EUROPEAN COMMISSION 
Brussels, 6.7.2011 
SEC(2011) 871 final 
  
COMMISSION STAFF WORKING PAPER 
EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 
{COM(2011) 407 final} 
{SEC(2011) 870 final}  
 
EN 2   EN COMMISSION STAFF WORKING PAPER 
EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 
 
Accompanying the document  
THE COMMISSION’S REVIEW OF THE F UNCTIONING OF REGULATION (EC) 
N° 544/2009 OF THE EUROPEAN PARLIA MENT AND OF THE COUNCIL OF 18 
JUNE 2009 
ON 
ROAMING ON PUBLIC MOBILE TEL EPHONE NETWORKS WITHIN THE 
COMMUNITY 
1. BACKGROUND   
This impact assessment (IA) report examines options arising from the review of the 
functioning of the Roaming Regulation1. It examines whether it is necessary to extend 
regulatory intervention beyond its expiry date of 30 June 2012 and the options for any such 
intervention. 
The Commission has been monitoring developm ents in the roaming market since the 
amended Roaming Regulation came into eff ect on 1 July 2009. Public consultation was 
launched on 8 December 2010 seeking views on the review of the Roaming Regulation. The 
Commission adopted an Interim Report on 30 June 2010. This Report found that the 
Regulation had been implemented well but that competition had not yet developed.  
2. PROBLEM  DEFINITION   
Before regulatory intervention roaming prices were excessive and were  not justified by the 
underlying costs of providing the services. Th e current and previous Roaming Regulations 
aimed to eliminate the excessive prices and to stimulate competition. Price levels have fallen 
in the last few years, but this is mainly due to  the effects of regulati on of prices and not the 
result of emerging forces of competition. The ma rgin between wholesale and retail prices in 
absolute terms has remained constant or has slightly declined. This means that the margin in relative terms has risen. Average EU tariffs remain close to the price caps defined by the Regulation. These developments suggest that th e roaming market is not yet competitive.  
Market and technologic al developments 
While there are a number of partial subst itutes for roaming services, these should be 
considered as a complement  as they do not put competitive pressure on the roaming market. 
Development of new networks (e.g. LTE) allowi ng higher capacity and possibly leading to a 
more intensive use of data canno t be expected to bring down re tail prices in the absence of 
pro-competitive structural measures.  
Underlying causes 
                                                
 
1 OJ L 171 of 29 June 2007 p 32-40 
 
EN 3   EN At the wholesale level bilateral negotiations between operators are greatly affected by the 
amount of traffic that the other operator will in  return steer onto the other operator’s network 
which has the effect of limiting competition. At  the retail level, there are little or no 
substitutes to roaming. Another cause of conc ern in the retail market  is the limited demand 
elasticity for bundled roaming services. Users ar e not concerned about the price of roaming 
when they purchase a bundle of mobile serv ices which means that  operators are not 
competing on the basis of this element of th e mobile bundle. There is also a lack of 
transparency, since comparison of roaming tari ffs within bundles of m obile services is a 
complex and time-consuming task.  
3. IS  EU ACTION  JUSTIFIED  ON  GROUNDS  OF SUBSIDIARITY? 
Regulatory intervention at EU level is required because of the cross-border nature of the 
international roaming market the NRAs cannot tackle the problem of high prices at the 
national level. Since individual Member States have no incentive to regulate in a way that 
takes into account the possibl e effect of its regulation on the other Member States, an 
intervention at the EU level is preferable as this would better take into account the general 
interest of all EU Member States. A European approach would avoid that Member States take 
divergent approaches for dealing with the problem of high prices, which would create 
obstacles to the Internal Market.  
On the basis of Arti cle 114 of the Treaty2, the European legislator  has already adopted two 
Regulations in 2007 and 2009. Although the legal ba sis for these Regulations was contested 
by some mobile operators, the European Cour t of Justice (ECJ) recently confirmed the 
validity of the application of Art 95 TEC3 as legal basis for the 2007 Regulation4. In the same 
judgment, the ECJ also considered and confirme d the subsidiarity and the proportionality of 
the European legislator’s action.  
4. OBJECTIVES 
One of the building blocks of EU 2020 strategy is the new Digital Agenda for Europe (DAE)5 
which defines a number of the ‘Key Performan ce Targets’ for attaining the Digital Single 
Market. In relation to roam ing, the target is that ‘the difference between  roaming and national 
tariffs would approach to zero by 2015’6. This target can be considered to be met if 
competition allows consumers to access roaming charges which are approaching competitive domestic level prices. In that context thr ee general policy objectives can be identified: 
• The first relates to ensuring the devel opment of a single coherent regulatory 
framework, contributing to the developmen t of the internal market . 
• The second relates to stimulati ng and strengthening sustainable competition  in the 
Digital Single Market.  
                                                
 
2 Previous Art.95 TEC 
3 See New Art. 114 Treaty on the functioning of the European Union 
4 See Case C-58/08: Judgment of the Court of 8 June 2010 
5 See http://ec.europa.eu/information_society/digital-agenda/index_en.htm. 
6 See Annex 2 of the Digital Agenda for Europe 
 
EN 4   EN • The third general objective is to promote the interest of citizens , in particular by 
ensuring a high level of consumer protection  in the EU. 
The IA also defines a range of specific and operational objectives which support the above 
general objectives. Policy options are assessed ag ainst their ability to achieve these objectives. 
5. POLICY  OPTIONS 
This IA considers a variety of policy options for addressing the issues identified in the 
previous section. It should be noted that struct ural measures aim to tackle the underlying 
causes of high roaming charges i.e. to stimulat e greater competition. St ructural measures can 
include measures to facilitate market entry or  measures which enhance consumer choice by 
allowing them to purchase roaming as a separate  service. Pure price capping does not improve 
competition in the roaming market and, while protecting consumers for a certain period of 
time, leaves the underlying problems unresolved and would most likely have to be repeated 
after the next regulatory peri od. The policy options for consid eration in this IA are:  
1. No regulation 
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): 
(a) Continuation à l’identique  with the same price caps; this scenario is considered 
as a 'baseline' scenario.  
(b) Extension of the current model with adju sted annual price caps and with retail 
data roaming price caps; this option involves a steep er glide path than the 
current Regulation, leading to retail prices  which are close to domestic prices. 
(c) Roam-Like-Home/Roam-like-a-Local with fixed mark-up; this is a form of 
price capping whereby a regulated mark-up to cover roaming wholesale and retail costs is permitted to be added to domestic prices (either in the customer's 
home market or in the visited market). 
3. Structural solution - introduction of a combination of 2 or 3 new elements at the 
wholesale and retail levels: 
(a) Decoupling - a structural measure at the retail level. Custom ers would be able 
to purchase roaming services from anot her operator than the provider of the 
domestic services.  
(b) granting access to mobile virtual network operators (MVNOs)
7; Option relates 
to the introduction of a structural m easure at the wholesale level, allowing 
MVNO roaming access to specific levels of wholesale charges.  This can 
operate as a 'stand-alone' option or in conjunction w ith 3(a) above.  
                                                 
7 And mobile network operators wishing to enter new markets 
 
EN 5   EN (c) the above (a and b) combined with sa feguard price caps for a period of time. 
The unbundling measure combined w ith MVNO access is assumed to 
introduce competitive pressure in the retail market. 
4. Spot market  
It is a trading mechanism aimed to remove the current barrier related to the fact that the 
volume of roaming traffic that an operator ca n offer in return, largely determines the 
wholesale prices in the wholesale inbound market . This option could lead to cost oriented 
wholesale prices for all roaming traffic and all operators. It is not expected that the drastic 
change in the roaming market structure would be  beneficial to the Eur opean industry since it 
would be unsure if the advant ageous offers by multi-country al liances would still be possible 
once all of the national partners  of these alliances would need  to pass via the spot market. 
Establishing a spot market would not  bring competition at retail level. 
6. ASSESSMENT  OF IMPACTS 
All of the policy options are first subjected to a qualitative assessment against the objectives. 
A shortlist of options is then drawn up and each of  these is subjected to a quantitative analysis 
using an economic model to assess the eff ects on industry profits, consumer surplus and 
overall welfare. Cost benefit analysis is  carried out on the short listed options.  
Qualitative analysis 
Option 1 No regulation 
In the case of expiry of the current Regulation, the lack of competition at the wholesale and at 
the retail level indicates that prices will not de crease. They are much more likely to increase 
due to a reduced number of operators able  to actually compete on the retail market. 
Option 2a Continuation with the current prices caps  
The baseline scenario would focus on preven ting excessive retail tariffs while ensuring 
transparency of roaming charges and preventing ‘bill shock’ for data roaming services. However consumers would not experience the benefits of lower ro aming charges which 
should arise as a result of declining costs and will continue to face the risk of excessive retail 
data roaming prices. The current regulatory appr oach does not deal in a structured way with a 
number of barriers at both th e wholesale (inbound and resale) market and retail market.  
Option 2b Extension of the current model with  adjusted price caps and with retail data 
price caps 
This approach would lead to an automatic redu ction of retail prices for voice, sms and data 
roaming, for the period concerned, at levels ap proaching domestic level prices. This would 
ensure a high level of consumer protection. On the other hand, this approach does not promote 
competition in the internal market and does not therefore address the underlying structural problems. This approach does not allow a sustai nable long term solution and is likely to have 
to be repeated after the expiry of the next regulatory period.  
Option 2c Roam-Like-Home/Roam-lik e-a-Local with fixed mark-up 
 
EN 6   EN While doing very little to promote competition in  the provision of roaming services since they 
do not address underlying structural issues, these methods ensure that the benefits of domestic 
retail competition are automatically passed throug h to roaming users. While this would lead to 
lower prices than are typical at present for some consumer segments, overall the option has less advantages compared to Eurotariff price caps (in Option 2b above) as regards bringing 
roaming prices closer to domes tic levels for all consumers.  
Option 3a: Decoupling 
It is expected that this option could allow the problems of lack of competition and limited 
consumer choice to be tackled. However it will take some time to implement this solution which suggests that the contin uation of safeguard retail price caps may be necessary. 
Decoupling alone may not create the conditions fo r new entry to the roaming market. It may 
therefore need to be accompanied by access obligations (see Option 3b below).  
Option 3b: Access obligation at regula ted prices for wholesale roaming 
This could boost competition by leading to the de velopment of pan-European virtual networks 
and could enable them to offer the same ro aming tariff plans to cu stomers in different 
countries. It is expected that Option 3b woul d have a positive impact on competitive market 
conditions, at least at the wholesale level. However the chances of boosting competition are 
increased significantly if this option is combined w ith retail structural ob ligations (Option 3a).  
Option 3c: Decoupling/access oblig ation /safeguard price caps 
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. Such a combination woul d enhance competition and would not require 
stringent retail price caps to get lower prices for the consumers. Howe ver, given that this 
solution will take time to implement, it would be appropriate to keep safeguard retail caps for 
a period of time, set at a sufficiently high leve l to leave room for co mpetition, to ensure a 
safety-net for consumers until the unbundling m easures have had an opportunity to become 
fully operational and eff ective. This solution would tackle  the underlining roaming problems 
and allow a sustainable competitive solution to the roaming without the need for long term 
price regulation.  
Option 3d: Spot market  
This option does not enhance retail competition a nd, therefore, provides no guarantee that that 
roaming prices would be aligned to the domes tic charges of the different Member States. 
When stacked against the highly uncertain benefits of this approach, it is considered that this 
option is unlikely to meet the objectives in  an effective or proportionate manner.  
Quantitative analysis 
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. For the assessment of the economic impact, a 
detailed economic model has been developed. The aim of this model is the determination in 
the aggregate and for each country the effect of different regulatory options on roaming 
quantities and revenues, consumer and producer  surplus, and total social welfare.  
 
EN 7   EN Options 2b and 3c involve the application and re moval of price caps at  different times. To 
simplify the comparison, the quantitative effects of  these options have been calculated with 
regard to the respective reta il caps, without taking into acco unt the downward pricing effect 
arising from additional competition under option 3c.  
The significant negative impact of removing regul ation (Option 1) can be clearly identified. 
This is primarily due to the cu rrent lack of competition at bo th the wholesale and the retail 
levels. Options 2b and 3c involv e a positive and comparable gain  of social welfare. These 
options have in common that consumers would benefit from a retail data price-cap, in addition to the existing price-cap for the rest of servic es. Option 3c is expected to deliver similar 
results to Option 2b albeit wit hout long term price regulation. It should be mentioned that 
Option 3c is based on a less strict price-cap approach, leaving space for market forces to 
determine prices. 
The general finding of low elasti city for roaming services, excep t for retail data, implies that 
the effects on total welfare are small, and therefore the differences between these options are 
also small since reductions in prices only impl y that consumers pay less for roughly the same 
consumption - that is, create a transfer from fi rms to consumers. However, this may change 
due to the expected growth of data, as lower data roaming prices are expected to lead to 
higher data roaming consumption. 
Administrative costs 
Option 1, 2a and 2b would not result in significan t incremental costs sinc e these either involve 
no regulation or the continua tion of the status quo - the costs of compliance and the 
administrative costs are the same as those alread y being incurred. Option 3c will take time to 
implement since there is a number of technical, security and routing issues to be dealt with 
through collaboration of the Commission, BERE C, operators, and possibly standardization 
bodies. On the other hand, once the structural solution is in place and retail price caps are 
lifted, the costs of monito ring and compliance are expected to decrease.  
7. COMPARISON
 OF OPTIONS 
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, allowing lower prices for consumers, while keeping safeguard price caps for a certain  period, in order to ensure a degree of consumer protection 
until the unbundling measure have had an oppor tunity to become fully operational and 
effective. By increasing competition this op tion would lead to a more stable regulatory 
intervention 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 appl y a revised Roaming Regulation implementing 
option 3c for a period of ten years with a full report on its functi oning by the Commission 
every two years. 
 
EN 8   EN 8. EVALUATION  AND  MONITORING 
Extension of the mobile roaming regulation will  continue to be monitored very closely both 
by the individual NRAs, BEREC and the Commission. NRAs will continue to be charged with the tasks of monitoring and supervising compliance and may intervene on their own 
initiative to ensure complianc e in accordance with the terms of the amended Regulation. With 
respect to evaluation of the extended Roaming Regulation, it is considered that a similar approach to the current regulation can be adopt ed. It is foreseen th at the Commission would 
review, taking into the account the opinion of BEREC, and repor t to Council and Parliament 
in 2015. Thereafter the Commission will carry out regular reports  every 2 years before the 
Regulation expires in 2022.