COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Executive Summary of the Impact Assessment Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on rules for wholesale roaming markets and amending Regulation (EU) No  531/2012 on roaming on public communications networks within the Union
Date: 2016-06-15
Institutions: Directorate-General for Communications Networks, Content and Technology, European Commission
Subjects: consumer protection, price regulations, regulation of telecommunications, single market, telephone charges, transmission network, wholesale trade

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   EUROPEAN COMMISSION  Brussels, 15.6.2016  SWD(2016) 201 final   COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  Executive Summary of the Impact Assessment Accompanying the document Proposal for a Regulation of the European Parliament and of the Council  on rules for wholesale roaming markets and amending Regulation (EU) No  531/2012 on roaming on public communications networks within the Union  {COM(2016) 399 final} {SWD(2016) 202 final}  
 
 
Executive Summary 

Impact assessment on Wholesale roaming legislative proposal  

A. Need for action 

Why? What is the problem being addressed?  
The  co-legislators  agreed  on  ending  retail  roaming  surcharges  for  periodic  travels  in  the  EU  as  of  15  June  2017 
(RLAH1 regime imposed by Regulation 531/2012 as amended  by Regulation 2015/2120 of 25 November 2015, the 
'Roaming  Regulation'),  on  condition  that,  following  a  review  of  the  wholesale  roaming  market  in  the  EU  by  the 
Commission, the EU takes appropriate legislative measures on this market in order to enable RLAH from that date. 
The wholesale roaming review conducted by the Commission shows that national wholesale roaming markets are not 
well-functioning  and  that  they  are  expected  to  remain  so  under  the  future  RLAH  retail  obligation.  This  IA  therefore 
seeks to determine the best option for regulating the wholesale roaming market in the EU in order to enable RLAH in 
2017 while maintaining the sustainability of domestic charging models.  
Affected parties will mainly be EU mobile network operators. The main beneficiaries will be all customers of EU 
mobile operators using mobile communications services while travelling in the EU. 

What is this initiative expected to achieve?  
The initiative aims at proposing appropriate  measures on the wholesale roaming  market to make it compatible with 
the obligation upon EU mobile operators of providing retail roaming services at domestic prices as of 15 June 2017. In 
assessing  such  measures,  the  Commission  has  taken  into  account  the  need  to  ensure  that  roaming  providers  are 
able to recover all costs of providing regulated wholesale roaming services, including joint and common costs. 
The  options  are  hence  assessed  against  the  policy  objectives  set  out  in  the  Roaming  Regulation:  (i)  enabling  a 
sustainable abolition of retail roaming surcharges for all, or virtually all, operators in the EU, avoiding distortions on 
the  home  markets,  (ii)  ensuring  cost  recovery  at  wholesale  level,  whilst  preserving  incentives  to  invest  in  visited 
networks and avoiding distortion of domestic competition in the visited markets. 
What is the value added of action at the EU level?  

The Roaming Regulation entrusted the Commission with the task to review the wholesale roaming market and make 
appropriate proposals to enable the abolition of retail roaming surcharges in the EU from 15 June 2017. The abolition 
of retail roaming surcharges mandated in the Roaming Regulation is conditioned to the adoption and applicability at 
that date of measures at wholesale level necessary to enable this abolition. Therefore, if no measure were proposed 
and given the foregoing evidence that the current wholesale market legislative regime is not a sufficient basis for the 
introduction of RLAH, the obligation laid down in the Roaming Regulation to abolish retail roaming surcharges from 15 
June 2017 would not be applicable at that date.  

B. Solutions 

What legislative and non-legislative policy options have been considered? Is there a preferred choice or 
not? Why?  
Further to implementation implications, the options are assessed based on: country-level estimate of the average cost 
of  RLAH  for  retail  roaming  providers  compared  to  their  average  domestic  revenues;  sustainability  test  at  operator 
level;  all  relevant  costs  at  wholesale  level  for  visited  networks  by  reference  to  cost  estimates,  current  mobile 
termination rates' level, and domestic wholesale and retail prices.  
Four options are considered:  
Option  1-no  action  at  Union  level  (baseline  scenario):  RLAH  would  not  be  applicable  from  15  June  2017  and 
consumers would continue to pay retail roaming surcharges after that date.  
Option 2-set EU-wide wholesale roaming caps at the current level: RLAH would not be sustainable for at least 20% of 
the operators in our sample and/or in at least six Member States.  
Option  3-set  EU-wide  wholesale  roaming  cap  at  a  lower  level  than  today:  The  analysis  shows  that  this  option 
best fulfils the policy objectives.  
Option 4-set country-specific wholesale roaming caps: This option does not significantly improve the sustainability of 
RLAH at operator level compared to Option 3, while entailing greater risks regarding cost recovery at wholesale level, 
as well as considerable implementation difficulties.  
Who supports which option?  
The public consultation shows that operators are divided as to what is the most appropriate regulatory wholesale level 

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measure to enable sustainable RLAH: certain historic incumbents and operators with a large footprint, and generally 
operators  with  large  inbound  roaming  traffic,  defend  the  view  that  RLAH  is  sustainable  under  current  wholesale 
roaming price caps (Option 2), while other operators, in particular smaller ones, mobile virtual network operators, and 
operators with large outbound roaming traffic argue that wholesale roaming price caps must be significantly lowered 
in  order  to  enable  sustainable  RLAH  (Option  3).  Virtually  no  support  of  Option  4  has  emerged  from  the  public 
consultation. 

C. Impacts of the preferred option 

What are the benefits of the preferred option (if any, otherwise main ones)?  
Under Option 3 (lowered EU-wide wholesale roaming caps), setting the EU-wide wholesale roaming caps at 4 €c/min, 
1 €c/SMS and 0.85 €c/MB enables sustainable RLAH in the EU, including for operators with less bargaining power, 
while  ensuring  the  recovery  of  visited  operators'  foreseeable  costs  of  providing  wholesale  roaming  services  and 
keeping investment incentives in the visited markets. The cap level under Option 3 also leaves space for competition 
below the cap, allowing in particular to derive economic advantages from scale and the associated ability to negotiate 
lower tariffs.   
The  analysis  also  shows  that  allowing  the  visited  and  visiting  operators  to  agree  together  to  opt  out  from  the  cap 
regulation in favour of an unregulated contract, e.g. capacity-based pricing or any other contractual form, would bring 
a positive impact to the wholesale roaming market, and thus is proposed as a complementary measure.  
By  enabling  RLAH  from  June  2017,  Option  3  achieves  the  significant  positive  impact  of  aligning  roaming  prices  to 
domestic prices for consumers travelling in the EU, as decided by the co-legislator in 2015. 

What are the costs of the preferred option (if any, otherwise main ones)?  
The  preferred  option  does  not  create  additional  administrative  or  technical  costs  compared  to  current  regulation 
applicable  to  the  wholesale  roaming  market  in  the  EU.  By  imposing  lower  wholesale  roaming  prices  to  mobile 
operators,  it  may  in  the  short  term  reduce  wholesale  roaming  revenues  of  operators  when  they  host  roaming 
customers  of  foreign  operators,  while  reducing  at  the  same  time  the  wholesale  costs  they  incur  when  they  provide 
retail roaming services to their own customers. However the resulting higher demand for mobile services on travels in 
the  EU,  in  particular  for  data,  should  mitigate  and  counterbalance  both  effects  to  a  large  extent.  Unleashing  the 
development  of  new  usages  of  connected  devices  and  applications  on  travels  in  the  EU  will  in  turn  trigger 
considerable new revenues for EU mobile operators, exceeding largely in the medium term those of today's limited 
EU roaming mobile usage, fully in line with other initiatives under the Commission's DSM Strategy. 

How will businesses, SMEs and micro-enterprises be affected?  

Smaller mobile network operators and mobile virtual network operators: significant positive impact expected as these 
operators have more difficulty in having access to favourable wholesale roaming deals. The initiative will enable them 
to benefit from wholesale roaming prices facilitating their providing of retail roaming services at domestic prices. 
Online businesses and start-ups: significant positive impact; usage of their services while roaming in the EU will grow, 
which means more opportunities for them to provide services to consumers when they travel in the EU. The initiative 
will promote cross-border use of connected devices/services/mobile apps, favouring innovation. 
SMEs: significant positive impact for those having employees travelling in the EU for business (reduced bills). 

Will there be significant impacts on national budgets and administrations?  

This  initiative  as  such  will  not  impact  on  national  public  administrations.  National  regulatory  authorities  (NRAs)  will 
monitor and supervise compliance with the Roaming Regulation as amended by Regulation 2015/2120. 

Will there be other significant impacts?  
No significant impact expected on third countries, international trade or investment. The EU's Roaming Regulation is 
a legislative instrument focusing on the creation of the EU internal market. Its scope covers intra-EU traffic, when a 
customer of one EU network operator roams on a network of another EU operator's network. The EU, a Word Trade 
Organisation Member on its own right, is an economic integration within the meaning of Article V GATS and the EU 
and its Member States thereby benefit from a waiver under that Article. As the EU Roaming Regulation applies to the 
EU  internal  market  only,  there  is  no  discrimination  or  Most-Favoured-Nation  issue  if  (wholesale  and  retail)  roaming 
rates for operators within EU differ from those outside the EU. 

D. Follow up 

When will the policy be reviewed?  
The EC is required to report every 2 years as from June 2018. The Roaming Regulation mandates NRAs to monitor 
and  supervise  compliance  with  this  Regulation,  and  BEREC  to  collect  data  from  NRAs  on  retail  and  wholesale 
charges development (notified to the EC twice a year) and to report on the evolution of wholesale prices. 

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