 
billing procedures. First there will have to be  agreement at EU leve l on the details of how 
these regulatory obligations will work. Th is will involve the Commission, BEREC and 
industry working together possi bly leading to the need for guidelines by the Commission. The 
involvement of standardization bodies may be required. Secondly there will be an 
implementation phase whereby operators will make the necessary adjustment to their systems to ensure compliance. On the other hand, once the structural solution is in place the costs of 
monitoring and compliance are expected to decr ease. In contrast Option 2b does not offer a 
long term solution and is likely to le ad to prolonged price regulation.  
5.16. Overall cost-benefit assessment of the selected policy options 
Based on the detailed qualitative and quantitat ive assessment outlined in the previous 
sections, the tables below pres ent a ranking of policy options: 
Qualitative assessment  
 
EN 55   EN  
 
 
 Option 1 
No Regulation Option 2a 
Caps of 2012 Option 2b 
Annually adjusted 
caps Option 3c 
3a + 3b + safeguard 
caps 
Ensuring the development of a single coherent regulatory framework 
Total -10 0 +3 +8 
Stimulating and strengthening sustainable co mpetition in the Digital single market 
Total -17 0 +3 +17 
Promoting the interest of consumers and ensuring  a high level of consumer protection for 
all EU consumers 
Total  -30 0 +14 +19 
Overall 
total  -57 0 +20 +44 
Ranking  4 3 2 1 
Quantitative assessment – social welfare model  
 
 Option 1 
No Regulation Option 2a 
Caps of 2012 Option 2b 
Annually adjusted 
caps Option 3c 
3a + 3b + safeguard 
caps 
Consumer surplus 
Total (m EUR) -18.604,64 - 6.323,50 3.656,73 
Total Profits 
Total (m EUR) 4.998,48 - -4.901,99 -2.373,19 
Welfare 
Total (m EUR) -13,606,16 - 1.421,51 1.283,54 
 
EN 56   EN  
 Option 1 
No Regulation Option 2a 
Caps of 2012 Option 2b 
Annually adjusted 
caps Option 3c 
3a + 3b + safeguard 
caps 
Consumer surplus 
Ranking  3 - 2 1 
Though the differences among options 2b  and 3C are relatively small, the first place in the 
ranking from an economic impact point of view is therefore given to the option that is the 
least distortionary. Also as mentioned in prev ious chapters, the consumer welfare calculation 
for option 3c is based only on the safeguard caps  foreseen under this op tion and does not take 
into account the downward pricing effect aris ing from competition enhancing structural 
measures. 
Quantitative assessment – Cost of implementation 
    Option 1 
No Regulation Option 2a 
Caps of 2012 Option 2b 
Annually adjusted 
caps Option 3c 
3a + 3b + safeguard 
caps 
Administrative costs 
 1 2 2 3 
Compliance costs 
 1 2 3 4 
Feasibility 
 1 2 2 3 
Ranking  1 2 3 4 
6. CONCLUSION  
When measured on a qualitative and quantita tive basis Option 2b and 3c both demonstrate 
positive social welfare. Option 2b (price capping) performs marginally better from a consumer protection point of view, as it foresees a direct incisive intervention at retail level, 
ensuring by regulation that - ir respective of market conditions - all consumers would at any 
moment pay lower prices. On th e other hand Options 3c offers  the possibility  of enhanced 
competition for roaming services, which is exp ected to lower prices for consumers, while 
keeping safeguard price caps for a certain period. By increasing competition through structural measures this option would lead to long-lasting effects and a more stable regulatory 
 
EN 57   EN framework over a longer period of time. Option 2b would not introduce pro-competitive 
structural changes and would pr obably need to be followed by new regulated retail prices 
after 2015. It is therefore proposed to adopt a revised Roaming Regulation on the basis of 
Option 3c for a period of 10 years with repor ts on its functioning by the Commission every 2 
years.  
7. EVALUATION AND MONITORING  
Extension of the mobile roaming regulation will  continue to be monitored very closely both 
by the individual NRAs, BEREC and the Comm ission. Already under the current roaming 
regulation, NRAs were required to collect data  not only on retail and wholesale voice tariffs 
but also on SMS charges and data roaming ch arges. This data collection exercise went 
smoothly and did not create any si gnificant additional administra tive burden compared to the 
situation before the regulatory in tervention. This was due to the f act that NRAs had already in 
place the necessary basic tools to gather and analyse information since market data on roaming was already assembled under Article 5 of  the Framework Directive. Data collected 
by the NRAs and the Commission and presente d collectively by the BEREC provided a very 
useful and timely input for ev aluation of the effec tiveness of the current  regulation and for 
assessment of the policy options  for its possible extension.  
The Commission services therefore consider th at data collection of similar scope and 
frequency should continue to be carried out  also during the time span of the proposed 
extension. NRAs will be asked to collect data on retail and wholesale voice, SMS and data 
roaming services every six months. They will also regularly report to  the Commission on the 
progress of implementation of the extended Roaming Regulation in individual Member 
States. The Commission can suppl ement the national regulators’ data collection by its own ad 
hoc studies or surveys on main market and technical developments, charging systems, 
contract conditions, business vs. residential custom ers' tariffs, etc. in order to get a more 
complete picture of the actual impact of the extended regulati on once it is implemented. At 
the same time, the Commission will continue to m onitor the entire mobile market as such, as 
part of its regular monitoring of the impl ementation of the regulatory framework for 
electronic communications. This monitoring exer cise as well as various studies on specific 
issues in electronic communications market s commissioned regularly by the Commission will 
provide a sufficiently broad overview of th e context in which the Roaming Regulation 
operates and will also inform other Commission services in the next review exercise.  
In relation to enforcement and compliance it is envisaged that, as in the case of the current 
Regulation, NRAs will continue to  be charged with the tasks of monitoring and supervising 
compliance and may intervene on their own initiative to ensure compliance in accordance with the terms of the amended Regulation. 
With respect to evaluation of the extended Roaming Regulation, it is foreseen that the 
Commission would review, taking into the acc ount the opinion of BEREC, and report to 
Council and Parliament in 2015. Thereafter the Commission will  carry out regular reports 
every 2 years before the Regulation expires in 2022. 
 
EN 58   EN ANNEX  I 
1. TECHNOLOGICAL DEVELOPMENTS RELATED TO ROAMING  
Regarding technological developmen ts related to roaming, the ne xt sections mainly focus on 
the comparison of possible substitutes that c ould provide for less expensive solutions for 
consumers when using voice, SMS or data mobile services abroad. The extent to which these 
are actually also perceived as a substitute  by consumers, will furthermore impact the 
probability that these substitutes have a compe titive pressure on the roaming prices. A second 
part briefly points out what th e possible substitution is between  services within the roaming 
market. After that, the most recent evolutions in possibilities regarding traffic steering are 
presented and finally, an overview is given of how the roaming market could be affected by 
recent innovations.  
1.1. Alternatives to roaming services  
The possible alternatives have been explicitly limited to mobile  alternatives to roaming as, 
according to a 2010 OECD’s report on international mobile roaming services “ The preference 
of consumers for roaming services  suggests that the possibility of using the mobile phone as 
they do at home is very much appreciated ”66. Some studies67 had also already shown that 
solutions such as public phones, hotel telephones, call shops are not regarded by end-users as 
good substitutes to international roaming. The main  reasons are again the lack of mobility, as 
well as the fact that the end- user cannot receive incoming calls  on his usual number (for voice 
and SMS) and the high cost of the alternative service. Note that given the increased demand 
for data services and the possi ble technological developments in  this area (compared to voice 
and SMS which are regarded as “mature markets68”), alternatives requir ing a laptop have also 
been considered. 
In order to assess and to co mpare possible alternatives to roaming, the 5 following criteria 
have been considered: 
1. Mobility : refers to the possibility of being able to move  while using voice, SMS or 
data services and  not being constrained to go to specific places for using them; 
2. Availability : refers to the availability of the altern ative itself as well as of the technical 
coverage voice, SMS and data services; 
3. Accessibility : relates to the possibility of  being reached  at any time and at any location 
on the same phone number; 
4. Affordability : concerns the investment (one-off co st) and the cost of using (recurring 
cost depending on the volume of servi ces) for using the alternative services; 
                                                 
66 “ International mobile roaming servi ces: Analysis and policy recommendations ”, OECD, March 2010, 
P.31  
67 Examples OECD 2009 and 2010 
68 See e.g. “International Mobile Roaming Regulation” – BEREC Repo rt – December 2010 (pag 45) and 
graphs in the previous section presenting the respective evolution in volume of voice, SMS and data 
retail roaming traffic. 
 
EN 59   EN 5. Ease of use : refers to the steps required /possibl e difficulties before being able to use 
the service as well as the ease of the actual use of the alternative service. 
The following table presents the comparison of different possible altern atives to roaming, 
based on their assessment according to the five above-mentioned criteria. The notation is used for assessing to what extent each  of the criteria is respected:  
+++ Very good 
++ Good 
+ Rather good 
- Rather bad 
- - Bad 
- - - Very bad 
 
EN 60   EN  Mobility Availability Accessibility Affordability Ease of use 
Local SIM card  
Without dual SIM 
card handset +++ 
The consumer can use 
the local SIM card throughout the territory covered by the local chosen provider’s network. -  
The user needs to 
switch from one SIM card to another when he wants to make a local call or he/she needs to buy a second (unblocked) handset for the local SIM card. 
Some traditional 
handsets (mainly those subsided by MNO) are blocked for other SIM card.  - -  
If the user has only one 
handset, he is not reachable at his home number when he switches to the local SIM card. + 
The consumers can 
benefit from local tariffs for their outgoing local calls. 
 For the incoming 
calls however, they are most likely to be called on their home number which leads to the payment of roaming charges. - - 
The user needs to 
deal with an additional phone number which has limited validity duration. 
 The consumer incurs 
research efforts to find a services provider in the visited country. 
 
 
EN 61   EN With dual SIM card 
handset active at the same time + 
Dual SIM handsets 
are never subsided by MNO because they have no incentive to cannibalize their roaming revenue; consumers are 
therefore 
discouraged from acquiring them. 
 Once the handset is 
acquired, the user benefits from high availability of voice, SMS and data services.  +++ 
A dual SIM handset 
allows the customer to keep keeping the home and the local numbers active at the same time. The user can be reached at his home number and can make 
calls with the local SIM 
card without any manipulation. - - 
Idem as above, but 
the user needs to buy dual handset phone.  
 In Europe the market 
for dual SIM handset is not yet much developed, even less 
for 3G handsets. The 
cost of the handset will be much higher than for a traditional handset. 
 
 
EN 62   EN  Mobility Availability Accessibility Affordability Ease of use 
VoIP 
Over Wi-Fi - - - 
The user needs to go 
to specific places (such as pubs, hotel, …) to access a Wi-Fi connection. - - 
Wi-Fi hotspots are 
not available everywhere and have a very limited coverage. This can have an influence on the quality of the connection if the user is too far from the modem. ++ 
This alternative is 
really cheap for outgoing calls if free Wi-Fi hotspots are available but the consumer has still to pay roaming charges for incoming calls on his home number. 
Over WiMax - 
Compared to VoIP 
over Wi-Fi, mobility is higher since coverage is larger. However, WiMax coverage is generally limited to the size of a city. - - 
Initially introduced to 
cover areas where installing DSL would have been too costly, WiMax technology is available in a limited number of cities. - - 
The user cannot be 
reached at any time on his home number, he can however be called on his Skype name. + 
Idem as above but the 
user needs to have a subscription to the WiMax service.  - - 
Making calls through 
VoIP supposes the use of an Internet connection. The consumer therefore needs a laptop or a smartphone to be able to enjoy this alternative to roaming. 
 Some MNOs have 
blocked the access to software allowing VoIP (such as Skype) or are charging extra fees when the consumer is using it.  
 Finally, using 
software to make calls via an internet connection could be considered as complex for someone who is not used to. 
 
EN 63   EN  Mobility Availability Accessibility Affordability Ease of use 
Global or regional SIM card  
Multi-IMSI SIM 
card  
 (i.e. different 
numbers (from different countries) are related to the same SIM card) +++ 
The user can use the 
multi-ISMI SIM card everywhere (preferably in countries for which the user has a domestic number in the case of regional SIM card) + 
Some regional or 
global SIM card offers are available in the EU but there are not very much known by the consumers.  
 The multi-IMSI SIM 
card allows access to voice, SMS and data services as a traditional SIM card. +++ 
The consumer can at 
any time be reached on each of the different numbers. ++ 
Multi-IMSI SIM 
cards allow reducing sharply roaming charges: the user pays a local rate to call within the country in which he is located and an internatio-nal rate to call abroad. As incoming calls are auto-matically forwarded to the local number of the country the user stays in, they are free or at a reduced tariff.  - - - 
These offers are not 
very common in the EU (large part of global SIM card uses UK and US numbers). There is a lack of brand recognition.  
 The consumer has to 
deal with different numbers. He must give the right number to the right person. 
 The technique of call 
back is quite sophisticated and 
could be difficult to
 
EN 64   EN Call back69 +++ 
This global SIM card 
can be used everywhere. + 
A lot of offers for 
international SIM card are available and can be ordered on-line for example.  
 With a global SIM 
card, the availability 
of voice, SMS and 
data services is high.  + 
Incoming calls on the 
home number can be forwarded to the other number if customers ask for it. This option is generally charged to the user. ++ 
This can reduce the 
roaming charges since for incoming calls the user does not pay to receive calls on the foreign/international number. He pays if he 
wants to forward the 
calls received on his home number (cheaper than roaming charges). For outgoing calls, the rate for using the call back system is also usually lower than roaming. 
                                                 
69 The call back system works with a SIM card and a number from a foreign country (such as Isle of Mann, Iceland, etc.). The parti cularity of the system is for outgoing calls: the user dial the 
number he wants to call, but his call is routed to a hub of hi s provider. After a few seconds, the hub is calling back the user , the user’s phone rings, when he hangs up he is in communication 
with his contact.  
 
EN 65   EN The above table shows that al l assessed possible alternatives  to roaming are only partial 
substitutes. Looking at the five criteria, we can conclude that: 
1. Mobility : With the exception of VoIP over Wi-Fi (and WiMax), all the above 
possible alternatives allow fo r a high degree of mobility; 
2. Availability : Possible alternatives linked to globa l or regional SIM card ensure quite 
a good availability but are not common in the EU. The same applies to the dual SIM card handset. Other assessed alternatives related to VoIP suffer from a limited coverage of the network a nd local SIM card could incur problems with subsided 
blocked handsets. 
3. Accessibility:
 Dual SIM card handsets and multi-IMSI SIM cards (regional SIM 
cards) allow the consumer to be reached at any time on his usual number. Using 
VoIP reduces the accessibility of the user who can only be reached e.g. on his Skype 
name. Consumers choosing a local SIM card need an additional handset to remain 
reachable as does the user of the call back  system if he does not choose to forward 
his call on the foreign number. 
4. Affordability:  All of the possible alternatives allow for lower traffic  charges (at least 
for outgoing calls) but some of them require  previous investment or fees: dual SIM 
card handsets are expensive, using of an in ternet connection to connect to Skype is 
usually not free (except when free public hotspot is available).  
5. Ease of use:  A lack of ease of use is the ma in reason why consumers are not taking 
up the above-presented services . Indeed, none of them is at the same time easy to 
understand, user-friendl y and without signific ant search efforts70. These possible 
alternatives are therefore workable for business travel ers often going to the same 
place but seem rather unrealistic for an occasional (holiday) traveler. 
It can thus be concluded that none of the asse ssed possible alternatives is a perfect substitute 
to roaming. This conclusion is confirmed in the recent BEREC report on International mobile 
roaming regulation71: “Competitive pressure is not to be  expected to come from technology 
developments in the international roaming market at present. None of the technologies […] 
could be considered as full substitutes for roaming services  at present. They rather 
complement international roaming services ”72. However, according to the 2010 IDATE’s 
report on the mobile market, the nu mber of mobile VoIP users is expected to sharply grow in 
the next future73. 
1.2. Possible substitution between services within the roaming market 
Given the significant differences between domes tic and roaming tariffs, consumers often try 
to keep roaming expenses under control when travelling. The 2010 BEREC report on 
International Mobile Roaming Regulation points out that recent consumer surveys led in 4 
European countries highlight that “ many consumers use their mob ile less when roaming than 
                                                 
70 Information is often provided in foreign languages which makes the task more difficult. 
71 See. BEREC Report – International Mobile Roaming Regulation – December 2010 
72 “ International mobile roaming services: Analysis and policy recommendations ”, OECD, March 2010, 
P.58 
73 See “ Mobile 2010 : market & trends, Facts & figures ” , IDATE, 2010, P.36 
 
EN 66   EN when at home. The main reason is cost ”74. The surveys also conclude  that one of the most 
convenient ways for the consumer to reduce ro aming charges is decreasing the frequency and 
the duration of voice calls and replacing them, when possible, by a more intensive use of 
SMS. According to the BEREC report, 54% of Irish and 42% of British interviewees have, 
during the last year, used SMS inst ead of making calls when travelling.75 
Another possible substitution betw een services within the roaming market is using VoIP over 
mobile data networks instead of traditional voice calls. This possible alternative is not 
widespread throughout the EU probably due to  the high cost of mobile data roaming. 
Moreover, as already discusse d in the previous section76, using VoIP is only a partial 
substitute to roaming as it is mostly useful  for outgoing calls. However, compared to VoIP 
over Wi-Fi or WiMax, VoIP over mobile data netw orks can offer some advantages in terms of 
availability and mobility for the user. Indeed, th e coverage of mobile networks is on average 
quite large in EU countries77 and the consumer can use the VoIP services anywhere in the 
visited country as far as mobile  data network coverage is avai lable (he/she is not limited into 
the relatively narrow Wi-Fi or WiMax coverage).  
The reason for substituting one roaming service for another mainly depends on their relative 
prices. Indeed, consumers prefer  sending SMS over calling when abroad mainly because this 
is cheaper. In case of a sharp decrease in data ro aming charges, we could thus expect a further 
decline of voice calls. 
1.3. Innovations affecting the roaming market  
Technological innovation enables th e development of new products to be put on the market. 
In general, this has a positive impact on pr ices for consumers. Indeed, by putting new 
technologies on the market, the s upplier creates new and more a dvanced needs for consumers, 
usually leading to decreasing prices for ol der and less advanced existing technologies. 
Moreover, innovation increases th e availability of supply since more products are put on the 
market and additional possible alternatives appear. This increasing competitive pressure should normally also lead to decreasing prices for the consumer.  
As already mentioned in the table above desc ribing possible alternat ives to roaming, dual-
SIM handsets are not really common in the EU. But innovation in this area could be 
considered for the future since one manufactur er has recently launched the first 3G touch 
screen dual-SIM phone on th e EU-market and other ones have also announced the 
introduction of new dual-SIM ha ndsets. If manufacturers decide  to team up with service 
providers by offering dual-SIM phones linked to sp ecial tariff plans, increasing competition to 
roaming services could appear from this side. 
Still regarding innovation linked to devices, smartphone sales increas ed sharply during the 
past year
78. More and more subscribers are usi ng data services probably due to the 
                                                 
74 See. BEREC Report – International Mobile Roaming Regulation – December 2010. P.58 
75 See. BEREC Report – International Mobile Roaming Regulation – December 2010. P.63 
76 See section concerning VoIP in  the table presenting different po ssible alternatives to roaming 
77 According to a 2008 survey of IDATE, in 2007, the mobile 3G coverage varied from one Member State 
to another (from 50% in Hungary and Latvia to 100% in Malta) but in average between 70 and 80% of 
the territory was covered. 
78 Last year, smartphones market penetration was on average 18% in the five biggest EU Member States 
(France, Germany, Italy, Spain and UK).  
See http://www.allaboutsymbian.com/news/item/ 11342_comScore_data_shows_smartphone.php  
 
EN 67   EN development of new devices79 such as smartphones, tablet  computers, e-reader, games 
consoles and digital cameras enabling surfi ng on internet. According to the 2010 BEREC 
report “ these devices are expected to  change communication structur es such that people will 
communicate via email or social ne tworks instead of making voice calls ”80. 
The increasing demand for data services has al so an impact on networks. Indeed, a more 
intensive use of mobile data can le ad to problems of network saturation81. The development of 
the new mobile technology LTE coul d help to address this problem . Considered as the future 
for 4G technology, LTE should enable increasing capacity, higher transfer rates and more 
spectrum efficiency. The EU has decided to in vest 18 million EUR in research for LTE in 
201082 and the first LTE networks was launched by TeliaSonera in Sweden and Norway in 
200983. Today, auctions for the attribution of LTE  spectrum are progressively taking place in 
the EU and the European commission has fixed December, 31 2012 as a deadline to complete it.  
2. 
BARRIERS TO COMPETITION  
The market failures presented in the two previous  sections could also be considered in terms 
of barriers to competition . Indeed, the above mentioned elements represent obstacles that 
make it more difficult for potential new entrants  to enter the market or that create unequal 
conditions under which operators  are trying to compete.  
The present section resumes the main relevant barriers to competition on the European 
roaming markets84. These obstacles can be divided in 3 categories:  
– Structural barriers  coming from industry characteristics such as technology, 
cost or demand. This also includes technical barriers; 
– Strategic barriers  arising from the behavior of  some operators on the market 
(mainly incumbents) to protect themselves against other ones; 
– Regulatory barriers  resulting from acts issued or performed by executive 
authorities such as administrative oblig ations, exclusive righ ts, licenses, etc. 
The following table presents the main barriers to competition within the wholesale and the 
retail markets. As already e xplain in the section 2.1, the whol esale market can actually be 
divided into two different markets (wholesal e inbound roaming market and wholesale resale 
roaming market) including different  activities and different player s. Logically, the table below 
thus also distinguishes between these two markets. 
                                                 
79 See. BEREC Report – International Mobile Roaming Regulation – December 2010. P.57 
80 See. BEREC Report – International Mobile Roaming Regulation – December 2010. P.56 
81 See http://www.abs-cbnnews.com/technology/02/17/10/smartphones-growing-problem-networks  
82 See 
http://europa.eu/rapid/pressReleasesAction.do?ref erence=IP/09/1238&forma t=HTML&aged=1&langua
ge=EN&guiLanguage=fr  
83 See http://www.gsacom.com/news/gsa_289.php4  
84 Note that other barriers to competition have been identified in BEREC report -2010. The summary 
presented in this section only considered elements which have been identified as relevant within the 
framework of this study and which could be changed by an action at the European level. 
 
EN 68   EN Barriers to 
Competition Wholesale market Retail market 
Inbound market 
- 
Resale market  
Structural 
barriers 
 Strong dependency of MVNOs on 
its home MNO: MVNOs have few 
other alternatives than to buy resale roaming services from their domestic MNOs. This lack of substitutes reduces MVNOs’ bargaining power which could allow them to conclude better deals. 
Supply in resale market does not 
allow for differentiation: MVNOs 
are limited in offering distinctive products to their e nd-users as they 
can only sell what they get from MNOs. The limits in terms of available services on the roaming resale market reduce the competitiveness of MVNOs.  Inelasticity of demand means it is 
rational for MNOs to take high 
markups: Demand for roaming 
services depends mainly on demand for travelling. Since consumers are not going to reduce their consumption of roaming services when price are higher, providers have no incentive to reduce them. It is very unlikely that this will be corrected ‘organically’ by the retail market. 
Lack of perfect / good substitutes 
to roaming services: This reduces  
consumers’ bargaining power. If they had some other alternatives, providers would have more incentives to reduce their retail prices in order to keep their market share. 
Lack of competitive offers from 
MVNO: Consumers cannot benefit 
from possible competitive pressure from MVNOs for roaming services.  
Inbound market Strategic 
barriers 
The volume of roaming traffic that 
can be offered in return largely determines the wholesale prices in the inbound market : 
The IOT is then solely applied on the 
price for “unbalanced traffic”. This is possible only since MNOs can steer the traffic to a preferred foreign network. This implies that Small MNOs cannot enjoy as good a deal as large MNOs. Furthermore, MNOs part of a group or an alliance offer discount prices to their partners. MNOs which are not part of a group 
or an alliance must pay higher wholesale prices.  
Bundling of roaming with 
domestic mobile services: 
Consumers cannot buy domestic 
services from one providers and roaming services from another one.  
As roaming services are marginal 
compared to domestic services, there is no competition for roaming services at the retail level.  
 
EN 69   EN Barriers to 
Competition Wholesale market Retail market 
Resale market  
High risk of price squeeze in resale 
market 
Domestic MNOs are selling roaming 
services to MVNOs at a very high cost, often close to the price at which MNOs are selling services to their end-user on the retail market. This is due to the fact that domestic MNOs are at the same time MVNOs providers at the wholesale level and MVNOs competitors at the retail level. 
Inbound market 
Important barrier to entry 
Although MVNOs could in principal 
negotiate freely with MNOs, the membership of GSMA is in practice required to negotiate commercial agreements with foreign MNO, so MVNOs are excluded 
Resale market  Regulatory barriers 
Supply in resale market is mainly 
limited to the home MNOs: 
MVNOs cannot directly negotiate 
and buy roaming services from foreign MNOs. - 
Table 11: Overview of structural, strategi c and regulatory barriers in the roaming 
market 
Based on the above table, it can be concluded that the policy options for dealing with the 
(reasons behind the) problems identified, will need to focus both on the stimulation and 
strengthening of competitive market developments  as well as on promo ting the interest of 
consumers  and ensuring a high leve l of consumer protection in the retail market (cf. Chapter 3 
for the more detailed developm ent of the policy objectives). 
 
EN 70   EN 3. OVERVIEW OF HOW THE DIFFERENT STAKEHOLDERS ARE AFFECTED  
The analysis of how the different stakeholders are affected is fi rst of all expressed in direct 
relation to problem; i.e. the high level of wholes ale and retail roaming charges. Furthermore, 
it is analyzed what the specific interests of each type stakeholder are analysed with regard to 
roaming regulation.  
Category of 
stakeholder How are they affected? 
Network operators and service providers  
How are they affected by a high level of roaming rates? 
 
Big and group-integrated MNOs  
Not negatively affected by high level of wholesale roaming rates since 
they enable them to increase overall revenues. 
 Small MNOs
 (with a small domestic market share) 
Negatively affected by high wholesal e inbound tariffs since this implies 
they will have to squeeze their marg in when competing at the retail 
level 
  
What are their specific interest s regarding roaming regulation? MNOs 
 
 
Big and group-integrated MNOs  
Interested in keeping wholesales tari ffs as high as possible to ensure the 
highest possible level of roaming reve nues; any regulation is considered 
as a constraint for pricin g and product differentiation. 
 MNOs located in countries with a positive balance
 
Interested in keeping high wholesal e tariffs since these operators do in 
principle not pay for wholesale inbound services (only for unbalanced traffic, there is an actual pa yment at the wholesale level). 
 
 
EN 71   EN Category of 
stakeholder How are they affected? 
Small MNOs  (with a small domestic market share) 
Interested in price reductions impos ed by a regulation as this is the 
easiest way of getting better deals; 
Interested in new bargaining syst ems for wholesale inbound services 
which are no longer based on the volume of services they can offer to buy from the foreign MNO (a practice which currently reduces their bargaining power). 
 All MNOs
 
Interested in a regulation that keeps administrative and compliance 
costs (e.g. linked to transparency  measures) as low as possible 
 
How are they affected by a high level of roaming rates ? 
 Full and light MVNOs
 
Affected by high level of wholesale resale tariffs since these reduce 
their margin if they want to be ab le to compete at the retail level 
 
What are their specific interest s regarding roaming regulation? 
MVNOs  
Full MVNOs  
Interested in being more independent from their home MNO, e.g. by 
being able to negotiate directly  with foreign MNOs (or via an 
intermediary third party allowing to reduce overhead costs related to roaming agreements) 
 All MVNOs
 
Interested in reducing wholesale ta riffs in order to avoid significant 
margin squeeze (margin could be reduced to 0 –and even become 
 
EN 72   EN Category of 
stakeholder How are they affected? 
negatives- if the MNO resells wholesale resale services at the same 
price than his retail price85) 
 Interested in a regulation that onl y imposes transparency measures on 
those operators that can actually cont rol the relevant parts of the value 
chain required to implement the measures in to avoid excessive administrative and compliance costs to the other ones. Need to keep a balance between the benefit for the consumer and the costs imposed to the services provider. 
 
How are they affected by a high level of roaming rates? 
 
All resellers  
Affected by the high wholesale resale tariffs as their margin is reduced 
to enable them to compete on the retail market 
 
What are their specific interest s regarding roaming regulation? 
Resellers  
All resellers  
Interested in reducing wholesale ta riffs to avoid significant margin 
squeeze (margin could be reduced to 0 –and even lead to loses- if the 
MNO resells wholesale resale services  at the same price than his retail 
price) 
 Interested in a regulation imposing transparency measure on the 
operators who can organize and who cont rol this part of the value chain 
to avoid excessive administrative and compliance costs to the other 
ones. Need to keep a balance betwee n the benefit for the consumer and 
the cost imposed to the services provider 
 
How are they affected by a high level of roaming rates? Providers of 
other than mobile  
                                                 
85 See. BEREC Report – International Mobile  Roaming Regulation – December 2010, P.38  
 
EN 73   EN Category of 
stakeholder How are they affected? 
All providers of other than mobile technologies  
Not directly affected by high leve l of roaming rates but benefit 
indirectly from this since the higher the roaming tariffs, the more consumers are interested in fi nding another telecommunications 
solution and the less demanding they are regarding finding the “perfect 
substitute to roaming” ch aracteristic of the product 
 
What are their specific interest s regarding roaming regulation? technologies 
 
All providers of other than mobile technologies  
Interested in keeping roaming tariffs as high as possible to benefit from 
revenues due to new costumers trying to avoid roaming charges. The higher the roaming charges, the higher  the alternative providers’ tariffs 
could be set and thus the higher their revenues could be (for as far as their price setting is indeed affected  by international ro aming prices).  
 
Customers  
How are they affected by a high level of roaming rates?  
Businesses   
Businesses with a large amount of  roaming services consumption  
Less affected by high level of reta il roaming rates than the next 
category since they can negotiate a ttractive terms of contract based on 
their large volumes.  
 Businesses with a lower amount of roaming services consumption
 
 
 
EN 74   EN Category of 
stakeholder How are they affected? 
– travelling to different destinations 
The most affected by the high retail pr ices of roaming services as they 
are “intermediate frequent roamers”86 but do not consume enough to be 
able to benefit from reductions 
 
– often travelling to the same destination(s) 
Less affected by the high retail pri ces for roaming services than the 
previous category since they have more incentive to dedicate time for 
the search of a good altern ative to roaming such as local SIM card for 
example 
 
What are their specific interest s regarding roaming regulation? 
 
All businesses  
– Interested in lower retail prices  for roaming services to reduce 
their roaming charges and to a void the need to search for 
alternatives to roaming which are imperfect substitutes 
 – Interested in keeping transparency measures allowing them to 
monitor their roaming expenses and to prevent “bill shock”. 
 
How are they affected by a high level of roaming rates?  
Individual 
consumers   
Individual consumer never using roaming services  
Not affected by the high level of retail roaming rate as up to now it was 
not proofed that changes in roaming ta riffs have an effect on the price 
or quality of domestic services 
 
                                                 
86 See. BEREC Report – International Mobile  Roaming Regulation – December 2010, P.9  
 
EN 75   EN Category of 
stakeholder How are they affected? 
Individual consumers travelling freq uently to different destinations  
Most affected by the high level of retail roaming rates since they are 
consuming a significant amount of ro aming services but do not have 
incentive to search for alternatives to roaming87 since the duration of 
the stay is often too short. Neither  do they have any negotiating power 
to obtain a better deal from their provider. 
 Individual consumer often travel ling to the same destination(s)
 
Less affected by the high retail pri ces for roaming services than the 
previous category since they have more incentives to take time 
searching of a good alternative to roaming such as e.g. a local SIM 
card. 
 
What are their specific interest s regarding roaming regulation? 
 
All individual consumers using roaming services  
– Interested in lower retail prices  for roaming services to reduce 
their roaming charges and to a void the need to search for 
alternatives to roaming which are imperfect substitutes  
–  
– Interested in keeping transparency measures allowing them to 
monitor their roaming expenses and to prevent “bill shock” 
 
Public authorities  
How are they affected by a high level of roaming rates?  
NRAs  
All NRAs  
Not directly affected by  high level of roaming ra tes but this affects the 
domestic consumers the NRAs are s upposed to protect from too high 
                                                                                                                                                         
87 Except substitute such as international SIM ca rd, but these are not really user-friendly.  
 
EN 76   EN Category of 
stakeholder How are they affected? 
retail prices. 
 
What are their specific interest s regarding roaming regulation? 
 
NRAs from countries with a positive roaming balance  
Less interested in wholesale tariffs  regulation since lower wholesale 
prices would reduce national provi ders’ margin and could result in fine  
in increased domestic prices (unt il now this effect has never been 
observed, but more severe price cu ts could however change this). 
 All NRAs
 
– Very interested in regulation at the EU-level since they cannot 
fulfill the task of domestic consumer protection they are assigned by taking measures at the national-level; 
 
 
 
EN 77   EN 4. TABLE OF IMPACTS  
The following main qualitative impacts per specific objective have been identified: 
Specific objective Impacts 
Objective 1:  
Reduce distortions between 
Member States Economic impacts 
• Better level playing field for electronic 
communications operators across the EU; 
• Increased development of a European single 
market for electronic communications. 
Objective 2:  
Ensure an optimal level of 
governance Economic impacts 
• Reduced risk of negative cross-country 
externalities for specific parts of the European consumers.  
Objective 3:  
Ensure that competitive 
market developments are stimulated and that technological developments are not hindered Economic impacts 
• Increased availability of wholesale roaming 
services at the same conditions for all operators 
(e.g. incl. small player s and MVNOs) (conditions 
= price en access, possibil ity of direct bilateral 
contracts,..) 
• Reduced risk of price s queeze via the availability 
of cost based wholesale se rvices to all operators; 
• Reduced technical barrier s for the provision of 
roaming services; (cf. own IMSI codes, 
implementation of bill shock, ) 
• Increased probability that the most efficient 
technological solution for making calls abroad 
can develop; (not hindering development of substitutes) 
• Increased development of retail services in 
addition to the regulated service provisions. 
Environmental impacts 
• Reduced need for additional specific equipment 
(terminals, cards,..) for being able to make calls in other EU Member States. 
 
EN 78   EN Specific objective Impacts 
Objective 4: 
Strengthen the 
competitiveness of European industry 
 Economic impacts 
• Increased availability of roaming services at 
competitive prices;  
• Increased availability of pan-European mobile 
offers.  
Objective 5: 
Ensure user choice and 
transparency 
 Economic impacts 
• Increased control by the us er of its international 
roaming expenditure; 
• Increased choice regarding the applicable 
roaming tariff plan; 
• Increased probability that users will find in an 
easy way the best possible roaming tariff plan. 
Objective 6: 
Ensure that prices are at 
levels reflecting underlying costs (as they would result from competitive market forces) 
 Economic impacts 
• Reduced difference between international 
roaming and domestic retail charges; 
• Increased transfer of price reductions at the 
wholesale level to the retail level. 
Objective 7:  
Ensure that consumers can 
benefit from prices reflecting 
underlying costs Economic impacts 
• Reduced risk that roaming prices would increase 
materially for some specific customer segments 
(cf. ‘no losers policy’) 
• Social impacts  
• Social inclusion: Increased affordability of 
roaming services for social groups 
 
EN 79   EN ANNEX II QUALITATIVE ASSESSMENT  
OPTION 1 OPTION 2 A OPTION 2 B OPTION 2C OPTION 3A OPTION 3B Option 3c  OPTION 3D 
  No Regulation 
 
 Caps of 2012 
 
 Annually 
adjusted caps 
 Roam like 
home/local 
 Decoupling 
 
 Improved 
wholesale 
access 
conditions   
3a+3b+safeguard 
caps 
 Spot market 
 
 
IMPACTS  
Magnitude  
Likelihood  
Total  
Magnitude  
Likelihood  
Total  
Magnitude  
Likelihood  
Total  
Magnitude  
Likelihood  
Total  
Magnitude  
Likelihood  
Total  
Magnitude  
Likelihood  
Total  
Magnitude  
Likelihood  
Total  
Magnitude  
Likelihood  
Total  
ENSURING THE DEVELOPMENT OF A SINGLE  COHERENT REGULATORY FRAMEWORK  
OBJECTIVE 1: REDUCE DISTORTIONS BETWEEN MEMBER STATES  
ECONOMIC IMPACTS  
- +     Better level playing field for electronic 
communications operators across the 
EU - 2 -4 0 3 0 + 3 3 0 3 0 + 3 3 0 3 0 + 2 4 + 0 0 
-   +       Increased developmen t of a European 
single market for electronic 
communications  - 2 -4 0 2 0 0 2 0 + 1 +1 + 2 2 + 2 2 + 2 4 + 0 0 
TOTAL OBJECTIVE 1 -8 0 3 1 5 2 8 0 
OBJECTIVE 2: ENSURE AN OPTIMAL LEVEL OF GOVERNANCE  
ECONOMIC IMPACTS  
-           Reduced risk of negative cross-country 
externalities for specific parts of the 
European consumers  - 1 -2 0 3 0 0 3 0 0 3 0 0 3 0 0 2 0 0 3 0 0 3 0 
TOTAL OBJECTIVE 2 -2 0 0 0 0 0 0 0 
 
EN 80   EN STIMULATING AND STRENGTHENING SUSTAINABLE COMPETITION IN THE DIGITAL SINGLE MARKET  
OBJECTIVE 3: ENSURE THAT COMPETITIVE MARKET CONDITIONS ARE STIMULATED  AND THAT TECHNOLOGICAL DEVELOPMENTS ARE NOT HINDERED  
ECONOMIC IMPACTS  
-               
-             + Increased availability of wholesale 
roaming services at the same conditions 
for all operators (e.g. incl. small players 
and MVNOs)  - 3 -9 0 1 0 0 1 0 0 1 0 0 1 0 + 2 2 + 2 2 + 0 0 
-               
-     + +     + Reduced risk of price squeeze via the 
availability of cost based wholesale 
services to all operators    3 -6 0 1 0 0 2 0 0 2 0 0 1 0 + 2 4 + 2 4 + 1 2 
              
+           - Reduced technical barriers for the 
provision of roaming services  0 3 0 0 1 0 0 1 0 0 1 0 + 2 4 0 1 0 + 2 2 - 3 -6 
+           Increased probability that the most 
efficient technological solution for 
making calls abroad can develop  + 1 2 0 1 0 - 1 -1 - 2 -2 0 1 0 + 2 2 + 2 2 0 1 0 
+   +     Increased development of retail services 
in addition to the regulated service 
provisions  - 1 -1 0 1 0 0 1 0 + 1 1 + 2 4 + 2 2 + 2 4 + 1 1 
ENVIRONMENTAL IMPACTS  
 
EN 81   EN Reduced need for additional specific 
equipment (terminals, cards,..) for being 
able to make calls in other EU Member 
States.  0 0 0 0 2 0 0 3 0 0 2 0 - 2 -2 0 0 0 - 2 -2 0 0 0 
TOTAL OBJECTIVE 3 -14 0 -1 -1 6 10   12   -3 
OBJECTIVE 4: STRENGTHEN THE COMPETITIVENESS OF EUROPEAN INDUSTRY  
ECONOMIC IMPACTS  
    +           
- + +           Increased availability of roaming 
services at competitive prices  - 2 -4 0 1 0 + 2 4 + 2 6 + 1 1 + + 1 2 + 1 1 ++ 0 0 
    +       Increased availability of pan-European 
mobile offers  + 1 1 0 1 0 0 1 0 0 1 0 + 2 2  + 1 1 + 2 4 0 0 0 
TOTAL OBJECTIVE 4 -3 0 4 6 3 3   5   0 
PROMOTING THE INTEREST OF CONSUMERS AND ENSURING  A HIGH LEVEL OF CONSUMER PROTECTION FOR ALL EU CONSUMERS  
OBJECTIVE 5: ENSURE USER CHOICE AND TRANSPARENCY  
ECONOMIC IMPACTS  
-           
-           Increased control by the user of its 
international roaming expenditure  - 2 -6 0 3 0 + 3 3 0 3 0 + 1 1 0 1 0 + 2 2 0 3 0 
+   + +       Increased choice regarding the 
applicable roaming tariff plan  - 2 -2 0 1 0 0 1 0 + 1 1 + 2 4 + 1 2 + 2 4 + 1 1 
Increased probability that users will find 
in an easy way the best possible roaming 
tariff plan  0 2 0 0 1 0 0 1 0 0 1 0 + 1 1 0 1 0 ++ 2 4 + 1 1 
 
EN 82   EN TOTAL OBJECTIVE 5 -8 0 3 1 6 2   10   2 
OBJECTIVE 6: ENSURE THAT PRICES ARE AT LEVELS REFLECTING UNDERLYING COSTS (AS THEY WOULD RESULT FROM COMPETITIVE MARKET FORCES ) 
ECONOMIC IMPACTS  
- +       +     Reduced difference between international 
roaming and domestic retail charges  - 2 -4 + 0 0 + 2 4 + 2 2 + 1 1 + 1 1 + 2 4 + 1 1 
-                   
- +         +       Increased transfer of price reductions at the 
wholesale level to the retail level  - 2 -6 0 1 0 + 2 4 + 2 2 + 1 1 + 1 1 + 2 4 + 1 1 
TOTAL OBJECTIVE 6 -10 0 8 4 2 2   8   2 
OBJECTIVE 7: ENSURE THAT ALL CATEGORIES OF CONSUMERS CAN BENEFIT FROM PRICES REFLECTING UNDERLYING COSTS  
ECONOMIC IMPACTS  
-           Reduced risk that roaming prices would 
increase materially for some specific 
customer segments (cf. ‘no losers 
policy’)  - 3 -6 0 2 0 + 1 1 0 1 0 0 1 0 0 0 0 0 0 0 0 0 0 
SOCIAL IMPACTS  
-           
-           Social inclusion: Increased affordability 
of roaming services for all social groups  - 2 -6 0 2 0 + 2 2 0 1 0 0 1 0 0 1 0 + 1 1 0 1 0 
TOTAL OBJECTIVE 7 -12 0 3 0 0 0 1 0 
TOTAL  -57 0 20 11 22 19 44 1 
 
EN 83   EN The assessment of all of the impacts under each of the options is done by analysing the 
magnitude of the expected impact, as well as th e likelihood that the impa ct will actually occur 
as a result of the proposed policy option.  
The notation used to express the magnitude (compared to the baseline scenario) is the 
following: 
- - - very negative impact - - negative impact - slightly negative impact 0 no impact + slightly positive impact + + positive impact + + + very positive impact The likelihood will be expressed as follows: 0 no likelihood 1 low likelihood 2 medium likelihood 3 high likelihood 
These scores give an additional weight to th e score expressing the magnitude of the impact. 
As such and in contrast to the score for the ma gnitude, the value given fo r the likelihood is an 
absolute score, i.e. not relative to  the score of the baseline scenario. 
 
EN 84   EN ANNEX  III 
Quantitative Economic Analysis 
STEP 1: Determination of the relevant parameters for the Status Quo of the 
International Roaming market 
In a first step, the relevant traffic and total re venue data by service of each Member State have 
been identified88: 
– Traffic data 
• Volume of retail voice calls made (m min, 2009); 
• Volume of retail voice ca lls received (m min, 2009); 
• Volume of retail SMS sent (m, 2009); 
• Volume of retail data usage (m MB, 2009). 
– Revenue data 
• Total revenue for retail voice calls made (m €, 2009); 
• Total revenue for retail voi ce calls received (m €, 2009); 
• Total revenue for retail SMS sent (m €, 2009); 
• Total revenue for retail data usage (m €, 2009). 
These data provided the inputs for the calculation of averag e revenue per Minute/SMS/MB 
(Average Unitary Revenue, AUR) for each country and every service: 
– Revenue data 
• Average revenue for retail voi ce calls made (€/min, 2009) 
• Average revenue for retail voice calls received (€/min, 2009) 
• Average revenue for retail SMS sent (€, 2009) 
• Average revenue for retail data usage (€/MB, 2009) 
For each individual Member State and for each  service the volumes and average unitary 
revenue for 2009 are: 
                                                 
88 BEREC information for 2009 has been employed, which is the latest full calendar year available. 
 
EN 85   EN Table 12: Overview of the volumes and aver age unitary revenue by Member State for 
each retail service in th e reference year 2009 (Based on BEREC information)  MEMBER 
STATE RETAIL SERVICES 
 Retail voice calls 
made Retail voice calls 
received Retail SMS Retail data 
 Volume 
(m min) AUR 
(€/min) Volume 
(m 
min) AUR 
(€/min) Volume 
(m) AUR (€) Volume 
(m MB) AUR 
(€/MB)
AT -  -  -  -  -  -  -  -  
BE 256,9  0,46  173,6  0,21  194,1  0,19  13,9  3,37  
BG 18,0  0,61  34,8  0,24  13,0  0,17  0,4  5,27  
CY 22,0  0,55  17,7  0,20  19,5  0,15  0,5  1,31  
CZ 39,4  0,53  63,9  0,20  121,4  0,18  3,5  3,97  
DK -  -  -  -  -  -  -  -  
EE 37,6  0,53  63,1  0,12  14,9  0,18  0,4  3,89  
FI 76,4  0,49  60,7  0,21  47,5  0,17  4,4  3,11  
FR 453,0  0,47  312,0  0,21  240,5  0,16  30,2  4,63  
DE 834,0  0,49  700,4  0,20  375,7  0,20  60,7  2,25  
GR 54,4  0,51  59,4  0,24  22,8  0,18  1,7  5,12  
HU 50,7  0,50  71,6  0,22  51,3  0,19  2,8  2,88  
IE -  -  -  -  -  -  -  -  
IT 364,0  0,49  370,4  0,20  278,7  0,16  24,8  3,37  
LV 11,1 0,47 26,5 0,10 19,2 0,13 0,4 3,59 
LT 13,4  0,51  23,2  0,21  31,2  0,15  0,5  3,67  
LU -  -  -  -  -  -  -  -  
MT 4,0  0,58  2,6  0,29  5,6  0,17  0,3  1,95  
NL 388,0  0,48  287,6  0,21  246,4  0,20  28,8  2,09  
PL 171,5  0,49  216,8  0,21  248,8  0,17  5,2  3,69  
PT 79,3  0,47  117,7  0,18  47,2  0,20  5,4  2,65  
RO 59,3  0,48  106,0  0,21  52,7  0,16  3,4  2,97  
SK 51,7  0,51  64,1  0,21  48,2  0,19  1,8  3,80  
SI 21,5  0,54  28,1  0,23  22,5  0,17  0,7  4,97  
ES 271,6  0,50  319,7  0,20  74,4  0,18  26,8  3,24  
SE -  -  -  -  -  -  -  -  
GB 811,4  0,37  504,2  0,14  699,4  0,13  60,0  1,23  
TOTAL 4.089,4 0,46 3.624,3 0,19 2.874,9 0,17 276,4 1,71 
 
EN 86   EN  
MEMBER 
STATE WHOLESALE SERVICES 
 Wholesale voice calls 
made Wholesale SMS Wholesale Data 
 Volume 
(m min) AUR 
(€/min) Volume 
(m) AUR (€) Volume 
(m MB) AUR 
(€/MB) 
AT -  -  -  -  -  -  
BE 225,0  0,28  158,2  0,07  15,2  0,73  
BG 38,0  0,21  26,7  0,05  2,6  1,04  
CY 29,4  0,28  20,7  0,05  2,0  1,24  
CZ 84,4  0,30  59,3  0,09  5,7  1,19  
DK -  -  -  -  -  -  
EE 18,0  0,32  12,7  0,10  1,2  1,55  
FI 42,7  0,30  30,0  0,08  2,9  0,88  
FR 684,2  0,25  481,0  0,07  46,2  0,70  
DE 558,1  0,27  392,3  0,07  37,7  0,59  
GR 150,1  0,29  105,5  0,07  10,1  1,15  
HU 98,0  0,21  68,9  0,07  6,6  0,69  
IE -  -  -  -  -  -  
IT 429,6  0,26  302,0  0,08  29,0  0,55  
LV 22,7 0,25 16,0 0,10 1,5 0,94 
LT 11,2  0,30  7,9  0,08  0,8  0,75  
LU -  -  -  -  -  -  
MT 18,2  0,31  12,8  0,10  1,2  1,28  
NL 222,3  0,24  156,3  0,08  15,0  0,55  
PL 128,5  0,24  90,3  0,08  8,7  1,06  
PT 142,3  0,21  100,0  0,06  9,6  0,43  
RO 64,4  0,27  45,3  0,08  4,4  0,64  
SK 42,5  0,27  29,9  0,09  2,9  1,06  
SI 20,1  0,28  14,1  0,10  1,4  1,58  
ES 645,5  0,20  453,8  0,07  43,6  0,54  
SE -  -  -  -  -  -  
GB 414,4  0,24  291,3  0,07  28,0  0,43  
TOTAL 4.089,4 0,25 2.874,9 0,08 276,4 0,67 
Table 13: Overview of the volumes and aver age unitary revenue by Member State for 
each wholesale service in the reference ye ar 2009 (Based on BEREC information) 
Based on the lack of reliability  of the figures for these five countries, it has been deemed 
necessary to exclude them from the impact assessment, at 13,98 % of the overall traffic (retail 
voice) and 13,91 % of the total roaming re venues (including reta il and wholesale). 
The inputs presented above will be used to parameterize the demand functions at national 
level. 
STEP 2: Estimation of the demand parameters 
 
EN 87   EN In a second step, the demand parameters are es timated in order to define a demand function 
for each Member State. The final purpose of th e resulting demand functi on is to quantify the 
amount of roaming services demanded according to the willingness of the consumers to pay 
for these services. 
The linear demand system89 that has been used follows the standard mathematical demand 
expression q = A – Bp, but applied to multiple  goods or services, where A expresses the 
intercepts and B the slopes, i.e. the effect of prices on demand.  
 
On the basis of the volumes and average unitar y revenues presented in the step 1, a linear 
demand system has been implemented at the leve l of each Member State. This demand system 
has been used as a local appr oximation to the actual demand system in order to determine 
changes in traffic volumes following a varia tion in prices of the relevant services. 
On the one hand, the (own- and cross-) elastici ties for all relevant services have been 
estimated, using a system of instrument al variable fixed-effects panel models90, at EU level. 
On the other hand, the intercepts and slopes de fining the demand functi ons are obtained at 
Member State level. 
Own- and Cross-Price elasticity  
In order to perform quantitative estimates of  the welfare effects of changing the existing 
Roaming Regulation in the Economic Model, an econometric estimati on of EU-wide demand 
elasticities for the four services “roaming ca lls made”, “roaming calls received”, “roaming 
SMS” and “data roaming” has been performed. In order to be consistent with welfare 
calculations, a system of four demand equations, each for one of the services just mentioned, has been estimated, with cross-equation constrai nts that guaranteed Slutsky symmetry at the 
sample mean. 
The estimated demand elasticities are the following: 
ECONOMETRIC ESTIMATES 
 Price of calls 
made Price of calls 
received Price of 
SMS Price of 
data 
Demand for calls made -0.27   0.05 
Demand for calls  -0.24  -0.09 
                                                 
89 Using a linear demand function responds to a conservative approach. Changes in consumer surplus 
under a linear demand function are smaller than thos e under a constant-elasticity one, where the latter 
are again smaller than in a system in which the el asticity increases in the range of lower prices.  
90 In econometrics, the concept of panel data refers to multi-dimensional data. Panel data usually contains 
observations on multiple phenomena observed over multiple time periods for the same firms and/or 
individuals. The panel employed for the econometric analysis with regards to the relevant roaming 
services contains 13 quarters (2007Q2 to 2010 Q2) over the 27 Member States. 
 
EN 88   EN received 
Demand for SMS   -0.24  
Demand for data 0.21 -0.13  -1.23 
According to economic theory, the variation in price of a good has the following impact on an 
operators’ revenues for the same good: 
d/dp (p*q) = q*(1 - eps),  
where eps is the (absolute value of the) demand elasticity This has the following consequences: 
• If eps < 1 (as is the case in most of the estimates), a lower price implies a decrease in 
revenues, since there is no contra ry effect from higher quantities. 
• If eps > 1 a lower price actually increases revenues, since the increase in quantities 
over-compensate the effect  of the price reduction 
• If we just consider 0 < eps < 1, a lower value for eps implies that a decrease in price 
leads to a stronger reduction in revenues. 
Given the elasticities that have been estimated  for voice calls and SMS, lower price caps will 
decrease revenues. For data a price cap will increase revenues (but not profits). 
Demand function: Intercept and slopes
 
The demand parameters A and B considered in the linear demand system for each country 
result from the following calculations: 
 
 
STEP 3: Determination of the relevant pri ces by service for each regulatory option 
In a third step, based on the c onfiguration of each re gulatory option, the relevant prices over 
the relevant period (2012-2014) are determined. In general terms, the applicable price by 
service for each scenario is chosen as the minimum between the present price cap (if 
applicable) and the price (freel y) driven by market forces, as predicted by an underlying 
roaming market model. 
For each individual Member State, for each service and for each regulatory option, the 
average unitary revenue has been estimated, leading to the following (average) values at EU 
level for each year of the relevant period: 
REGULATORY OPTION RETAIL AUR WHOLESALE AUR 
 
EN 89   EN 2012 Retail 
voice calls 
made 
(€/min) Retail 
voice calls 
received 
(€/min) Retail 
SMS (€) Retail 
data 
(€/MB) Wholesal
e voice 
calls 
made 
(€/min) Wholesal
e SMS (€) Wholesal
e Data 
(€/MB) 
OPTION 1 - NO REGULATION 1,87 0,46 0,72 3,31 1,42 0,54 1,18 
OPTION 2.a - PRICE-CAP - 
"CONTINUATION À 
L'IDENTIQUE" (Baseline 
scenario) 0,35 0,11 0,11 2,65 0,18 0,04 0,49 
OPTION 2.b - PRICE-CAP INCL. 
RETAIL DATA  0,24 0,10 0,05 0,51 0,14 0,03 0,30 
OPTION 3.c STRUCTURAL 
SOLUTION  
with safeguard caps 0,32 0,11 0,10 0,90 0,14 0,03 0,30 
Table 14: Overview of the average unitary revenue at EU level by service for each 
regulatory option corresponding to the year 2012  
REGULATORY OPTION  RETAIL AUR  WHOLESALE AUR  
2013 Retail 
voice calls 
made 
(€/min)  Retail 
voice calls 
received 
(€/min)  Retail 
SMS (€)  Retail 
data 
(€/MB)  Wholesale 
voice calls 
made 
(€/min)  Wholesal
e SMS (€)  Wholesal
e Data 
(€/MB)  
OPTION 1 - NO REGULATION  1,87 0,46 0,72 3,31 1,42 0,54 1,18 
OPTION 2.a - PRICE-CAP - 
"CONTINUATION À 
L'IDENTIQUE" (Baseline 
scenario)  0,35 0,11 0,11 2,65 0,18 0,04 0,49 
OPTION 2.b - PRICE-CAP INCL. 
RETAIL DATA  0,17 0,09 0,05 0,34 0,10 0,03 0,20 
OPTION 3.c STRUCTURAL 
SOLUTION  
with safeguard caps  0,28 0,10 0,09 0,70 0,10 0,03 0,20 
Table 15: Overview of the average unitary revenue at EU level by service for each 
regulatory option corresponding to the year 2013  
REGULATORY OPTION  RETAIL AUR  WHOLESALE AUR  
2014 Retail 
voice calls 
made 
(€/min)  Retail 
voice calls 
received 
(€/min)  Retail 
SMS (€)  Retail 
data 
(€/MB)  Wholesale 
voice calls 
made 
(€/min)  Wholesal
e SMS (€)  Wholesal
e Data 
(€/MB)  
OPTION 1 - NO REGULATION  1,87 0,46 0,72 3,31 1,42 0,54 1,18 
 
EN 90   EN OPTION 2.a - PRICE-CAP - 
"CONTINUATION À 
L'IDENTIQUE" (Baseline 
scenario)  0,35 0,11 0,11 2,65 0,18 0,04 0,49 
OPTION 2.b - PRICE-CAP INCL. 
RETAIL DATA  0,10 0,08 0,03 0,17 0,06 0,02 0,10 
OPTION 3.c STRUCTURAL 
SOLUTION  
with safeguard caps  0,24 0,10 0,08 0,50 0,06 0,02 0,10 
Table 16: Overview of the average unitary revenue at EU level by service for each 
regulatory option corresponding to the year 2014 
Prices driven by market forces – Determina tion of unregulated retail and wholesale prices  
Unregulated retail prices are dete rmined in a country-wise Nash  equilibrium as a function of 
given regulated or unregulated wholesale prices . Unregulated wholesale prices are determined 
taking into account the derived demand resul ting from home networks’ retail pricing.91.  
STEP 4: Estimation of the quantities (traf fic volume) by service for each regulatory 
option 
In a fourth step, with the aim of estimating the quantities (traffic volume) for each regulatory 
option, it is assumed that the demand will follow the expressions determined in step 2. 
For each individual Member State, for each service and for each regulatory option, the 
quantities (demand) have been estimated, leadi ng to the following (total) values at EU level 
for each year of the relevant period: 
REGULATORY 
OPTION  RETAIL AUR  WHOLESALE AUR  
2012 Retail 
voice calls 
made (m 
min) Retail voice 
calls 
received (m 
min) Retail 
SMS (m)  Retail data 
(m MB)  Wholesale 
voice calls 
made (m 
min) Wholesale 
SMS (m)  Wholesale 
Data (m 
MB) 
OPTION 1 - NO 
REGULATION  824,79  2.331,19  616,33  314,32  824,79  616,33  314,32  
OPTION 2.a - 
PRICE-CAP - 
"CONTINUATION 
À L'IDENTIQUE" 
(Baseline scenario)  4.352,10  3.990,69  3.099,85  277,37  4.352,10  3.099,85  277,37  
OPTION 2.b - 
PRICE-CAP INCL. 
RETAIL DATA  4.444,15  4.309,00  3.358,20  526,81  4.444,15  3.358,20  526,81  
OPTION 3.c 
STRUCTURAL 
SOLUTION  
with safeguard caps  4.289,25  4.208,45  3.142,91  474,68  4.289,25  3.142,91  474,68  
                                                 
91 Technically speaking, in the case where both wholesal e and retail prices are unregulated we consider a 
subgame-perfect equilibrium where networks choose wholesale prices in a first step and retail prices in 
a second step, after having observed (foreign networks’) wholesale prices. 
 
EN 91   EN Table 17: Overview of the traffic volume at EU level by service for each regulatory 
option corresponding to the year 2012  
REGULATORY 
OPTION  RETAIL AUR  WHOLESALE AUR  
2013 Retail voice 
calls made 
(m min)  Retail voice 
calls received 
(m min)  Retail SMS 
(m) Retail 
data (m 
MB) Wholesale 
voice calls 
made (m 
min) Wholesale 
SMS (m)  Wholesale 
Data (m 
MB) 
OPTION 1 - NO 
REGULATION  824,79  2.331,19  616,33  314,32  824,79  616,33  314,32  
OPTION 2.a - PRICE-
CAP - 
"CONTINUATION À 
L'IDENTIQUE" 
(Baseline scenario)  4.352,10  3.990,69  3.099,85  277,37  4.352,10  3.099,85  277,37  
OPTION 2.b - PRICE-
CAP INCL. RETAIL 
DATA  4.596,59  4.379,46  3.358,20  546,15  4.596,59  3.358,20  546,15  
OPTION 3.c 
STRUCTURAL 
SOLUTION  
with safeguard caps  4.366,21  4.282,48  3.185,97  502,49  4.366,21  3.185,97  502,49  
Table 18: Overview of the traffic volume at EU level by service for each regulatory 
option corresponding to the year 2013  
REGULATORY 
OPTION  RETAIL AUR  WHOLESALE AUR  
2014 Retail voice 
calls made 
(€/min)  Retail voice 
calls received 
(€/min)  Retail SMS 
(€) Retail data 
(€/MB)  Wholesal
e voice 
calls 
made 
(€/min)  Wholesale 
SMS (€)  Wholesale 
Data 
(€/MB)  
OPTION 1 - NO 
REGULATION  824,74  2.344,05  616,33  314,74  824,74  616,33  314,74  
OPTION 2.a - PRICE-
CAP - 
"CONTINUATION À 
L'IDENTIQUE" 
(Baseline scenario)  4.352,10  3.990,69  3.099,85  277,37  4.352,10  3.099,85  277,37  
OPTION 2.b - PRICE-
CAP INCL. RETAIL 
DATA  4.749,03  4.449,95  3.444,32  565,48  4.749,03  3.444,32  565,48  
OPTION 3.c 
STRUCTURAL 
SOLUTION  
with safeguard caps  4.443,16  4.310,39  3.229,02  528,36  4.443,16  3.229,02  528,36  
Table 19: Overview of the traffic volume at EU level by service for each regulatory 
option corresponding to the year 2014 
STEP 5: Estimation of the revenues and cost s by service for each regulatory option over 
the relevant period 
In a fifth step the revenues and costs are estimated as the multiplication of the quantities by 
service and the applicable average unitary revenue and cost. 
 
EN 92   EN For each individual Member State, for each service and for each regulatory option, the 
revenues and costs have been estimated for each  year of the relevant period. Accumulated 
over the period, they lead to the foll owing (total) values at EU level: 
REGULATORY OPTION  ACUMULATED REVENUES  
2012-2014  Retail voice 
calls made (m €)Retail voice calls 
received (m €)  Retail SMS (m 
€) Retail data (m 
€) 
OPTION 1 - NO REGULATION  4.628  3.228  1.330  3.125  
OPTION 2.a - PRICE-CAP - "CONTINUATION À 
L'IDENTIQUE" (Baseline scenario)  4.570  1.316  1.023  2.205  
OPTION 2.b - PRICE-CAP INCL. RETAIL DATA 2.323  1.181  439  550  
OPTION 3.c STRUCTURAL SOLUTION  
with safeguard caps  3.661  1.322  859  1.043  
Table 20: Overview of the EU accumula ted (over the relevant period 2012-2014) 
revenues by service for each regulatory option 
REGULATORY OPTION  ACUMULATED COST  
2012-2014  Retail voice calls 
made (m min)  Retail voice calls 
received (m min)Retail SMS (m)  Retail data (m 
MB) 
OPTION 1 - NO REGULATION  3.651  552  1.045  1.134  
OPTION 2.a - PRICE-CAP - "CONTINUATION À 
L'IDENTIQUE" (Baseline scenario)  3.058  946  635  426  
OPTION 2.b - PRICE-CAP INCL. RETAIL DATA 2.114  1.037  558  357  
OPTION 3.c STRUCTURAL SOLUTION  
with safeguard caps  2.014  1.011  525  326  
Table 21: Overview of the EU accumulated (over the relevant peri od 2012-2014) costs by 
service for each regulatory option 
STEP 6: Estimation of the industry profits (or producer surplus), consumer surplus and 
social welfare for each regulator y option over the relevant period 
In a sixth step the profits on the industry, the consumer surplus and the social welfare are 
estimated: 
• industry profits/losses are determined as the difference between  the total revenues 
and the costs incurred consumer surplus due to the consumption of all four services 
is determined through the calcula tion of the indirect utility 
 
 
EN 93   EN By summing industry profits and consumer surplu s, the absolute social welfare is estimated 
for each Member State and for each regulator y option. For the purpose of this impact 
assessment, while ensuring economic correctness, the absolute values of the social welfare 
will be “normalized” through the baseline scenario92. 
Since the services considered (voice calls made and received, SMS and data) are substitutes or 
complements to each other, it would be economically incorrect to present separate consumer 
surplus estimates for each single service. Thus  the social welfare results (variation) are 
presented on a country-basis: 
• Industry profits 
• Consumer surplus 
• Total welfare 
Apart from the welfare (and surplus) for the baseline scenario and each regulatory option, the 
rest of the outputs of the model are the following: 
• Retail and wholesale prices 
• Retail and wholesale volumes 
• Operator profits 
• Consumer surplus 
The above results are presented in aggr egated form per service at EU level93 in the following 
table. 
EU TOTAL 
ACCUMULATED  OPTION 2.b - PRICE-CAP INCL. 
RETAIL DATA  OPTION 3.c STRUCTURAL 
SOLUTION  
with safeguard caps  
Voice calls made      
  OPTION 2.b.  OPTION 3.c  
Prices (€/min)  0,17 0,28 
Quantities (m min)  13.789,77  13.098,62  
Revenues (m €)  2.322,92  3.661,46  
Costs (m €)  2.114,19  2.013,65  
Profits (m €)  208,73  1.647,81  
 
                                                 
92 Economically speaking, there is no accurate way to calculate the absolute welf are numbers based on the 
available data. However, the variation (or gain) in social welfare of a regulatory option in comparison 
with a baseline scenario is an a lternative appropriate and much mo re robust decision-making tool. 
Essentially, by considering only variations between sc enarios, the "arbitrary" or "non-estimable" part of 
consumer surplus cancels. 
93 Member States and relevant services can be consid ered separately for the pr esentation of prices and 
volumes at retail and wholesale level, whereas on ly Member States can be considered for the 
determination of producer and consumer surplus 
 
EN 94   EN Voice calls received      
  OPTION 2.b.  OPTION 3.c  
Prices (€/min)  0,09 0,10 
Quantities (m min)  13.138,41  12.801,33  
Revenues (m €)  1.181,03  1.321,88  
Costs (m €)  1.036,96  1.010,55  
Profits (m €)  144,07  311,33  
 
SMS     
  OPTION 2.b.  OPTION 3.c  
Prices (€/SMS)  0,04 0,09 
Quantities (m SMS)  10.160,72  9.557,90  
Revenues (m €)  439,15  859,35  
Costs (m €)  557,93  524,94  
Profits (m €)  -118,78  334,41  
 
Data     
  OPTION 2.b.  OPTION 3.c  
Prices (€/MByte)  0,34 0,69 
Quantities (m MByte)  1.638,44  1.505,53  
Revenues (m €)  550,49  1.043,13  
Costs (m €)  356,59  325,85  
Profits (m €)  193,91  717,29  
 
  OPTION 2.b.  OPTION 3.c  
Consumer surplus (m €)  6.323,50  3.656,7394 
Total profits (m €)  -4.901,99  -2.373,19  
Welfare (m €)  1.421,51  1.283,54  
Table 22: Overview of the model outputs at EU and service level, accumulated (over the 
relevant period 2012-2014) fo r each regulatory option 
Assessment of the economi c impact under each option  
To put the figures presented a bove into perspective,  the estimated producer and consumer 
surplus95, as well as the resulting soci al welfare, are compared to  the total retail turnover of 
the roaming segment corresponding to the year 200996.  
                                                 
94 The consumer welfare impacts calculated for this  option constitute a conservative minimum and the 
actual welfare benefits are likely be higher (taking into account the benefits of increased competition 
which will arise from this option). 
95 Producer and consumer surplus va riation of each regulatory optio n against the baseline scenario 
96 Figures as of 2009 BEREC data employed in the economic model.  
 
EN 95   EN ANNEX IV – ECONOMIC MODEL  
Description of the Economic Model for the determination of the economic impact (Social 
Welfare) of each regulatory option  
This section provides a general description of the architecture and main assumptions 
employed in the economic model that determin es the social welfare for each regulatory 
option. The results of the economic  model have been presented in section 5 of this document. 
General architecture of the Techno-Economic Model 
Model structure 
The model structure is outlined in the following diagram: 
 
Figure 6: Overall structure of the economic model 
Given the available data, the general structure of the model has been maintained from the 
formerly proposed. In particular, with the av ailable per-country data on roaming volumes and 
revenues we have been able determine changes in prices, consumption and financial in- and 
outflows on a per-country basis. We have not be en able, though, to determine pair-wise flows 
between countries or operators due to the ab sence of sufficiently disaggregated data. 
As concerns modelling inputs (the red boxes in ), we have the following further comments: 
(2) Institutional settings: “Roaming hubs”, netw orks that function as intermediaries 
between multiple roaming partners, are the only significant new development. The introduction of these Roaming Hubs makes it unnecessary for hub client networks to 
negotiate and conclude multiple bilateral roam ing agreements. Even so, it is not clear 
 
EN 96   EN as of yet whether apart from increased effi ciency especially for small operators these 
hubs will change competitive conditions at either retail or wholesale level.  
(3) Customer choice behavior: The WIK final repo rt indicates clearly that the majority 
of roaming customers gives little attention to  roaming when they chose their contract, 
and that they also do not search actively for substitutes. This observation has been used as a model input, that is, we ha ve explicitly modeled this fact and its 
implications for roaming price setting. 
(4) Technological developments: We have main tained the model assumptions at the 
current technological framework (includi ng traffic redirection). Dual-SIM phones 
and other options involving active search by customers but which would be made 
possible through changes in technology or im plementation, especially in the visited 
country, have been discar ded in the WIK report. 
(5) Service substitutes: Substitutes away from voice / SMS / data roaming have been 
discounted in the WIK report. Therefore we have concentrated on the potential 
substitution between voice calls, SMS and da ta roaming (non-zero cross elasticity). 
(6) The other parts of the structure are affected  by data availability as discussed below. 
Modelling methodology 
The economic model estimates the effects at Memb er State level and then the EU total effect 
is calculated as the aggreg ate of the country values.  
Our roaming market model follows the modeling tradition of Laffont Rey Tirole (1998a/b), 
simplified where possible to reduce the additiona l complexity created by the introduction of 
roaming services into the modeling framework, and be adapted to a setting with: 
• All 27 countries, in order to cap ture cross-national impacts; 
• Multiple mobile network operators in each country; 
• Sensitivity analysis concerning customer choice behavior and roaming network 
selection. 
The model has been calibrated with data abou t demand, traffic flows, institutional and 
technical details, based on BERE C data and other information that we have received. The 
calibration of demand is based on an economet ric estimation of EU-wide own- and cross-
elasticities of demand for voice calls made and received, SMS and data. Since there is no 
country-specific cost data, we have used a co mmon set of cost parame ters for all countries. 
Qualitative information about in stitutional details, the existi ng regulation and technology has 
also been taken into account. 
The output of the roaming market model is  both conceptual and provides quantitative 
indications of how roaming reta il pricing could evol ve in different regul atory settings. We 
have obtained results on in- and outflows per country (while the ava ilable data provide no 
information on flows between country pairs). 
Treatment/Differentiation of serv ices (i.e. voice, sms, data) 
 
EN 97   EN SMS and data services have been included in the quantitative assessmen t alongside voice calls 
made and received. We have determined th e quantity, price and welfare effects of the 
different regulatory options for each serv ice in each country. Moreover, substitution 
relationships between these three types of serv ices have explicitly been taken into account. 
We have estimated econometrically a set of EU -wide own- and cross- demand elasticities for 
voice calls made and received, SMS and data. These are four own-elasticiti es and (essentially) 
six cross-elasticities, four of which have b een found not to be significantly different from 
zero. 
Modelling assumptions  
We describe in this section the main assumptions  of the model, related to its parameterization 
(i.e. status quo, pricing and co sting), time period and demand.  
In accordance with the availabil ity of country data, modelling assumptions have been made 
either at EU level or at Member State level.  
Assumptions at EU level  
EU-specific parameters that are taken into cons ideration can be classified into the following 
main categories: 
– DEMAND, function parameterized on th e basis of a common EU own- and 
cross-elasticity estimation 
– PRICING when homogeneous across EU  Member States, depending on the 
regulatory option estimated on the basis of  the price caps and other relevant 
factors such as the market equilibrium  
– COSTING when homogeneous across EU Me mber States, all services except 
for incoming calls (calls received), dete rmined as indicated in the Annex VI 
“Breakdown of Roaming services” 
We describe below the main assumptions and da ta constraints behind these three different 
parameter categories determined at EU level. 
1. Demand  
Due to the small number of observations per count ry (13 quarters) it is not possible to reliably 
estimate the set of own- and cross-price elasti cities, which involves 10 parameters to be 
estimated, at the country level. Therefore we  have opted to econometrically estimate a 
common set of elasticities for all Member States, controlling for country effects.  
2. Pricing  
In the options which include reta il or wholesale price caps the same cap is used for all EU 
countries. Furthermore, due to the complexi ty and uncertainty in capturing wholesale 
arrangements, the setting of market-determined wholesale prices has be en captured by an EU-
wide parameter. Market-determined retail prices, though, will differ between countries. 
 
EN 98   EN  
3. Costing  
A set of EU-wide wholesale and retail network and commercial cost values has been used. 
Total retail cost, including wholesale paym ents, on the other hand, may differ between 
countries due to differences in foreign wholesale prices. 
Assumptions at Member State level  
The economic model distinguishes, in general terms, 27 “Roaming Economies” 
corresponding to and calibrated separately for each EU Member State. In other words, the 
differences across countries in market outcome s (retail / wholesale tr affic and prices) and 
roaming balances are taken into consideration to the maximum extent permitted by the quality 
and granularity of the data. 
Country-specific parameters that  are taken into consideration can be classified into the 
following main categories: 
– STATUS QUO at retail and wholesale leve l (as of 2009, latest full calendar year 
available) 
• Traffic data; volume per service 
• Revenue data; Average Re venue Per Minute/SMS/MB 
– DEMAND function parameterized on the basi s of country specific intercepts and 
slopes 
– PRICING when heterogeneous across EU  Member States, depending on the 
regulatory option estimated on the basis of the price caps and other relevant factors 
such as the market equilibrium  
– COSTING when heterogeneous across EU Me mber States, such as the cost of 
incoming calls (calls received), the MTR level is determined according to the 
estimated glide-path from current nationa l situation to a EU convergent value of 
2cEUR in 2014. 
We describe below the main a ssumptions and data constraints behind these four different 
parameter categories determined at Member State level. 
1. Status quo 
The calibration of the economic  model has been based on c ountry-specific volumes and 
revenues of 2009, the last full year  available, both at the whol esale and retail levels. These 
volumes and revenues are avai lable separately for roaming voice calls made, roaming voice 
calls received, SMS and data. 
Due to the lack of data on pairwise traffic flows between countries, we had to adopt the 
assumption that wholesale volumes in each coun try correspond to a fixed service-dependent 
share of the correspondi ng EU-level predicted retail volume.  This service-dependent share has 
been set equal to the corresponding shares in 2009. 
 
EN 99   EN Since BEREC has not collected any data on the wholesale volumes of received roaming calls, 
whose wholesale price is the “normal” MTR, we have made the forward-looking assumption 
that MTRs are equal to the cost of mobile te rmination involved, as indeed follows from the 
EC Recommendation on MTRs. This assumpti on implies that the corresponding wholesale 
profits are zero, so that not knowing the volum es has no further impact on the welfare 
estimates. 
2. Demand 
Each country is characterized  by a set of aggregate linear  multi-product demand functions, 
which has been calibrated based on a set of demand  elasticities that is common at EU level 
and country-specific volumes and revenues for 2009. 
3. Pricing 
Market-determined roaming retail prices, as pr edicted by the economic model, are calculated 
separately for each country based on the country-specific demand system and country-specific 
total retail cost. If price caps are in force, th e market price is assumed to be the minimum of 
the price cap and the market-determined price. 
4. Costing 
While network and commercial wholesale and re tail costs are assumed to be at a common 
level across the EU, the wholesale component of  total retail cost is country-specific. This 
applies as much to the IOT for voice calls made, the MTR of voice calls received, and the 
wholesale prices for SMS and data. More precisely, for each service and country, the 
corresponding wholesale component of retail cost is a ssumed to equal to the weighted average 
of the wholesale prices in th e other countries, where the wei ghts are the wholesale traffic 
shares mentioned above (rescaled as only to apply to foreign countries). 
Inputs of the Economic model  
General Demand Inputs: 
The data employed in the calibra tion of the techno-economic m odel are the following, all per 
country for the year 2009 and obtained from ERG and BEREC: 
• Retail volumes and revenues of voice calls made 
• Retail volumes and revenues of voice calls received 
• Retail volumes and revenues of SMS 
• Retail volumes and revenues of data roaming 
• Wholesale volumes and revenues of voice calls made 
• Wholesale volumes and revenues of SMS 
• Wholesale volumes and revenues of data roaming 
Further data, including the whole data series for retail volumes and revenues, has been used in 
the econometrical estimation of th e set of demand elasticities. 
 
EN 100   EN Other Inputs: 
The rest of the main inputs used for estima ting economic impact of the different roaming 
regulatory options are presented bellow. 
Main model inputs
Demand own- and cross elasticities
Source: Estimations based on BEREC and EUROSTAT data
Elasticity data Call made Call received SMS Data
Call made -0,27 0,05
Call received -0,24 -0,09
SMS -0,24
Data 0,21 -0,13 -1,23
Market efficiency parameters
Option 1 1 July 2012 1 July 2013 1 July 2014
Attentiveness 0,15 0,15 0,15 0<="gamma"<=1, 
Traffic concentration 0,50 0,50 0,50 1/81 <= omega < =
Option 4 1 July 2012 1 July 2013 1 July 2014
Attentiveness 0,33 0,47 0,60 Increase of attent i
Traffic concentration
Option 5 1 July 2012 1 July 2013 1 July 2014
Attentiveness 0,24 0,31 0,38 Wholesale access 
Traffic concentration
Cost data
Euro per minute 1 July 2012 1 July 2013 1 July 2014 Unit
Retail voice calls made 0,0542 0,0542 0,0542 €/min
Retail voice calls received 0,0534 0,0534 0,0534 €/minRetail SMS 0,0283 0,0283 0,0283 €/message
Retail data 0,0200 0,0200 0,0200 €/MByte
Wholesale voice calls made 0,0542 0,0542 0,0542 €/min
Wholesale SMS 0,0081 0,0081 0,0081 €/message
Wholesale Data 0,0800 0,0800 0,0800 €/MByte
 
Mobile termination rates EU (wA)
MTR (€/min, 2009 average) 0,06
2010 0,05
2011 0,04
2012 0,03
2013 0,03
2014 0,02
MTR (€/min, forward-looking) 0,02 
 
EN 101   EN ANNEX V 
THEORY FRAMEWORK FOR THE DETERMINATION OF UNREGULATED RETAIL 
AND WHOLESALE ROAMING PRICES  
 
 
EN 102   EN 
 
 
EN 103   EN 
 
 
EN 104   EN 
 
 
EN 105   EN Econometric analysis for the determination of  the own- and cross-elasticity of roaming 
services 
– Econometric estimation of demand elasticities  
In order to perform quantitative estimates of  the welfare effects of changing the existing 
Roaming Regulation in the Economic Model, an econometric estimati on of EU-wide demand 
elasticities for the four services “roaming ca lls made”, “roaming calls received”, “roaming 
SMS” and “data roaming” was performed. In order to be consistent with welfare calculations, 
a system of four demand equations, each for one of the services just mentioned, was estimated, with cross-equation constraints that  guaranteed Slutsky symmetry at the sample 
mean. 
The data used are the following, with the origin mentioned in parentheses: 
• Aggregate quarterly actua l retail demand volumes
97 (calls made and received, 
SMS, data) by country, 2007Q2 – 2010Q2 (BEREC) 
• Aggregate quarterly retail revenues (cal ls made and received, SMS, data) by 
country, 2007Q2 – 2010Q2 (BEREC) 
• Aggregate quarterly wholesale revenues (calls made, SMS, data) by country, 
2007Q2 – 2010Q2 (BEREC) 
• Mobile subscribers by country, 2007Q2 – 2010Q2 (BEREC) 
• Mobile termination rates, 2007 – 2010 (ERG, BEREC) 
• Onset of regulation at retail level ( calls made and received, SMS) (Roaming 
Regulations) 
• GDP per capita, 2007Q2 – 2010Q2 (EUROSTAT) 
• Arriving airline passengers, 2007Q2 – 2010Q2 (EUROSTAT) 
The data series therefore is a panel of 27 countries over 13 periods, which constitutes a small 
and relatively short panel. Account has been take n of the panel nature of the data by including 
country fixed effects. The estimations were performed in Stata using the “reg3” command. 
In each equation, the corresponding logarithm of demand volume per subscriber was 
regressed on a set of explanatory variables, which included: 
• The logarithms of average revenues for calls made, calls received, SMS, data; 
these are a proxy for retail prices, and the resulting coefficients provide the 
elasticity estimates. 
• GDP per capita and arriving airline passengers, in order to control for the 
economic cycle and travel demand variations. 
                                                 
97 Actual rather than billed units have been used in order to improve the accuracy of the estimates and the 
economic model. This has also been indicat ed in the Impact Assessment of 2008. 
 
EN 106   EN • Seasonal quarter dummies, in order to control for seasonal variation. 
• Country dummies, in order to control for country fixed effects. 
Since in the unregulated market equilibrium pr ice and demand are jointly determined, special 
care had to be taken to deal with the resulting endogeneity of the proxy for retail prices (average revenues), which would otherwise ha ve produced econometrically inconsistent 
estimates. At the same time, the onset of retail  price regulation, which occurred first for calls 
made and received and later for SMS, had to be correctly modelled.  
Thus in our estimation we have used an inst rumental variable method, with the following 
instruments: 
• Foreign wholesale revenue per unit (cal l minute received, SMS, MB of data); 
this defines the underlying wholesale co st component and is therefore an 
excellent instrument for the retail prices of calls made, SMS and data. 
• Average foreign mobile termination rate; this defines the underlying wholesale 
cost component and is therefore an excel lent instrument for the retail price of 
calls received. 
• Retail prices themselves after a retail cap was imposed, implemented as 
interactions with the co rresponding regulation dummi es; since these retail 
prices remained at the cap during the sample period they can be considered 
exogenous while regulated, and includi ng them as instruments during the 
regulated period increases the efficiency of the estimation. 
– Interpretation of estimated demand elasticities
 
The estimated demand elasticities are the following: 
ECONOMETRIC ESTIMATES 
Price of calls made Price of calls received Price of SMS Price of data
-0.27   0.05 
 -0.24  -0.09 
  -0.24  
0.21 -0.13  -1.23 
Source: own calculations (all values significant at a 5% confidence level) 
The own-demand elasticities, i.e. those that measure the effect the change in the demand of a 
service after a change in its own price, are found on the diagon al. The cross-pr ice elasticities, 
which measure the effect of prices of other serv ices on demand, are reported  in the rest of the 
 
EN 107   EN table. Only estimates which are statistically different from zero at a 5% confidence level are 
reported here and have been used in the Economic Model.98 
The own-price elasticity estimates for calls made (-0.27) an d calls received (-0.24) are at the 
low end of the expected range (-0.2 to -0.5). Th is implies that the demand for voice calls, both 
made and received, is rather inelastic at the prices observed. This  may be explained by 
customers only making or receiving calls if some  specific need arises. These estimates are in 
accordance with those predicted in the WIK-C onsult, “Study on the Options for addressing 
Competition Problems in the EU Roaming Ma rket” (December 2010), section 4.2.2, but are 
smaller than the “pessimistic” values cons idered in the 2008 Impact Assessment (-0.55). 
A similar result holds for the own-demand elastic ity of SMS, which is also found to be quite 
low at -0.24. Again this implies that custom er send SMS while roaming only if they have 
some urgent need to communicate. On the othe r hand, as expected the own-price elasticity of 
data roaming is in the elastic range, though not very  far, at -1.23. That is, data usage is rather 
sensitive to retail prices; if the latter were  to fall a significant increase in demand might 
follow. 
As concerns cross-price effects, the elasticity  estimates indicate that there is a small but 
statistically significant substitution between maki ng voice calls and using data. This effect 
may have arisen due to the increasing usage of mobile email or VOIP communications, which 
are both substitutes to voice calls, but from the sample data we cannot identify the exact 
cause. Furthermore, calls received and data ro aming have also been found to be weak but 
statistically significant demand complements, i.e.  usage of both services tends to increase if 
the price of either service falls. 
On the other hand, there is no statistically sign ificant substitution between voice calls made 
and received, or between SMS an d the three other se rvices considered. Note that the 2008 
Impact Assessment, which used guessed values rather than econometric estimates, considered 
different scenarios for own-price elasticities, but assumed that all cross-price elasticities were 
zero in all of these scenarios. 
Overall the estimated elasticity values fall in  the expected range and indicate that demand and 
welfare analysis for “roaming calls made”, “roaming calls received”, “roaming SMS” and 
“data roaming” need to take into account that these are not independent services. 
                                                 
98 The strongest of the remaining estimates was signifi cant only at a 16% significance level, while the 
others were highly insignificant. 
 
EN 108   EN ANNEX VI 
BREAKDOWN OF ROAMING SERVICES  
For each of the three roaming services, th e following paragraphs present a schematic 
overview of the traffic routing and network co mponents used as well as the production cost 
related to these network compone nts. Further estimates regard ing the underlying costs can 
also be found in the BEREC report “International Mobile Roaming Regulation”  of December 
2010. 
VOICE ROAMING  
THE ROAMING CUSTOMER IS MAKING A CALL  
The illustration below presents how a call originated from a roaming customer is routed and 
how these routes can be broken down in different components: 
 
HOME COUNTRY 
HOME NETWORK OPERATOR 
OTHER OPERATOR  
(FIXED OR MOBILE)  
IN HOME COUNTRY VISITED COUNTRY 
VISITED NETWORK 
OPERATOR BTS 
OTHER OPERATOR  
(FIXED OR MOBILE)  
IN VISITED COUNTRY 
OPERATOR (FIXED OR MOBILE )
IN THIRD COUNTRY 
Usage of network components: 
Call originating on the visited network 
Transit to the destination country (if other than visited country) 
Call termination on the called network (mobile or fixed) THIRD COUNTRY 
For the traffic routing, the assumption was take that direct routing between networks is always possible.  Only 
the signalling is systematically passed through to the home network. Possible scenario's for a roaming customer making a call (voice roaming) 
Roaming customer of  
home network operator 
 
The costs are based on the BEREC Report “I nternational Mobile Roaming Regulation” 
(December 2010). The wholesale and retail wholesal e tariffs relate to the caps applicable at 
the end of the current regulatory period.  
 
EN 109   EN Network components used by a 
roaming customer making a callProduction cost incl. overhead 
(in cEUR)Retail tariff
Source: BERECin cEUR
per minin cEUR
per min
Call Originating on the visited 
network
(Proxy used = national MTR)3,18
Transit to the destination 
network (if applicable)-
Call termination on the called  
network (mobile or fixe)1,54
Sales and common costs 13%
Total production costs 5,42
18
17
94,4%Wholesale payment flows
35The home network operator 
pays an IOT to the visited 
network operator to cover the 
costs of the originating and 
terminating leg, incl. transit if 
applicable, as well as costs for 
signalling to the respective 
(mobile or fixe) operators.
Part of the IOT is than 
transfered by the visited 
network operator for covering 
the transit and terminating 
costs.18
Total cost for home network operator
Margin on retail roaming tariff (in cEUR per min)
Mark-up on wholesale tariff 
THE ROAMING CUSTOMER IS RECEIVING A CALL  
 
At the wholesale level, the home country operato r will receive a mobile  terminating fee from 
the operator on whose network the call was orig inated. The operator in the visited country 
then receives an (international) te rminating fee from the home operator. 
At the retail level, the calling party pays for the call originating leg. The customer receiving 
the call furthermore pays the home operator for recovering the difference between the mobile 
termination fee the home operato r has received and the fee it pa id to the visited operator, 
including a contribution to th e sales and common costs. 
 
EN 110   EN SMS Roaming  
THE ROAMING CUSTOMER IS SENDING AN SMS 
 
HOME COUNTRY 
HOME NETWORK  
OPERATOR 
OTHER OPERATOR  
(FIXED OR MOBILE)  
IN HOME COUNTRY VISITED COUNTRY 
VISITED NETWORK  
OPERATOR 
OTHER OPERATOR  
(FIXED OR MOBILE)  
IN VISITED COUNTRY 
OPERATOR (FIXED OR MOBILE) 
IN THIRD COUNTRY THIRD COUNTRY 
For the traffic routing, the assumption was take that all SMS are first directed to the SMS Center of the home 
network operator. Possible scenario's for a roaming customer sending an SMS (SMS roaming) 
SMSC 
Roaming customer of  
home network operator 
SMS Center 
Usage of network components: 
Call originating on the visited network 
Transit to the home network operator (and the destination country 
if other than home country) 
Call termination on the called network (mobile or fixed) Reception and handling of SMS 
 
Network components used by a roaming 
customer for sending an SMSRetail 
tariff
in cEUR 
per SMSin cEUR 
per SMS
SMS Originating on the visited network 
(*)
International transit to the home network  
(if applicable)  
I.e. until POI
Reception and handling of SMS
Transit to the destination network (if 
applicable)
SMS termination on the destination 
network
Sales and common costs
Total production cost 
Total costs for home network operator
Margin on retail roaming tariff for sending SMS (in cEUR) 7,0
Mark-up on wholesale tariff 175,0%0,81 - 2,67The home network 
operator pays an IOT to the 
visited network operator 4,0
0,71 - 2,32
13%
(*) To the cost of this network component, a cost will also be allocated for compensating the fact that no costs can be 
recuperated by the visited country when the roamer is receiving an SMSProduction costs 
incl. overhead
(in cEUR)Wholesale payment flows
11Source: BEREC
 
 
EN 111   EN Again, the costs are based on the BEREC Report “International Mobile Roaming Regulation” 
(December 2010). The wholesale and retail wholesal e tariffs relate to the caps applicable at 
the end of the current regulatory period.  
THE ROAMING CUSTOMER IS RECEIVING AN SMS 
The costs related to a roaming customer r eceiving an SMS only consist of a cost for 
terminating on the visited network. No recupe ration of this cost by the visited network 
operator is foreseen (cf. inclusion of a termin ating cost in the orig inating cost component 
when sending an SMS).As the SMSs are routed directly to the visited network, no costs are 
incurred by the home network. No settlements are made between operators. 
DATA ROAMING  
Sending or downloading data via the usage of th e Internet does not involve a termination to 
another end-user. By conseque nce, no distinction needs to be made between the production 
cost of both sending and receiving data. 
 
HOME COUNTRY 
HOME NETWORK  
OPERATOR 
HOME NETWORKS INTERNET 
SERVICE PROVIDER (ISP) VISITED COUNTRY 
VISITED NETWORK  
OPERATOR 
INTERNET Network usage by a roaming customer downloading and sending data (data roaming) 
GGSN Upload Download 
GGSN GRX GRX 
POI 
Usage of network components: 
International transit by GRX providerData traffic on the visited network 
Traffic handling on the home network Roaming customer of home network 
operator 
Gateway GPRS Support Node (GGSN)
GPRS Roaming Exchange (GRX)
 
 
EN 112   EN Network components used by a roaming 
customer for receiving and sending dataRetail 
tariff
in cEUR 
per MBin cEUR 
per MB
Data traffic on the visited network 
International transit up to the GRX provider 
nearest to the home network
Share for the visited network operator
International transit up to the GRX provider 
nearest to the home network
Share for the home network operatorThe home operator pays the 
GRX provider for the home 
network's share of the 
international transit
Handling of data traffic on the home 
network (via GGSN)Internal costs of home 
network operator
Provision of access to the Internet (ISP)Homer operator makes 
payment to the ISP
Sales and common costs
Total production cost 
Total costs for home network operator 36,40
Margin on retail roaming tariff for sending / receiving 1 MB (in cEUR) 100,60
Mark-up on wholesale tariff 276%Production costs
incl. overhead 
(in cEUR)Wholesale payment flows
Source: BEREC
The home network operator 
pays an IOT to the visited 
network operator 36,40
7,03 - 13,05
137,00
13%
8,08 - 14,99
 
The assumptions taken for the wholesale cost (36,40cEUR) and for the retail tariff (1,37EUR) 
correspond to the average EU ta riffs applicable in Q2 2010.