COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No  531/2012 as regards rules for wholesale roaming markets
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

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 15.6.2016  SWD(2016) 202 final   COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT  Accompanying the document Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No  531/2012 as regards rules for wholesale roaming markets   {COM(2016) 399 final} {SWD(2016) 201 final}  
 
 
Table of Contents 
Table of Figures ........................................................................................................................ 3 

Table of Tables ........................................................................................................................... 4 

Executive Summary ................................................................................................................... 8 

1.  Policy background ............................................................................................................ 10 

2.  Problem definition ............................................................................................................ 13 

2.1.  What is the problem ................................................................................................... 13 

2.2.  Who is affected .......................................................................................................... 17 

2.3.  What would happen if nothing is done? .................................................................... 19 

3.  Why should the European Union act? .............................................................................. 19 

4.  Policy objectives .............................................................................................................. 21 

5.  Policy options ................................................................................................................... 22 

5.1.  Option 1: no action at Union level (baseline scenario) ............................................. 23 

5.2.  Option 2: set EU-wide wholesale roaming caps at the level currently in force ........ 23 

5.3.  Option 3: set EU-wide wholesale roaming caps at a lower level .............................. 23 

5.4.  Option 4: set country-specific wholesale roaming caps ............................................ 23 

5.5.  Additional measure to Options 2 to 4 ........................................................................ 24 

5.6.  Discarded options ...................................................................................................... 24 

6. 

Impacts of the different policy options ............................................................................ 26 

6.1.  Option 1: Baseline scenario - no action at Union level ............................................. 28 

6.2.  Option 2: set EU-wide wholesale roaming caps at the level currently in force ........ 32 

6.3.  Option 3: set lower EU-wide wholesale roaming caps .............................................. 36 

6.4.  Option 4: set country-specific wholesale roaming caps ............................................ 45 

6.5.  Additional  Measures:  Enable  operators  to  freely  agree  wholesale  roaming  terms 
which are not unit-based ...................................................................................................... 49 

7.  Comparison of options ..................................................................................................... 51 

7.1.  Stakeholders' views on the most appropriate regulatory approach ............................ 51 

7.2.  Commission's assessment of the best option ............................................................. 52 

7.3.  Commission's assessment of additional measures suggested by stakeholders .......... 59 

8.  Monitoring and evaluation ............................................................................................... 61 

ANNEX 1: Procedural information concerning the process to prepare the impact assessment 
report and the related initiative ................................................................................................. 64 

1. 

Information and data gathering on roaming markets .................................................... 64 

 
 
2.  Analysis  of  the  data  on  roaming  markets  and  development  of  a  sustainability 
assessment model ................................................................................................................. 65 

3.  External study to estimate the costs of providing wholesale roaming services ............ 65 

4.  Public consultation (see Annex 2) ................................................................................. 65 

5.  Commission's inter-service group ................................................................................. 66 

ANNEX 2: Stakeholder consultation ....................................................................................... 67 

1.  Consultation on the cost  model to  estimate the costs of providing  wholesale roaming 
services in the EEA .............................................................................................................. 67 

2.  Public consultation on the initiative .............................................................................. 68 

ANNEX 3: Who is affected by the initiative and how ............................................................. 79 

ANNEX 4: Analytical models used in preparing the impact assessment. ............................... 82 

1.  Forecasted roaming consumption under RLAH in 2017 .............................................. 82 

2.  Sustainability test based on operators' data ................................................................... 84 

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Table of Figures 
Figure  1  -  Scheme  of  current  regulatory  treatment  of  retail  and  wholesale  roaming  services 
within the EU ........................................................................................................................... 11 
Figure 2 - EEA average price per minute for wholesale non-group roaming voice calls ........ 13 
Figure  3  -  Average  wholesale  price  per  intra-EEA  roaming  SMS:  charges  to  non-group 
companies ................................................................................................................................. 14 
Figure 4 - Average wholesale data price per MB (prepaid+postpaid), EEA average .............. 14 
Figure 5: Parts of the problem, drivers and consequences table .............................................. 17 
Figure 6 - Total intra-EEA wholesale roaming balance (revenues minus payments) as a % of 
total retail domestic revenues (y-axis), all services included, per country .............................. 18 
Figure 7: General and specific objectives ................................................................................ 22 
Figure 8: Criteria to assess the impact of each option .............................................................. 28 
Figure 9: Total voice origination cost and average wholesale roaming voice price (unbalanced 
traffic) in MS (€c/min) ............................................................................................................. 38 
Figure 10: Total data costs and average wholesale roaming data prices (unbalanced traffic) in 
MS (€c/MB) ............................................................................................................................. 40 

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Table of Tables 
Table 1: RLAH consumption in 2017 valued at wholesale roaming cap of the preferred option 
(4€c/min, 1€c/SMS and 0.85€c/MB) ....................................................................................... 30 
Table  2:  Average  net  annual  wholesale  cost  of  unbalanced  outbound  RLAH  at  current  EU 
wholesale roaming caps, as % of ARRPU, per country ........................................................... 33 
Table 3: Sustainability results for Option 2 under the Base case scenario modelled ............... 35 
Table 4: Wholesale roaming services' cost estimates in each of the 29 countries considered in 
TERA Consultants' cost model ................................................................................................ 36 
Table 5: Wholesale roaming cost recovery in Malta ................................................................ 41 
Table  6:  Average  net  annual  wholesale  cost  of  outbound  unbalanced  RLAH  at  Option  3's 
wholesale roaming caps as % of ARRPU, per country ............................................................ 43 
Table 7: Sustainability results for Option 3 under the Base case scenario modelled ............... 44 
Table 8: Sustainability results for Option 4 under the Base case scenario modelled ............... 47 
Table  9:  Sustainability  results  for  each  regulatory  option  under  each  of  the  three  scenarios 
modelled ................................................................................................................................... 54 
Table 10: Comparison of options: effectiveness, efficiency, stakeholder views and coherence
 .................................................................................................................................................. 55 
Table 11: Forecasted roaming consumption under RLAH in 2017 ......................................... 82 
Table  12:  %  change  in  roaming  consumption  between  2014  and  2017  under  RLAH  ,  total 
EEA .......................................................................................................................................... 83 
Table 13: Sample of operators used in the assessment of sustainability by operator .............. 85 
Table 14: Allowances included in the baskets included in the price study conducted for DG 
Connect ..................................................................................................................................... 87 
Table 15: Country VAT rates used to derive domestic retail prices excluding VAT .............. 87 
Table 16: Country retail prices derived using the DG CNECT study ...................................... 88 
Table 17: Assumed percentage change in outbound roaming volumes between 2014-2017 .. 90 
Table 18: Assumed percentage change in domestic retail traffic between 2014-2017 ............ 92 
Table 19: Assumptions considered in each of the three sustainability scenarios ..................... 92 
Table  20:  Sustainability  results  for  each  wholesale  price  cap  option  under  each  of  the  three 
scenarios modelled ................................................................................................................... 93 

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List of Acronyms 

ARPM - Average Revenue Per Minute 

ARRPU - Average Retail Revenue Per User 

BEREC - Body of European Regulators in Electronic Communications 

DG CNECT - Directorate General for Communications Networks, Content & Technology 

EEA - European Economic Area 

EU - European Union 

EUR - Euro 

EUR/PPP - EUR/Purchasing Power Parity 

FUP - Fair Use Policy 

GB - Gigabyte 

GSM - Global System for Mobile communications 

GSMA - GSM Association 

HD - High Definition 

IA - Impact Assessment 

IMSI - International Mobile Subscriber Identity  

IOT - Internet of Things 

JRC - Joint Research Centre 

LBO - Local Break Out 

LTE - Long-Term Evolution 

MB - Megabyte 

MS - Member State 

MNO - Mobile Network Operator 

MTR - Mobile Termination Rate 

MVNO - Mobile Virtual Network Operator 

MWC - Mobile World Congress 

M2M - Machine to Machine 

NRA - National Regulatory Authority 

OECD - Organisation for Economic Co-operation and Development 

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OTT - Over-the-top 

VoIP - Voice over Internet Protocol 

Q1 - Quarter 1 

Q2 – Quarter 2 

Q3 - Quarter 3 

Q4 - Quarter 4 

RLAH - Roaming Like At Home 

SIM - Subscriber Identity Module 

SME - Small and medium-sized enterprises 

SMS - Short Message Service 

STIRA - Standard Terms for International Roaming Agreements 

US - United States 

VAT - Value-added tax 

VoIP - Voice over Internet Protocol 

VoLTE - Voice over Long-Term Evolution 

Wi-Fi - Wireless Fidelity 

3G - 3rd Generation 

4G - 4th Generation 

€c - euro cent  

Countries 

BE - Kingdom of Belgium 

BG - Republic of Bulgaria 

CY- Cyprus 

CZ - Czech Republic 

DK - Kingdom of Denmark 

DE - Federal Republic of Germany 

EE - Republic of Estonia 

IE - Ireland 

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EL - Hellenic Republic 

ES - Kingdom of Spain 

FR - French Republic 

HR - Republic of Croatia 

IS - Republic of Iceland 

IT - Italian Republic 

LI - Principality of Liechtenstein 

LV - Republic of Latvia 

LT - Republic of Lithuania 

LU - Grand Duchy of Luxembourg 

HU - Hungary 

MT - Republic of Malta 

NL - Kingdom of the Netherlands 

NO - Kingdom of Norway 

AT - Republic of Austria 

PL - Republic of Poland 

PT - Portuguese Republic 

RO - Romania 

SI - Republic of Slovenia 

SK - Slovak Republic 

FI - Republic of Finland 

SE - Kingdom of Sweden 

UK - United Kingdom of Great Britain and Northern Ireland 

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Impact assessment on Wholesale roaming legislative proposal  

Executive Summary 

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 

1 Roam Like at Home 

7 

 
 
                                                 
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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1.  Policy background 

International  roaming  services  ensure  that  a  travelling  wireless  device  (typically  a  mobile 
phone) is kept connected to a foreign visited network without breaking the connection when 
crossing  a  border.  The  provision  of  retail  roaming  services  rely  on  the  functioning  of  a 
wholesale  roaming  market,  where  visited  network  operators  offer  access  and  capacity  to 
visiting home operators. 

Since  2006  the  Commission  has  taken  action  to  address  the  high  roaming  charges  paid  by 
consumers for using their mobile phones when travelling abroad in another EU Member State. 
Regulatory  measures  adopted  by  co-legislators  in  2007,  2009  and  2012  have  introduced 
binding maximum caps for retail and wholesale roaming prices. The ultimate objective was to 
ensure  that  market  forces  would  achieve  an  internal  market  for  mobile  communication 
services  in  which  no  differentiation  between  national  and  roaming  tariffs  would  exist; 
accordingly  the  Commission  was  required  to  verify  whether  this  objective  was  achieved 
through these measures2. 

During these years wholesale and retail roaming prices have decreased in the EU. However 
roaming and national tariffs remained differentiated.  

In particular, as analysed in the accompanying Review Staff Working Document (SWD) on 
the wholesale roaming market in the EU ('accompanying Review SWD' hereinafter), at both 
retail  and  wholesale  levels  the  evolution  of  prices  for  roaming  services  has  been  closely 
aligned to the dynamics of the various price caps set by the EU Roaming Regulations since 
2007, although differences exist on the extent and timing of prices' decreases in particular at 
wholesale level between voice and SMS on the one hand and data on the other 3.   

While  an  increasing  number  of  operators  have  started  to  offer  some  domestic  tariff  plans 
which  include  roaming  services  in  the  domestic  bundle,  also  in  view  of  the  forthcoming 
"roam-like-at-home"  regime  (see  below),  most  of  these  tariff  plans  do  not  cover  all  EU 
Member States, or concern only voice and SMS, or data only, and/or include roaming services 
in  the  domestic  bundle  as  an  add-on  package  (i.e.  for  a  fixed  periodic  -  daily,  weekly  or 
monthly – charge which represents a fixed roaming surcharge over the domestic price).  

Several market failures analysed in the accompanying Review SWD affect the roaming retail 
market.  These  include  the  absence  of  substitutes  at  retail  level  fully  satisfying  the  mobility 
needs  of  users,  the  lack  of  tariff  transparency  and  of  sufficient  incentives  for  intermittent 
roaming users to look for alternatives to the roaming services bundled with the domestic tariff 
and  the  resulting  inelastic  demand  for  roaming  services  for  a  significant  proportion  of  the 
customer base4. These market failures prevent the same competitive dynamics characterising 
the retail domestic services to extend also to the provision of retail roaming services.  

Even if some technological developments analysed in the accompanying Review SWD could 
increase competitive pressure at retail level, yet these are unlikely to be massively available in 

2 See in particular Article 19(2) of the original wording of Regulation (EU) n. 531/2012, which called upon the 
Commission  to  make  appropriate  proposals  if  differences  between  roaming  and  national  tariffs  did  not 
approached to zero.  
3 See Section 3.2.1 and 3.2.2. of the accompanying Review SWD on the wholesale roaming market in the EU..  
4 See Section 4.2. of the accompanying Review SWD on the wholesale roaming market in the EU. 

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the  medium  term5  and  above  all,  they  do  not  address  the  competitive  issues  affecting  the 
wholesale roaming markets and in particular the risk of high prices for some of the wholesale 
inputs  still  needed  for  the  provision  of  the  retail  service.  Indeed  high  prices  for  the  input 
acquired  at  wholesale  level,  well  above  the  underlying  costs,  also  hinder  convergence  of 
domestic and roaming retail prices, since the home operator faces costs for providing roaming 
retail  services  which  differ  significantly  from  its  own  domestic  costs,  which  are  taken  into 
account in defining domestic prices.  

Taking  into  account  the  importance  for  the  effective  establishment  and  functioning  of  a 
telecom  single  market  of  achieving  the  objective  of  no  differentiation  between  national  and 
roaming tariffs, the policy makers considered necessary to ensure such an objective directly.  

In  particular  in  2015,  the  European  Parliament  and  the  Council  completed  the  process  of 
adoption of Regulation 2015/21206, which entered into force on 29 November 2015 and, inter 
alia, amended Regulation 531/20127. In the rest of the document, the Roaming III Regulation 
as amended by Regulation 531/2012 is called the Roaming Regulation. 

The  co-legislators  in  particular  agreed  to  directly  mandate  the  abolition  of  retail  roaming 
surcharges  in  the  EU  from  15  June  2017,  subject  to  fair  usage  of  roaming  services  and  a 
sustainability  clause.  This  new  regulatory  regime  for  retail  roaming  services  in  the  EU  is 
designated  as  the  "roam-like-at-home"  (RLAH)  regime  in  the  remainder  of  the  report.  The 
entry  into  force  of  RLAH  is  subject  to  the  adoption  of  appropriate  legislative  measures 
regarding the wholesale roaming markets, following a review carried out by the Commission. 
In  the  meantime  a  transition  regime  applies,  where  retail  roaming  surcharges  to  domestic 
conditions  are  applicable  (s.c.  RLAH+)  in  line  with  the  applicable  maximum  roaming 
wholesale price caps laid down in the Roaming III Regulation and which were not addressed 
by the co-legislators in 20158.   

Figure  1  -  Scheme  of  current  regulatory  treatment  of  retail  and  wholesale  roaming  services 
within the EU 

5 Such as, for instance, eSims or Voice over LTE (VoLTE) analysed in section 4.6. of the accompanying Review 
SWD. 
6http://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=uriserv:OJ.L_.2015.310.01.0001.01.ENG&toc=OJ:L:2015:310:TOC  
7 http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32012R0531  
8  I.e.  up  to  0,05€  per  minute  of  calls  made,  up  to  0,02€  per  SMS  sent,  0,05€  per  MB  of  data,  the  weighted 
average  of  maximum  mobile  termination  rates  per  minute  of  call  received)  in  addition  to  the  domestic  tariff 
conditions, provided that the overall amount does not exceed 0,19€ per minute of call received, 0,06€ per SMS 
and 0,20€ per MB. 

10 

 
 
  
                                                 
Indeed the retail and wholesale roaming markets are closely interrelated, in particular in the 
event of regulation at retail level, since the price at which the wholesale input is available to 
the  home  operator  is  key  to  ensure  that  regulated  operators  can  fulfil  their  retail  price 
obligations.  

Accordingly, since the correct working of wholesale roaming market is a precondition for the 
achievement  of  a  full  RLAH  regime  but  was  not  specifically  addressed  in  2015,  the 
Commission  has  therefore  been  entrusted  with  the  specific  task  to  review  the  wholesale 
roaming markets, as a precondition for the entry into force of RLAH. This review was carried 
out  with  a  view  to  analyse  the  degree  of  competition  in  national  roaming  markets,  any 
observable risk of distortion of competition and investment incentives in domestic and visited 
markets in order to assess the measures necessary to enable the achievement of the objective 
established  by  the  co-legislators,  i.e.  the  abolition  of  retail  roaming  surcharges  by  15  June 
2017; it also took into account the need to ensure that the visited network operators are able to 
recover  all  costs  of  providing  regulated  wholesale  roaming  costs  and  the  need  to  prevent 
permanent  roaming  or  anomalous  or  abusive  use  of  wholesale  roaming  (Article  19  of  the 
Roaming Regulation).   

The  Commission  has  therefore  conducted  a  comprehensive  review  of  national  wholesale 
roaming  markets  in  the  EU  in  view  of  these  specific  objectives  laid  down  in  the  Roaming 
Regulation, since other aspects of the overall roaming regulatory regime set out in Roaming 
III,  and  in  particular  those  concerning  the  regulation  of  retail  roaming  services  have  been 
already  addressed  by  the  policy  choices  made  by  the  co-legislators  in  the  context  of  the 
adoption of Regulation 2015/21209. The methodology and findings of the review are detailed 
in  the  accompanying  Review  SWD.  Based  on  these  findings,  this  Impact  Assessment  takes 
stock of the problems affecting the functioning of the wholesale roaming markets identified in 
the accompanying Review SWD and their impact on the provision of regulated retail roaming 

9  Concerning  in  particular  the  establishment  of  the  RLAH  regime,  the  corresponding  necessary  transparency 
measures  and  the  principles  governing  the  safeguards  for  consumers  and  operators  for  the  provision  of 
sustainable RLAH.  

11 

 
 
 
 
                                                 
services across the Union, and analyses the options for addressing them in view of the policy 
objectives  indicated  by  the  co-legislators,  i.e.  to  enable  European  citizens  to  access  mobile 
services at domestic prices when periodically travelling abroad in the EU, without distorting 
visited and home markets. 

2.  Problem definition 

2.1.  What is the problem 

With the establishment of the obligation to charge retail roaming services at domestic prices 
(no more retail roaming surcharges), Regulation EU 2015/2120 has defined the substance of 
the new RLAH retail regulatory regime for regulated roaming services.  

However,  while  retail  pricing  of  roaming  and  domestic  services  would  be  aligned  by 
regulation, the provision of retail roaming services does not use the same wholesale inputs as 
retail  domestic  services,  in  view  of  the  fact  that  the  provision  of  retail  roaming  service 
requires,  by  definition,  the  use  of  a  different  (visited)  network.  These  wholesale  roaming 
inputs  are therefore to be bought in the market by the visiting operator.  Wholesale roaming 
inputs include a number of costs specific to roaming (i.e. not incurred in providing domestic 
services),  such  as  roaming  operation  and  management  costs,  roaming  financial  and  data 
clearing costs, roaming negotiation and contract management costs10. In order to ensure that 
the retail roaming services can be provided at domestic retail prices, therefore, it is necessary 
that  wholesale  roaming  inputs  are  available  at  a  price  that  makes  generally  possible  for  the 
visiting (home) operators the provision of RLAH, eventually subject to fair use and without 
prejudice to the possibility to ask for a sustainability derogation in exceptional circumstances, 
while at the same time ensuring that the visited operators can recover the costs of provision of 
these services.  

A  perfect  functioning  of  national  wholesale  roaming  markets,  which  would  bring  prices  in 
line  with  the  costs  of  visited  networks,  would  clearly  facilitate  the  sustainability  of  RLAH. 
However,  the  accompanying  Review  SWD  shows  that  wholesale  roaming  markets  do  not 
always  function  correctly  and  that  the  future  retail  RLAH  obligation  is  by  itself  unlikely  to 
lead to well-functioning wholesale roaming markets. The main findings of the Review report 
are set out below. 

National wholesale roaming markets exhibit a number of market failures  

First  of  all  it  is  widely  admitted  by  stakeholders  in  the  public  consultation  that  any 
competitive dynamics that may be observed on the wholesale roaming markets in the EU are 
essentially linked to existing EU caps which provide a starting point for price negotiations in 
bilateral roaming agreements. This is also confirmed by the dynamics of wholesale prices in 
relation with the caps, in particular for voice and SMS.  

Figure 2 - EEA average price per minute for wholesale non-group roaming voice calls 

10 See the accompanying Review SWD on wholesale roaming markets in the EU, section 5. 

12 

 
 
                                                 
Source: International roaming BEREC Benchmark Data Report April – September 2015, BoR(16)28, February 
2016 

Figure  3  -  Average  wholesale  price  per  intra-EEA  roaming  SMS:  charges  to  non-group 
companies 

Source: International roaming BEREC Benchmark Data Report April – September 2015, BoR(16)28, February 
2016 

Figure 4 - Average wholesale data price per MB (prepaid+postpaid), EEA average 

13 

 
 
 
 
 
 
Source: International roaming BEREC Benchmark Data Report April  – September 2015, BoR(16)28, February 
2016 

Absent  regulation  in  the  EU,  wholesale  roaming  prices  would  be  higher  than  they  are,  as 
evidenced by unregulated wholesale roaming prices inside the EU before any regulation.. The 
main  market  failures  identified  in  the  accompanying  Review  SWD,  persisting  despite  some 
competitive  dynamics  emerging  thanks  to  steering  traffic  techniques  (i.e.  the  possibility  for 
the home operator to steer most of the traffic originated by its subscribers to a single visited 
network offering the best quality and pricing wholesale conditions) are the following: 

  Oligopolistic  character  of  national  wholesale  markets:  only  MNOs  offer  roaming 
services in visited markets (3 to 4 depending on the Member State) and among those, 
often not all of them can provide a full range of services (such as full geographic or 
services coverage) needed to provide services to all roamers (see also section 6.2.1 of 
the accompanying Review SWD). 

  Bilateral  nature  of  roaming  agreements:  the  main  negotiation  driver  in  roaming 
agreements  is  the  amount  of  inbound  and  outbound  traffic  that  can  be  balanced 
between  each  pair  of  operators,  more  than  the  final  price  agreed  for  the  unbalanced 
part.  This  means  that  operators  with  no  or  little  inbound  traffic  to  balance  off 
(MVNOs,  MNOs  with  large  outbound  balance)  are  unable  or  seriously  impaired  to 
negotiate  better  conditions  than  those  in  the  cap.  (see  also  section  6.2.4  of  the 
accompanying Review SWD) 
Imperfect  wholesale  roaming  substitutes:  these  did  not  develop  beyond  very  niche 
markets, in view of their inconveniences at retail level (need to change number; need 
to acquire a new subscription in the local/visited market, see also section 6.2.2. of the 
accompanying Review SWD) 

 

  Exclusion  of  MVNOs  from  wholesale  roaming  markets:  this  reduces  competition 
among  visited  networks  as  well  as  the  possibility  for  MVNOs  to  negotiate 

14 

 
 
 
 
autonomously  from  the  host  MNOs  better  deals  for  their  outbound  roaming  traffic. 
(see also section 6.2.5. of the accompanying Review SWD) 

The  impact  of  these  market  failures  on  the  functioning  of  wholesale  markets  results  in 
observed  prices  substantially  above  estimated  costs,  as  analysed  in  the  aaccompanying 
Review SWD11. That analysis in particular shows that the gap between prices and estimated 
underlying  costs  is  likely  to  be  larger  for  data  than  for  voice.  The  report  also  shows  that  a 
number of market players, in particular smaller operators not part of a group and with smaller 
traffic volumes and MVNOs, do not generally benefit from lower wholesale roaming prices 
than the caps (see section 6 of the accompanying Review SWD). 

The anticipated impact of the future RLAH obligation on competition dyn amics 
in national wholesale roaming markets is uncertain  

The  Wholesale  Report  also  concludes  that  it  is  not  possible  to  anticipate  with  certainty  a 
positive impact of the future RLAH obligation on competition on national wholesale roaming 
markets. The public consultation shows that, if 70% of the mobile operators expect an effect 
of  the  retail  RLAH  obligation  on  competition  dynamics  in  the  wholesale  roaming  markets, 
they are split as to whether the retail RLAH obligation will increase or decrease competition 
on the wholesale roaming market12. 

Overall, the mandatory imposition of RLAH is supposed to produce an increase of wholesale 
roaming traffic13. On the one hand, this expansion of wholesale markets could bring per-unit 
production costs down, thanks to economies of scale. This could be accordingly reflected in 
lower  wholesale  prices,  depending  on  the  level  of  competition  between  visited  operators  to 
attract  to  their  networks  the  increased  demand  by  home  operators.  On  the  other  hand,  the 
overall demand will increase, and this may inflate overall costs borne by the home operators, 
taking  also  into  account  that  they  have  more  limited  freedom  in  the  wholesale  roaming 
negotiations in view of the reduced capacity to influence demand for retail roaming services 
of its subscribers through pricing. The obligation upon the home operator to provide RLAH to 
its  customers  could  therefore  exacerbate  and  aggravate  the  structural  differences  and 
imbalances  in  the  relative  negotiation  positions  between  net  senders  and  net  receivers  in 
bilateral roaming negotiations.  

In light of the analysis carried out in section 7 of the accompanying Review SWD, therefore, 
the  risk  that  the  negotiation  position  of  the  net  senders  of  roaming  traffic,  including  the 
weaker market players on wholesale roaming markets, would in fact deteriorate under RLAH 
cannot be excluded in the absence of countervailing measures. 

In assessing whether and to what extent RLAH regime could be delivered in accordance with 
the  objective  of  the  co-legislator,  therefore,  it  can  be  first  of  all  concluded  that  the  current 
functioning  of  the  wholesale  roaming  markets  has  not  by  itself  supported  a  competitive 
dynamic  leading  to  a  convergence  of  wholesale  prices  generally  available  in  the  markets 
towards underlying costs. Accordingly, with a generalisation of a RLAH regime (in particular 
in the event of mandatory abolition of retail roaming surcharges), the current functioning of 
wholesale  roaming  markets  would  not  enable  in  general  the  sustainability  of  operators' 

11 See in particular Section 5.9 of the accompanying Review SWD on the estimation of costs for the provision of 
wholesale roaming services and section 6.5 on the analysis of observed prices. 
12 See Annex 2. 
13 See the estimates of traffic increases between 2014 and 2017 provided for in Annex 4. 

15 

 
 
                                                 
domestic charging models, in particular for those operators with weaker bargaining powers in 
wholesale markets.    

 Figure 5: Parts of the problem, drivers and consequences table 

Drivers 
-  Retail  and  wholesale  roaming  markets 
are  strictly  interlinked,  since  in  order  to 
provide  retail  roaming  it  is  necessary  to 
acquire  wholesale  access  inputs  in  the 
visited country. 

Problem 

retail 

abolition  of 

The  current  functioning  of  national 
wholesale  roaming  markets  would  not 
enable a competitive dynamic enabling 
roaming 
the 
surcharges  by  15  June  2017  while  in 
general  ensuring  the  sustainability  of 
operators'  domestic  charging  models, 
in  particular  for  those  operators  with 
weaker 
in 
wholesale markets. 

bargaining 

powers 

-  National  wholesale  roaming  markets 
exhibit  a  number  of  market  failures 
which result in wholesale roaming prices 
to 
being  supra-competitive  compared 
underlying costs. 

impact  of 

and  unlikely 

the  retail  RLAH 
-  The 
obligation  on  competition  dynamics  in 
national  wholesale  roaming  markets  is 
uncertain 
change 
wholesale  roaming  market  conditions  so 
as  to  ensure  that  they  would  work 
competitively 
increased 
demand,  in  particular  from  operators 
to 
with 
exchange. 

low  or  no 

inbound 

satisfy 

traffic 

to 

to 

Consequences 
-  Customers  of  the  derogating 
operators  will  not  enjoy  the 
benefits  of  RLAH  and  continue 
to  pay  a  roaming  surcharge  in 
addition to the domestic price. 

-  In  effect  RLAH  will  not 
happen  throughout  the  EU  from 
15 June 2017. 

- If RLAH is implemented while 
wholesale  roaming  costs  are 
inconsistent 
current 
domestic  retail  prices,  domestic 
prices may rise. 

with 

2.2.  Who is affected 

Wholesale  roaming  markets  represent  a  fraction  of  overall  domestic  traffic,  which  actually 
vary  across  operators,  as  analysed  in  the  accompanying  Review  SWD.  In  most  instances, 
wholesale  roaming  revenues  represent  between  1  and  2%  and  in  any  case  are  below  4%  of 
overall domestic retail revenues (see in particular Section 6.4.).  

On  the  other  hand,  the  distribution  of  roaming  traffic  across  Member  States  diverges  quite 
significantly, since roaming traffic flows are highly influenced by the patterns of tourism and 
travelling  in  the  EU  as  well  as,  increasingly,  by  consumption  patterns14.There  has  been  a 
traditional  distinction  between  countries  with  a  high  ratio  of  inbound  traffic  compared  to 
outbound  traffic  (i.e.  more  users  coming  in  the  country  using  roaming  services  than  users 
leaving  the  country),  and  those  with  a  larger  amount  of  residents  leaving  the  country  for 
tourism,  usually  along  a  South-North  divide15.  This  results  in  significant  divergences  of  the 

14  For  instance,  in  some  countries  traffic  unbalance,  in  particular  for  data  is  also  driven  by  consumption  of 
outbound roamers adding to inbound touristic flows (for instance in view of general low usage of data) or, on the 
contrary,  by  very  high  consumption  of  inbound  roamers  (for  instance  by  business  users  accounting  for  a 
substantial amount of inbounders, such as in Belgium and Luxembourg). 
15 See in particular Section 6.4.1. of the accompanying Review SWD, with an analysis of traffic flows. It should 
be  noted  that  references  to  Northern  and  Southern  countries  are  intended  schematically,  there  are  notable 

16 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
 
total wholesale roaming balance (revenues minus payments) as a percentage of retail domestic 
revenues, as shown in the graph below. 

Figure  6  -  Total  intra-EEA  wholesale  roaming  balance  (revenues  minus  payments)  as  a  %  of 
total retail domestic revenues (y-axis), all services included, per country 

Data: operators' replies to the autumn 2015 data collection 
JRC's calculations      

In assessing the sustainability of RLAH under current market conditions, it should be noted 
that the size of these traffic imbalances, in particular those deriving from general touristic and 
travelling  flows,  may  actually  increase,  in  view  of  the  generalised  expected  increase  in 
roaming  consumption16.  Under  current  market  conditions  and  in  view  of  the  functioning  of 
wholesale markets illustrated above, operators that would be more affected by that imbalance 
would  be  operators  with  less  bargaining  power  in  wholesale  roaming  negotiations  (e.g. 
smaller  operators  not  part  of  a  group,  MVNOs,  which  cannot  negotiate  significant  discount 
compared to the wholesale caps in view of their limited size) and/or with large net outflows of 
roaming customers and/or roaming traffic (e.g. operators operating in Northern countries and 
with high domestic consumption patterns).  

With regard to operators in many Northern countries with high imbalance in roaming traffic 
this is due both to the travelling patterns towards the South of the EU and, in some cases, to 
their  intensive  and  growing  use  of  mobile  data.  Altogether,  the  exposure  of  operators  in 
Northern countries to wholesale roaming charges is high and will increase considerably under 
the  RLAH  regime  as  their  subscribers  will,  subject  to  fair  use,  be  able  to  replicate  their 
sizeable domestic data consumption while roaming. 

variations  between  countries  in  both  regions  due  to  travel  patterns,  smartphone  penetration,  price  sensitivity, 
domestic  touristic  flows,  size,  etc.  As  an  example,  both  Italy  and  France,  although  among  the  most  touristic 
countries in the EU, have rather balanced traffic. 
16 See the estimates of traffic increases between 2014 and 2017 provided for in Annex 4. 

17 

 
 
 
                                                                                                                                                         
In contrast, operators with large net inflows of roaming customers and/or capacity to negotiate 
better rates, in particular a number of incumbents and operators with large footprint, benefit 
from  high  wholesale  roaming  caps  (in  terms  either  of  direct  wholesale  revenues,  or  of 
competitive  advantage  relative  to  domestic  rivals)  and  this  could  be  accentuated  with  the 
abolition  of  roaming  surcharges,  in  view  of  the  increase  in  demand  due  to  the  mandatory 
RLAH obligation.  

In  conclusion,  the  imposition  of  RLAH  is  expected  to  affect  the  demand  for  wholesale 
roaming services. In view of the current traffic flows and market conditions, on the one hand 
this  could  accentuate  the  impact  of  current  imbalances  between  Northern/smaller  (net  out-
bounders)  and  Southern/bigger  (net  in-bounders)  operators,  leading  to  the  risk  of 
unsustainable provision of RLAH under current domestic prices for the former and additional 
revenues triggered by the RLAH regulatory obligation for the latter. .  

2.3.  What would happen if nothing is done? 

The  abolition  of  retail  roaming  surcharges  from  15  June  2017  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 (Article 6a). 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 
Article 6a of the Roaming Regulation to abolish retail roaming surcharges from 15 June 2017 
would  not  be  applicable  at  that  date.  The  transitional  period  put  in  place  in  the  Roaming 
Regulation from 30 April 2016, which allows operators to apply to their customers roaming in 
the EU retail roaming surcharges in addition to the domestic price, would continue beyond 15 
June 2017. EU would fail to deliver in June 2017 the end of retail roaming surcharges in the 
EU that it has mandated and announced publicly in 2015. 

3.  Why should the European Union act? 

As  described  in  the  background  section,  EU  regulatory  intervention  on  wholesale  and  retail 
roaming markets pursuant to Article 114 TFEU (former Article 95 TEC), has been necessary 
for the last 10 years in order improve the conditions for the functioning of the internal market 
for  roaming  services  within  the  Union17,  taking  also  into  account  that  NRAs  acknowledged 
that  they  were  unable  to  autonomously  tackle  alone  this  problem  due  to  the  cross-border 
nature of the international roaming market18.  

This  regulatory  intervention  includes  the  RLAH  obligation  introduced  by  the  Roaming 
Regulation,  which  considered  in  particular  this  retail  obligation  as  a  necessary  element  to 
ensure the establishment and functioning of a single telecom market across the Union. While 
necessary,  in  view  of  the  interrelationships  between  retail  and  wholesale  roaming  markets 
explained above, this retail regulation is not sufficient alone to ensure the correct functioning 
of the single telecom market and the roaming  market in particular.  Therefore, measures on 
regulation  of  wholesale  roaming  markets  pursuant  to  Article  114  TFEU  are  therefore  also 
needed to  ensure  the correct functioning of the  wholesale roaming  market across  the Union 
and, ultimately, to enable the provision of RLAH in a sustainable way.  

17 The use of the legal basis was also confirmed by the European Court of Justice in Case C-58/08: Judgment of 
the Court (Grand Chamber) of 8 June 2010, paragraph 48. 
18 See December 2005 ERG letter to the Directorate general of the Commission's DG Information Society. 

18 

 
 
                                                 
In  particular,  with  regard  to  wholesale  roaming  markets,  individual  Member  States  have 
insufficient  incentive  to  regulate  in  a  way  that  takes  into  account  the  possible  effect  of  its 
regulation  on  the  other  Member  States  and  on  the  implementation  of  RLAH.  Therefore  a 
common approach at the European level is preferable as this would better take into account 
the general interest of all European Member States. A European approach would also avoid 
that individual Member States take divergent approaches for dealing with the problem of high 
wholesale  prices,  which  would  create  obstacles  to  the  Internal  Market  since  European 
roaming  services  providers  would  be  treated  differently  depending  on  whether  they  are 
wholesale roaming  providers  (as  visited  operators)  or  buyers  of  wholesale  roaming  services 
(as home operators), in spite of common roaming retail regulation at European level as laid 
down in Regulation (EU) No 2015/2120.  

Moreover,  in  accordance  with  the  principle  of  subsidiarity,  while  on  the  one  hand  national 
measures  on  roaming  markets  alone  would  not  be  able  to  ensure  the  objective  of  RLAH,  a 
common  approach  at  EU  level  on  the  contrary  could  establish  the  necessary  regulatory 
conditions  ensuring  that  national  wholesale  markets  work  in  accordance  with  the  European 
objective  of  abolition  of  roaming  surcharges  in  a  sustainable  way  throughout  the  EU.  This 
will also take into account the interdependence between a common approach on regulation of 
retail and wholesale markets to ensure the smooth functioning of Union roaming markets, as 
highlighted by the Court of Justice19.  

Finally,  the  principle  of  proportionality  of  EU  action  requires  that  measures  implemented 
through Union law provisions are appropriate for attaining the legitimate objectives pursued 
by the legislation and do not go beyond what is necessary to achieve these objectives. Within 
the broad discretion granted to the legislator in achieving this objective, the Court clarified in 
particular  with  regard  to  roaming  regulation  that  the  legislator  shall  base  its  choice  on 
objective  criteria;  moreover,  even  if  substantial  negative  economic  consequences  for  some 
operators could derive from the measures adopted, for the measures to be compatible with EU 
law  these  consequences  need  to  be  justified  for  the  achievement  of  the  objective20.  With 
specific  regard  to  these  aspects,  the  wholesale  regulatory  options  assessed  in  this  Impact 
Assessment take into account two elements in accordance with Regulation 2015/2120, i.e. the 
need to ensure that visited operators are able to recover all costs, including joint and common 
costs, of providing regulated wholesale roaming services and the need to prevent permanent 
roaming  or  anomalous  or  abusive  use  of  wholesale  roaming  access.21  These  specific 
requirements  indeed  ensure  that  wholesale  roaming  regulation,  in  accordance  with  the 
proportionality principle, does not go beyond what is necessary to ensure the general policy 
objective,  by  creating  negative  economic  consequences  which  are  not  justified  for  the 
achievement of the objective, such as requiring efficient operators to provide services below 
their costs or imposing access regulation without visited operators having the effective means 
to limit this to roaming services. On the other hand, as highlighted by the Court, compliance 
with  the  proportionality principle  does  not  exclude  that  in  specific  cases  negative  economic 
consequences  could  occur  for  some  operators,  such  as  with  regard  to  reduction  of  supra-
competitive  profits  stemming  from  wholesale  roaming  activities  or  losses  due  to  inefficient 

19 In case 58/08 the Court of Justice considered that wholesale regulation of roaming market is compliant with 
the  subsidiarity  principle  in  view  of  the  fact  that  "the  interdependence  of  retail  and  wholesale  charges  for 
roaming services is considerable, so that any measure seeking to reduce retail charges alone without affecting the 
level of costs for the wholesale supply of Community-wide roaming services would have been liable to disrupt 
the smooth functioning of the Community-wide roaming market", paragraph 77.  
20 Case C-58/08, paragraph 53. 
21 The latter requirement is in principle addressed through Article 3(6) of the Roaming Regulation. 

19 

 
 
                                                 
management  of  network  costs,  since  in  these  cases  these  negative  consequences  are  indeed 
justified by regulatory measures necessary to achieve the objective.  

4.  Policy objectives 

The general policy objective, set out in the Roaming Regulation by the co-legislators in 2015, 
is to enable European citizens to access mobile services at domestic prices when periodically 
travelling abroad in the EU. This is an important element of the Digital Single Market strategy 
set out by the Commission on 6 May 2015 (COM(2015)192)22. 

Taking into account the interdependence between retail and wholesale roaming regulation and 
in  line  with  the  problem  definition  according  to  which  the  current  functioning  of  wholesale 
markets  would  not  ensure  the  achievement  of  that  policy  objective,  the  present  initiative 
should ensure that national wholesale roaming markets function in such a way that, from 15 
June 2017, that general policy objective can be met throughout the EU and without distorting 
domestic visited and home markets. The two specific objectives of this initiative therefore are 
to  ensure  that  the  functioning  of  wholesale  markets  with  a  view  to  enable  RLAH  a)  do  not 
distort domestic visited markets and b) do not distort domestic home markets, by making the 
provision of RLAH structurally unsustainable.  

With  regard  to  the  first  specific  objective,  the  Roaming  Regulation  explicitly  requires  the 
Commission to take into account the impact of wholesale regulation on the visited networks, 
including in particular in terms of cost recovery, in order to preserve incentives to invest in 
visited  networks  and  avoid  distortion  of  domestic  competition  in  the  visited  markets  due  to 
regulatory  arbitrage  of  operators  using  roaming  access  remedies  to  compete  in  domestic 
visited markets..  

In order to take into account this specific objective, each of the regulatory options takes into 
account different estimations to assess the costs of provision of wholesale roaming services, 
including joint and common costs, by an efficient operator. Moreover, while bearing in mind 
that the visited operators are empowered to act against permanent roaming under Article 3(6) 
of the Roaming Regulation and will have relevant incentives to do so, the risk of permanent 
roaming  is  also  analysed  in  order  to  determine  whether  there  is  a  need  for  additional 
regulatory options, taking also into account the level of domestic retail prices.    

At  the  same  time,  the  other  specific  objective  of  the  proposal  requires  to  verify  that  any 
appropriate regulatory measures to be imposed on national wholesale roaming markets enable 
a sustainable abolition of retail roaming surcharges for all, or virtually all, operators in the EU 
in order to avoid distortions on the home markets.  

Indeed, while other regulatory measures than wholesale measures may also have an impact on 
the  way  RLAH  is  provided  in  the  Union  (in  particular  by  means  of  application  of  fair  use 
policies  by  operators  or  sustainability  derogations  in  specific  circumstances  in  accordance 
with  the  other  implementing  measures  to  be  adopted  by  the  Commission  pursuant  to 
Regulation  2015/2120),  the  correct  functioning  of  wholesale  roaming  markets  is  the  main 
element to ensure that wholesale roaming inputs are available to the vast majority of  market 

22  https://ec.europa.eu/digital-agenda/en/news/digital-single-market-strategy-europe-com2015-192-final;  see  in 
particular section 3.1 " Making the telecoms rules fit for purpose" 

20 

 
 
                                                 
players  at  conditions  enabling  the  provision  of  RLAH23.  This  was  also  raised  in  the  public 
consultation, where several respondents stressed that any restriction in the provision of RLAH 
allowed under fair use or via sustainability derogations is likely to be a competitive factor in 
the domestic market and should therefore be limited as much as possible.  

The analysis of regulatory options vis à vis this specific objective, therefore, will be based on 
the  assessment  of  the  impact  of  different  wholesale regulatory  measures  on  the  costs  of  the 
visiting operators providing RLAH and on its overall business case.  

As  a  matter  of  fact,  the  two  specific  objectives  are  interrelated  and  need  to  be  taken  into 
account  together,  since  the  highest  level  of  sustainability  can  be  achieved  with  the  lowest 
level  of  wholesale  prices,  but  any  regulation  of  the  latter  should  ensure  cost  recovery. 
Therefore  the  options  considered  in  the  impact  assessed  are  meant,  on  the  one  hand,  to 
minimise  number  of  cases  where  the  provision  of  RLAH  is  not  sustainable  for  the  home 
operators provided that, on the other hand, cost recovery for the visited operators is ensured.  

Figure 7: General and specific objectives 

General Objective 

Specific Objectives 

Enable European citizens 
to access mobile services 
at domestic prices when 
periodically travelling 
abroad in the EU 

  ensure  cost  recovery  at  wholesale 

level,  preserving 
incentives  to  invest  in  visited  networks  and  avoiding 
distortion of domestic competition in the visited markets  

  enable a sustainable abolition of retail roaming surcharges 
for  all,  or  virtually  all,  operators  in  the  EU,  avoiding 
distortions on the home markets 

5.  Policy options 

The different options to achieve the objective are the following: 

Option 1 (baseline scenario): no action at EU level. 

Option  2:  set  EU-wide  wholesale  roaming  caps  after  15  June  2017  at  the  level  of  the 
Roaming Regulation currently in force. 

Option 3: set EU-wide wholesale roaming caps after 15 June 2017 at a lower level than in the 
Roaming Regulation currently in force, but compatible with the recovery of (i.e. above) costs 
of  providing  wholesale  roaming  services,  including  a  relevant  share  of  joint  and  common 
costs, in all Member States.  

Option 4:  set country-specific wholesale roaming caps after 15 June 2017 at a cost-oriented 
level based on costs estimated by NRAs using a common cost model. 

23  This  is  due  to  the  fact  that  these  other  measures  concern  rather  the  harmonisation  of  measures  adopted  by 
home  operators  aiming  at  preventing  abusive  or  anomalous  behaviour  of  end-users  (the  minimum  fair  use 
safeguards)  or  of  national  powers  to  grant  derogations  from  RLAH  in  order  to  take  into  account  exceptional 
market circumstances (the sustainability derogations). 

21 

 
 
                                                 
Additional  measure  in  Options  2,  3,  4:  allow  mobile  operators  to  opt  out  from  the  cap 
regulation  if  both  the  visited  and  visiting  operators  agree  to  the  terms  of  an  unregulated 
contract, e.g. capacity-based pricing or any other contractual form.  

All  options  are  to  be  imposed  on  providers  of  mobile  electronic  communications  services 
(hereinafter "operators").  

5.1. Option 1: no action at Union level (baseline scenario) 

The Commission does not make any legislative proposal. By conditioning the applicability on 
15  June  2017  of  the  abolition  of  retail  roaming  surcharges  (RLAH  regime)  to  the 
applicability, on that date, of a legislative act adopted following the Commission's wholesale 
roaming  review,  Article  6a  of  the  Roaming  Regulation  provides  that,  under  Option  1,  the 
abolition of retail roaming surcharges (RLAH) does not take effect on 15 June 2017. Pursuant 
to  Article  10(2)  litera  (a)  of  the  Regulation,  the  transitional  regime  defined  in  Article  6f 
(designated  as  the  RLAH+  regime,  which  includes  the  possibility  for  operators  to  continue 
applying  a  retail  roaming  surcharge)  continues  to  apply  until  that  legislative  act  becomes 
applicable. 

5.2. Option  2:  set  EU-wide  wholesale  roaming  caps  at  the  level 

currently in force 

This  option  implies  setting,  after  15  June  2017,  the  same  wholesale  roaming  caps  set  in 
Articles 7, 9, and 12 of the Roaming Regulation and valid until 30 June 2022 for calls made, 
SMS  messages  and  data  respectively.  Their  respective  values  are  0.05  €  per  minute,  0.02  € 
per SMS, and 0.05 € per MB. This is done by adopting a new legislative act setting out the 
wholesale roaming caps at the same level 

5.3. Option 3: set EU-wide wholesale roaming caps at a lower level 

This  option implies  setting  EU-wide  wholesale roaming  caps at lower levels than  the levels 
set in Articles 7, 9, and 12 of the Roaming Regulation and valid until 30 June 2022 for calls 
made,  SMS  messages  and  data  respectively.  In  line  with  Article  19  of  the  Roaming 
Regulation,  the  new  levels  of  the  caps  would  allow  the  recovery  of  costs  of  providing 
wholesale  roaming  services  in  all  Member  States,  including  a  relevant  share  of  joint  and 
common  costs.  Under  this  option,  the  Commission  estimates  the  costs  for  a  hypothetical 
efficient operator in the higher-costs Member States, using a variety of evidence sources such 
as the generic cost model developed by TERA for the Commission for the wholesale roaming 
review, assumptions underlying regulated termination rates for voice, evidence from domestic 
and  roaming  wholesale  markets  and  from  domestic  retail  prices.  The  EU-wide  caps  are  set 
above those costs.   

5.4. Option 4: set country-specific wholesale roaming caps 

Under this option, NRAs are requested to estimate the costs of providing wholesale roaming 
voice,  SMS  messages  and  data  services  for  a  hypothetical  operator  in  their  respective 
countries  using  the  generic  cost  model  developed  by  TERA  for  the  Commission  for  the 
wholesale roaming  review.  The national cost estimates  produced  are used  to set, at  national 
level,  cost-oriented  country-specific  wholesale  roaming  caps  with  an  appropriate  return  on 
investment.  

22 

 
 
The national cost estimates of each NRA are peer-reviewed by the Commission. If, in a given 
Member  State,  the  Commission  finds  the  cost  estimates  of  the  NRA  inconsistent  with  the 
methodology set out by the Commission, the Commission may oppose the caps proposed by 
the  NRA  and  impose  alternative  caps  based  on  the  cost  estimates  found  for  countries  of  a 
similar cost level according to the cost model. 

5.5. Additional measure to Options 2 to 4 

This  measure  can  be  proposed  next  to  any  of  the  three  options  setting  wholesale  roaming 
price  caps. The  measure  consists  in  giving  the  possibility  to  "opt  out"  of  the  regulated caps 
regime if both parties to the roaming agreement agree to the terms of a specific contract. This 
can be for example a capacity-based roaming contract based on bandwidth or a flat-rate based 
on the expected number of visiting subscribers. This option gives more negotiating flexibility 
and at the same time enables operators to explore specific agreements which are currently dis-
incentivised  by  the  possibility  for  one  of  the  contracting  party  to  have  recourse  to  the  legal 
wholesale caps ex post in contrast with initial contractual commitments: under this additional 
measure, neither party would be entitled to revert to the cap once the agreement outside the 
cap has been contractually established. 

5.6. Discarded options 

Lifting (removing) wholesale roaming caps:  

The option of not imposing any wholesale roaming cap in the EU after 15 June 2017 has been 
actually proposed by a very limited number of operators, in particular with big footprint and 
large  inbound  roaming  traffic,  on  the  basis  that  the  current  wholesale  market  would  be 
sufficiently  competitive  to  ensure  that  wholesale  roaming  prices  are  sufficiently  low24.  In 
contrast  the  vast  majority  of  stakeholders  are  not  calling  for  lifting  any  wholesale  roaming 
price regulation under the future retail RLAH obligation. These are of the view that price caps 
are  necessary,  as  operators  tend  to  use  wholesale  price  caps  as  the  starting  point  for  their 
bilateral  negotiations  on  wholesale  roaming  prices.  Removing  wholesale  roaming  price  cap 
regulation  could  affect  the  competitive  dynamics  observed  in  these  markets  and  result  in 
higher  wholesale  roaming  prices.  In  its  Report  on  the  review  of  the  wholesale  roaming 
market, BEREC is not considering the option of lifting any wholesale roaming regulation at 
all. 

Taking into account the results of the public consultation, this option has been  discarded as it 
raises significant doubts as to the possibility that it enables RLAH on a significant scale for 
the following reasons: 1) significant market failures affect the wholesale roaming markets, as 
highlighted  in  the  accompanying  Review  SWD,  and  therefore  there  is  no  guarantee  that 
without regulation wholesale roaming prices driven by market forces alone will be lower or 
even will not increase compared to existing price levels, in particular for specific categories of 
operators  which  have  limited  footprint,  smaller  volume  traded  and  significant  outbound 
roaming traffic 2) as shown in the accompanying Review SWD and in Option 2 below, even 
current wholesale roaming regulation is not sufficient to enable sustainable RLAH in 2017, 3) 
the  impact  of  the  future  retail  RLAH  obligation  on  competition  dynamics  in  the  wholesale 

24 In the public consultation, only 4 (including two from the same group) out of 40 operators are of the view that 
the  most  appropriate  regulatory  measure  to  enable  RLAH  would  be  to  lift  any  wholesale  roaming  regulation 
altogether, on the ground that there is enough competition in national wholesale roaming markets as shown by 
actual prices below the cap. 

23 

 
 
                                                 
roaming  markets  is  unlikely  to  improve  the  wholesale  roaming  market  conditions  so  as  to 
eliminate  the  unsustainability  issues  (on  the  contrary,  the  risk  cannot  be  excluded  that  the 
future retail RLAH obligation may deteriorate the bargaining power of the weaker operator in 
bilateral roaming negotiations), 4) wholesale roaming caps also protect home networks when 
customers lose coverage from their preferred networks and roam on a network that does not 
have discounted rates, Therefore regulation of wholesale roaming markets will be necessary 
under RLAH. 

Set new, lower EU-wide wholesale roaming caps allowing additional seasonality mark-up: 

This option would be similar to Option 3, but the costs estimated for a hypothetical efficient 
operator  in  the  higher-costs  Member  States  would  not  include  any  possible  impact  of  the 
seasonal  character  of  roaming  on  the  costs  of  providing  wholesale  roaming  services  going 
beyond the seasonal character of the domestic market and the overall trend in demand for the 
retail  services  in  question.  If  an  NRA  demonstrates  a  measurable  effect  of  seasonality 
contributing to increase those costs, it would be allowed to add a mark-up on those EU caps to 
enable the operators of the country to strictly recover those additional costs. 

The  impact  of  roaming  seasonality  has  been  carefully  analysed  in  the  external  study25  to 
assess  the  costs  of  providing  wholesale  roaming  services  using  the  best  available  data  to 
quantify  it.  It  is  discussed  in  detail  in  section  5  of  the  accompanying  Review  SWD.  In 
particular, for data services, network needs to support domestic users already tend to exceed 
the summer seasonal peak before the seasonal peak recurs the following year due to massive 
ongoing  demand  growth.  For  voice  services,  there  are  significant  extra  costs  for  seasonal 
peaks for some  countries, but these are spread over all users (domestic and roamers) due to 
significant seasonal in-country displacement to touristic areas and to the compensating effect 
of roamers on capacity usage in metropolitan areas during the summer holiday season. 

While  being  not  negligible  for  voice  services  in  some  countries,  seasonality  effects  remain 
small  relative  to  overall  caps  in  Option  3,  in  particular  because  countries  where  seasonality 
effects are assessed as the highest (Croatia, Greece, Bulgaria) are not among the higher cost 
countries  for  wholesale  roaming  services  (Malta,  Cyprus,  Luxembourg).  The  seasonality 
effects  measured  in  the  higher  cost  countries  are  smaller26.  Therefore  an  option  excluding 
seasonality effects from Option 3's caps only allows a small reduction of EU caps and adds 
little  value.  In  particular,  seasonality  effects  alone  do  not  jeopardise  the  sustainability  of 
RLAH in the EU as shown in Option 3 below.  

In  addition,  like  Option  4,  this  option  implies  important  implementation  challenges, 
complexities  and  costs  compared  to  Option  3.  By  opening  a  new  derogation  procedure  at 
wholesale  level  which  may  have  consequences  on  the  sustainability  derogation  procedure 
foreseen in the Roaming Regulation at retail level, this option would create an uncertain and 
unstable  RLAH  setting  for  at  least  several  months.  This  option  would  therefore  involve 
implementation  complexities  and  additional  administrative  burden  without  adding  value  in 
reaching the policy objectives compared to Option 3.  

Create a spot market: 

25 See Annex 1. 
26 In other words, larger seasonality effects add up on top of smaller costs while smaller seasonality effects add 
up on top of higher costs, thereby reducing the net effect of seasonality on the overall highest costs in the EU. 

24 

 
 
                                                 
A  spot  market  would  impose  a  mandatory  obligation  to  trade  roaming  traffic  anonymously 
through trading platforms. This would allow separating the offer to supply a given number of 
roaming  units  (minutes,  SMS,  MB)  in  a  given  visited  country  from  the  offer  to  purchase  a 
given number of units of roaming traffic, removing the bilateral nature of roaming exchanges. 
Total  volumes  of  demand  and  supply  are  broken  down  in  standard  size  "bonds"  in  order  to 
allow for easy and neutral trading. This option requires all wholesale inbound roaming traffic 
to  be  purchased  by  means  of  open  trading  (e.g.  via  an  electronic  platform).  In  this  way, 
suppliers will compete to attract as much inbound traffic as possible in their visited networks, 
regardless  of  the  amount  of  outbound  traffic  to  be  negotiated  for,  mimicking  a  perfectly 
competitive market.  

Creating  a  spot  market  would  involve  a  significant  structural  change  to  the  functioning  of 
wholesale roaming markets. The whole structure of the market would be shaken up since all 
competitively  and  commercially  grown  alliances  would  be  broken  down.  Such  a  complete 
overhaul of the system needs a significant time to be implemented and to fully and effectively 
replace  the  current  system  of  bilateral  agreements  elaborated  by  operators  over  the  last  20 
years. It cannot be considered in practice as an option enabling RLAH by June 2017.  

In addition the outcome and real benefits of such a drastic change of the roaming structure is 
uncertain.  As  concluded  in  the  impact  assessment  accompanying  the  Commission  proposal 
for the Roaming III Regulation27, it is not expected that this change would be beneficial to the 
European  industry  since  it  would  be  uncertain  if  the  advantageous  offers  by  multi-country 
alliances would still be possible once all of the national partners of these alliances would need 
to  pass  via  the  spot  market.  The  spot  market  would  also  definitely  make  it  much  more 
difficult for operators to provide pan-European mobile offers since the underlying wholesale 
conditions  would  become  too  variable.  Also,  roaming  traffic  cannot  be  easily  treated  as  a 
commodity in view of the qualitative aspects involved such as coverage or speed. 

Finally,  no  respondent  to  the  public  consultation  identified  the  lack  of  an  efficient  trading 
platform  as  a  source  of  concern  for  the  functioning  of  roaming  markets  nor  suggested  this 
regulatory option. 

6.  Impacts of the different policy options 

The aim of this section is to assess to what extent each option considered reaches the policy 
objective set in the Roaming Regulation of enabling the abolition of retail roaming surcharges 
from 15 June 2017 in the EU (RLAH objective), while meeting the explicit requirement set out 
in Article 19 of the Roaming Regulation to ensure that the visited network operators are able 
to  recover  all  costs  of  providing  regulated  wholesale  roaming  services,  including  joint  and 
common costs. In addition, as also required in Article 19 of the Roaming Regulation, account 
is taken of the need to prevent permanent roaming or anomalous or abusive use of wholesale 
roaming  access  for  purposes  other  than  the  provision  of  regulated  roaming  service  (i.e.  the 
risk of arbitrage distorting domestic competition in the visited country), while bearing in mind 
the  means  already  available  to  visited  operators  under  Article  3(6)  of  the  Roaming 
Regulation. 

27 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 public mobile 
telephone networks within the Community, COM(2011)407final, SEC(2011)870final 

25 

 
 
                                                 
The wholesale cost recovery and permanent roaming criteria correspond to the first specific 
objective  of  the  proposal  indicated  in  section  4.  The  RLAH  criterion  corresponds  to  the 
second policy objective indicated in section 4. These three criteria are set out in Article 19 of 
the Roaming Regulation and must be simultaneously met by the option to be proposed by the 
Commission.  

In  addition,  options  are  qualitatively  assessed  against 
their  administrative  burden, 
implementation  challenges  by  public  authorities  and  timeliness,  as  well  as  against  their 
contribution to achieving the digital single market. 

The  criteria  against  which  each  option  is  assessed  are  summarized  in  the  table  below.  The 
RLAH  objective  of  sustainability  is  assessed  on  the  basis  of  data  available  at  country  level 
and  operator  level28.  The  methodology  for  the  RLAH  sustainability  assessment  based  on 
operators'  data  is  explained  in  Annex  429.  The  two  tests  are  complementary  analyses  that 
should be considered jointly. They are based on the best country-level and operator-level data 
available to the Commission for the purpose of assessing  the impact of  different options on 
the  sustainability  of  domestic  charging  models  under the RLAH  regime.  However,  the  tests 
should  not  be  understood  as  an  accurate  prediction  of  the  actual  number  of  requests  for 
sustainability  derogations  that  may  be  filed  by  operators  pursuant  to  Article  6c  of  the 
Roaming Regulation.  

28 From the autumn 2015 data collection conducted for the purpose of the wholesale roaming review. 
29  The  methodology  for  the  RLAH  assessment  based  on  country  level  data  is  straightforward  and  explained 
together with the presentation of the results of this assessment. 

26 

 
 
                                                 
Figure 8: Criteria to assess the impact of each option 

Consumer welfare  (or more generally user welfare) is stemming from the RLAH obligation 
already  contingently  imposed  by  the  Roaming  Regulation.  As  such,  it  is  not  referred  to  in 
Article  19  of  the  Roaming  Regulation  as  a  criterion  to  be  taken  into  account  by  the 
Commission  in  assessing  measures  necessary  to  enable  RLAH.    However,  as  the  different 
options  considered  enable  RLAH  from  June  2017  to  a  varying  degree,  the    proportion  of 
consumers  which  can  actually  reap  the  benefits  of  RLAH  from  that  date  differs  across 
options. The relative size of consumer welfare is therefore used as an additional criterion to 
compare, in section 7, the different options against the baseline scenario (no EU action) where 
very few consumers, if any, would benefit from RLAH. . 

Finally,  any  potential  environmental  impact  stemming  from  the  RLAH  obligation  already 
imposed by the Roaming Regulation (e.g. additional network capacity building) falls outside 
of the impact assessment of this initiative. There is no specific environmental impact in any of 
the options considered for this initiative. 

6.1. Option 1: Baseline scenario - no action at Union level 

RLAH objective 

In Option 1, the RLAH objective is missed. RLAH is not applicable from 15 June 2017. The 
RLAH+ regime of the transitional period starting on 30 April 2016 continues to be in force 
instead.  Consumers  continue  paying  a  roaming  surcharge  of  up  to  5€c/min,  2€c/SMS  and 

27 

Assessed with country level data: How does the average net wholesale roaming costs of providing RLAH incurred by operators of a country (given the average number of days abroad in the EEA of that country's citizens and the average domestic mobile services consumption in that country) compare with the country's average retail revenue per user (ARRPU)?Assessed with operator level data: For how many operators would RLAH not be sustainable given their individual domestic revenues, inbound roaming traffic, outbound roaming traffic pattern in the EEA, and their subscribers' domestic consumption?Cost recovery at wholesale levelCanthecostsofprovidingregulatedwholesaleroamingservices,includingjointandcommoncosts,berecoveredbythevisitedoperators?Permanent roamingArethepossiblerisksofunwantedpermanentroamingoranomalousorabusive use of wholesale roaming access appropriately addressed?Implementation costsOnpublicauthorities:regulatorystepstobecompleted,monitoring,supervisionandenforcement,futureupdatesandreviewoftheRegulation;onmobileoperators:costsimpliedbychangingoperationsaccording to the option's rulesDigitalSinglemarketandDigital EconomyCompletionoftheDigitalSingleMarket(DSM)andusers'benefitsfromthe digital economyRLAH objectiveCriteriaKey Issues 
 
 
5€c/MB in addition to the domestic price, instead of paying no roaming surcharge for a fair 
usage of roaming services.30  

Table  1  below  provides  an  estimation  of  the  missed  consumer  welfare  under  that  baseline 
scenario  compared  to  any  option  that  enables  RLAH  from  15  June  2017.  The  missed 
consumer  welfare  is  the  amount  of  RLAH  volume  that  they  would  have  consumed  at 
domestic  prices  (i.e.  with  no  retail  roaming  surcharge)  if  RLAH  were  applicable  from  that 
date.  This  volume  can  be  valued  in  euros  at  the  level  of  the  retail  roaming  surcharge 
applicable under the RLAH+ regime that would apply under Option 1. 

The amount of RLAH consumption considered in Table 1 is based on the assumption that, if 
RLAH  were  applicable,  roaming  customers  would  consume  mobile  services  abroad  in  the 
EEA like at home (RLAH assumption). The method and data used to obtain the volumes in 
Table 1 are provided in Annex 4.     

This estimated total RLAH roaming consumption by country can be expected to take place at 
RLAH  prices  (i.e.  domestic  prices).  It  can  be  conservatively  valued  at  the  level  of  the 
wholesale roaming caps of the preferred option in this impact assessment (4€c/min, 1€c/SMS 
and 0.85€c/MB, see section 6.3 below), as shown in the last column of  Table 1.31 The total 
value for the EEA is 1.408 bn€. Most of this value is linked to the RLAH data consumption 
(1.012  bn€)  while  RLAH  voice  and  SMS  consumption  is  valued  at  314  and  51  mln€ 
respectively.  

30 It is not excluded that some operators, on a voluntary basis, would choose to provide EU-wide RLAH (with no 
per  diem  nor  any  fixed  periodic  charge)  to  their  customers  under  the  RLAH+  regime.  This  however  has 
remained marginal so far. As this is uncertain and cannot be quantified, the assumption is made in the rest of this 
section that no consumer would benefit from RLAH under the RLAH+ regime.  
31  These  rates  correspond  to  the  main  production  costs  for  RLAH,  and  thus function  as  a  proxy for consumer 
valuation  of  additional  roaming  services  at  RLAH  prices,  which  they  would  not  consume  at  current  retail 
roaming prices. 

28 

 
 
                                                 
Table  1:  RLAH consumption in 2017 valued at wholesale roaming cap of the preferred option 
(4€c/min, 1€c/SMS and 0.85€c/MB) 

If users miss the above amount of roaming consumption at domestic prices, operators on their 
side do not face any sustainability issue as regards the provision of retail roaming services to 
their roaming customers, as operators can charge their roaming customers up to the regulated 
wholesale roaming caps, which allows them to cover the wholesale roaming payments to the 
wholesale  roaming  providers.  Operators  do  not  face  any  cost  recovery  issue  as  regards  the 
provision of wholesale roaming services to visiting operators' customers as current wholesale 
roaming caps have been set above the costs of providing these services. 

Under this option, the transitional RLAH+ regime can be expected to be stable and last over 
time for the following reasons.  

As  shown  in  the  accompanying  Review  SWD32,  there  have  been  some  important 
developments  on  the  retail  roaming  markets  recently,  with  domestic  offers  proposing  more 
and  more  affordable  roaming  prices  to  the  customers.  A  number  of  new  RLAH-like  retail 
roaming offers have appeared on the market. However, most of them are not RLAH offers in 

32 See section 4 of the accompanying Review SWD. 

29 

Number of RLAH minutes (million)Number of RLAH  SMS (million)Number of RLAH MB (million)Value (in million €) at the preferred option's caps (4 €c/min, 1 €c/SMS, 0.85 €c/MB)Austria287587,87879.0Belgium3265012,03235.3Bulgaria60340.5Croatia1551451.9Cyprus40217147.9Czech Republic1285170611.6Denmark103673,06730.9Estonia2137367.1Finland129279,82588.9France1,3121,71110,667160.3Germany1,22323817,928203.7Greece112310.7Hungary4843825.2IcelandIreland1651043,07533.8Italy4251174,85859.5Latvia30116366.7LiechtensteinLithuania39333905.2Luxembourg51401,24313.0MaltaNetherlands521815,09064.9NorwayPoland2811703,38541.7Portugal14131261.8Romania247451.4Slovakia74173866.4Slovenia49283675.4Spain5925617.1Sweden40919419,835186.9UK2,0761,60828,443340.9EEA***7,8645,113122,5861,407.7Cap under the preferred option (€)0.040.010.0085Total value (million €)315511,0421,407.7 
 
  
 
                                                 
the sense of the Roaming Regulation: they do not cover the full of the EU and they are usually 
available  for  an  add-on  (a  fixed  periodic  charge,  often  a  per  diem)  which  constitutes  an 
upfront roaming surcharge to be paid in addition to the price of the domestic bundle mobile 
services.  In  addition,  even  where  RLAH  is  offered  in  accordance  with  the  meaning  of  the 
Roaming  Regulation,  these  developments  are  unequal  across  Member  States,  operators  and 
tariff plans. 

During  the  transitional  period,  these  roaming  per  diem  offers  can  be  expected  to  flourish 
further while being compliant with the retail roaming surcharge of that period (i.e. the price of 
the per diem divided by the roaming volume it gives access to is below the cap retail roaming 
surcharge). These per diem/up-front charges may still represent a less than optimal charging 
mechanism for the user, since, in case the user does not fully consume the roaming volume 
bought,  the  effective  unit  retail  roaming  surcharges  resulting  from  this  actual  consumption 
may  be  higher  than  the  cap.  However,  the  per  unit  charging  model  of  retail  roaming 
consumption  must  always  be  available  to  the  user,  whereby  the  retail  roaming  surcharge  is 
paid  for  each  unit  consumed  in  addition  to  the  domestic  price,  should  the  user  prefer  this 
charging model over the per diem offer. 

With  the  retail  roaming  surcharge,  be  it  in  the  form  of  a  per  diem  or  a  per  unit  surcharge, 
home operators fully and undisputedly recover the costs of providing retail roaming services, 
while  roaming  customers  pay  relatively  modest  retail  roaming  prices  in  addition  to  the 
domestic price. As a consequence, in the absence of EU regulatory action resulting from this 
review  of  the  wholesale  market,  the  transitional  RLAH+  regime  can  be  expected  to  be 
relatively stable and last over time under the baseline scenario. 

In  the  most  competitive  national  retail  roaming  markets  in  the  EEA  where  demand  is  very 
elastic,  some  more  aggressive  retail  roaming  tariff  plans  offering  RLAH  all  over  the  EU  or 
over a subset of EU countries may become more numerous. Also in these cases, however, the 
possibility for some home operators in a given country to provide these offers may be limited 
in view of different negotiating power to secure lower wholesale roaming prices necessary to 
sustain RLAH offers in a mass market.    

As  also  shown  in  the  accompanying  Review  SWD33,  there  has  been  some  significant 
technological developments of relevance to roaming, especially the diffusion of smartphones, 
OTT  services,  and  the  proliferation  of  Wi-Fi  hotspots.  However,  there  has  been  no  perfect 
substitute  to  roaming  services  so  far.  The  most  serious  potential  technological  substitute  to 
roaming  services  is  the  embedded  SIM  card  provisionable  over-the-air  (eSIM  cards)  which 
allows  switching  operator  without  changing  physically  the  SIM  card.  However,  the 
technology is still in  a very early stage of  market take-up and the standardisation work  that 
happened  over  the  last  years  shows  that  this  technology  will  start  to  be  used  in  the  B2B 
market for M2M communications. It is not clear yet if and when the technology will be used 
in  the consumer  market and in  which devices (e.g. smartphones or other connected objects) 
and what the switching process will be in practice. Thus, their current and short-term market 
pressure remains limited. 

Altogether, under the baseline scenario, we do not expect that the market will by itself bring 
full RLAH over the entire EU to all customers in all EU Member States in the medium to long 
term, which is the policy objective decided by the co-legislator in the Roaming Regulation. 

33 See section 4 of the accompanying Review SWD. 

30 

 
 
                                                 
Cost recovery at wholesale level 

Under this option, cost recovery at wholesale level is ensured as it is today.  

Permanent roaming 

As noted by operators in reply to the public consultation, current wholesale roaming caps act 
as  an  effective  safeguard  against  unwanted  permanent  roaming.  Raising  wholesale  roaming 
prices  to  the  current  cap  level  is  a  powerful  deterrent  against  abusive  use  of  wholesale 
roaming access, and would likely make intervention by visited operators under Article 3(6) of 
the Roaming regulation unnecessary. 

Implementation costs 

There are no additional implementation costs to be borne by public authorities nor by mobile 
operators compared to the transitional period already imposed by the Roaming Regulation. 

Digital Single Market 

Consumers still pay higher prices when roaming in the EU than domestically, which is a sign 
of fragmentation of the mobile market in the EU, which is not in line with the DSM objective. 

6.2. Option  2:  set  EU-wide  wholesale  roaming  caps  at  the  level 

currently in force 

RLAH objective assessed with country-level data 

In Option 2, RLAH is applicable from 15 June 2017 with wholesale roaming prices capped at 
current level, i.e. 5€c/min, 2€c/SMS and 5€c/MB. 

The effective, net, wholesale cost of providing retail roaming services is generated only by the 
outbound  roaming  traffic  in  excess  to  the  inbound  roaming  traffic.  For  balanced  traffic, 
wholesale revenues  generated  by  incoming  roamers  effectively  balance  wholesale  payments 
for domestic customers who periodically travel outside the operator's domestic network34. 

Table  2  shows  the  average  net  annual  wholesale  cost  of  the  outbound  unbalanced  part  of 
RLAH35 at current wholesale roaming caps level for retail roaming providers, per country (in 
euros  in  column  (a)  and  as  %  of  Annual  Retail  Revenue  Per  User,  ARRPU36,  in  the  last 
column). For countries (or services within the country) with net inbound roaming traffic, the 
net wholesale cost of RLAH is set at zero in  Table 2. The amount of roaming consumption 
considered in the simulation is based on the assumption that roamers would consume abroad 
in the EEA like at home (RLAH assumption). The roaming consumption is therefore obtained 
by multiplying, for each country, the average daily domestic consumption of voice, SMS and 
data  in  the  country  by  the  average  number  of  days  abroad  in  the  EEA  of  citizens  of  the 

34  Article  6d(3)  litera  (a)  of  the  Roaming  Regulation  refers  to  the  effective  wholesale  roaming  charges  for 
unbalanced traffic. 
35  Based  on  the  inbound/outbound  ratio  in  BEREC  Report  on  the  wholesale  roaming  market,  BoR(16)33, 
February 2016  
36 In the absence of a reliable time series of ARRPU over the last years to forecast ARRPU in 2017, ARRPU  is 
assumed to be the same in 2017 as in 2014. 

31 

 
 
                                                 
country37. The average daily domestic consumption itself is a forecast for 2017 based on 2014 
consumption38 and growth forecast used in the cost model study39. Table 2 does not separate 
out  the  RLAH  retail  revenues,  which,  within  the  overall  ARRPU,  serve  to  cover  the  net 
wholesale cost of roaming services. 

Table  2:  Average  net  annual  wholesale  cost  of  unbalanced  outbound  RLAH  at  current  EU 
wholesale roaming caps, as % of ARRPU, per country  

Under current  caps, five Member States and Norway stand out  with a net wholesale RLAH 
cost  above  5%  of  ARRPU,  and  in  some  cases  very  significantly  above  5%.  The  level  of 
outbound  imbalance  established  by  BEREC  on  the  basis  of  2013  and  2014  operators'  data 

37 We consider, for each country, that the average travelling time abroad in the EEA and daily consumption are 
within fair use of roaming services. 
38 BEREC Report on the wholesale roaming market, BoR(16)33, February 2016, based on operators' replies to 
the autumn 2015 data collection 
39 % change between 2014 and 2017: +6% for voice and +3% for SMS for all countries; for data, the % change is 
country-specific (+300% on average). 

32 

ARRPU 2017 (€) (1)*Days abroad EEA (2)Domestic daily min 2017 (1)**Domestic daily sms 2017 (1)**Domestic daily MB 2017 (1)**outbound unbalanced share of roaming traffic voice (1)***outbound unbalanced share of roaming traffic SMS (1)***outbound unbalanced share of roaming traffic data (1)***net wholesale cost of RLAH at current EU caps (5/2/5 €c)            (a)(a) as % of ARRPUAustria17411.24.91.0133.80.1600.0000.43032.718.8Belgium19810.93.65.622.70.0000.0000.0000.00.0Bulgaria600.94.30.325.50.0000.0000.0000.00.0Croatia1455.45.31.951.00.0000.0900.0000.00.0Cyprus27712.19.14.8161.20.0000.0000.0000.00.0Czech Republic1085.14.61.825.20.0150.5150.3552.42.2Denmark19912.64.63.0136.50.2550.5450.0001.10.6Estonia896.44.90.7173.20.00.0Finland160114.71.0360.90.2550.4500.10020.612.9France21446.38.251.20.0000.0900.0000.10.0Germany1868.93.10.645.90.00.0Greece1370.86.31.018.00.0000.0000.0000.00.0Hungary1042.53.80.330.30.0250.0000.0000.00.0Iceland05.70.00.00.00.0Ireland28610.96.34.0117.90.5900.5850.67045.616.0Italy1402.25.01.457.60.0350.0000.0000.00.0Latvia4454.41.691.90.0600.4500.0000.10.3Liechtenstein5260.0Lithuania445.15.44.654.30.0950.4600.0000.30.8Luxembourg28027.13.52.886.80.0000.0000.0000.00.0Malta1623.52.444.60.0Netherlands253153.70.636.00.5200.3400.71520.88.2Norway30512.66.02.794.60.4550.4500.57536.311.9Poland7234.22.651.10.3800.6000.0000.30.5Portugal1391.54.34.239.30.0000.0000.0000.00.0Romania591.48.02.315.10.4400.6750.3850.71.2Slovakia1565.94.91.125.40.5150.5600.6005.33.4Slovenia1646.95.23.039.10.0000.4150.6759.35.6Spain1871.84.40.142.20.0000.0000.0000.00.0Sweden22812.15.52.6266.20.0000.4600.0000.30.1UK2587.64.83.765.70.2450.3700.43511.54.5EEA****1725.74.72.50.00.0000.0000.0000.00.0Data: (1) BEREC Report on the wholesale roaming market, BoR(16)33, February 2016, based on operators' replies to the autumn 2015 data collection           (2) BEREC Analysis of the impacts of "Roam Like At Home", BoR(14)209, December 2014Values in blue italics are imputed.*ARRPU 2017 is assumed to be the same as in 2014** forecasted change in consumption between 2014 and 2017: +16% for voice, +328% for data, -40% for SMS*** 1 - inbound/outbound (average over 2013 and 2014) if inbound/outbound < 1, 0 otherwise; Austria: 2014 only**** weighted average 
 
 
                                                 
collected in autumn 2015 has a determining impact in this simulation. By using the cap level, 
Table 2 provides an estimate of the cost of RLAH in the absence of any discount rate from the 
cap. With discounted rates, the effective cost of RLAH under Option 2 is likely to be lower 
than  presented  in  this  table.  However,  the  situation  is  more  difficult  in  almost  all  EEA 
countries for MVNOs and more generally for operators with a very large excess of outbound 
over  inbound  roaming  traffic  because  these  operators  do  not  benefit  from  hosting  roaming 
traffic in return. While, as stated above, this simulation does not attribute any RLAH revenues 
from  overall  ARRPU  to  correspond  to  the  consumption  which  generates  the  assumed 
wholesale cost at capped rates, and is thus likely to somewhat overstate the problem of RLAH 
sustainability, it is clear that there are likely to be significant problems where operators in a 
country  can  be  predicted  to  spend  in  excess  of  10%,  or  even  of  15%,  of  their  ARRPU  on 
wholesale costs for customers' roaming (which is assumed to follow domestic usage patterns) 
for less than two weeks a year on average.40 

Keeping EU wholesale roaming caps unchanged would therefore not meet the objective of the 
present  initiative  to  ensure  that  national  wholesale  roaming  markets  function  in  such  a  way 
that,  from  15  June  2017,  retail  roaming  surcharges  may  be  sustainably  abolished  for  all  or 
virtually all operators in the EU without generating distortions on the home markets. 

RLAH objective assessed with operator-level data 

In addition to the country-level sustainability assessment, the Commission has also analysed 
the  sustainability  of  each  of  our  options  at  an  operator  level.  For  this  exercise,  the 
Commission used data gathered from EU mobile operators in the autumn 2015 data collection 
conducted with BEREC (see Annex 1). Out of the sample of 127 operators that replied to our 
information  request,  only  64  provided  sufficient  information  allowing  toundertake  the 
sustainability assessment. In this section we describe the results of our analysis, further details 
on our approach can be found in Annex 441. 

In  summary,  the  sustainability  assessment  by  operator  compares  the  retail  roaming  margin 
(i.e. the revenues from retail roaming services after the introduction of RLAH in 2017 minus 
the  costs  of  providing  these  services)  against  the  domestic  retail  margin  (i.e.  the  revenues 
from  domestic  retail  services  minus  the  costs  of  providing  these  services).  We  define 
sustainability as: 

In  order  to  assess  the  sustainability  of  each  operator  we  run  three  scenarios  for  each  of  the 
three wholesale price cap options that we have considered. In this section we present only the 
results  under  our  Base  case  scenario  (i.e.  the  scenario  to  which  we  attach  the  highest 
probability). Further details on the assumptions underlying this Base case scenario (as well as 
the  results  and  assumptions  used  for  the  other  scenarios)  can  be  found  in  Annex  4,  which 
explains in more detail the operator-level sustainability analysis. In Table 3 below we present 
the  sustainability  results  for  the  wholesale  price  caps  under  Option  2  (i.e.  setting  EU-wide 
wholesale roaming caps at the level currently in force) under our Base case scenario. 

40 See e.g. the cases of Austria, Finland, Ireland, and Norway. 
41  This  analysis is without prejudice  to  the  methodology that will  be  developed for dealing with  sustainability 
derogation applications by individual operators pursuant to Article 6c of the Roaming Regulation, which will be 
subject to an impact assessment accompanying the Commission implementing act on this topic to be adopted by 
15 December 2016. 

33 

 
 
                  
                     
                      
        
                                                 
Table  3,  Table  7  and  Table  8  below  present,  for  each  of  the  wholesale  price  cap  options 
considered (Options 2, 3 and 4), the percentage of operators in the sample that have: 

  Positive sustainability (i.e. RLAH does not result in a negative retail roaming margin) 
  Negative  retail  roaming  margin  and  the  percentage  of  operators  in  the  sample  that 

have a negative margin: 

o  Below 1% of domestic retail margin 
o  Between 1-3% 
o  Between 3-5% 
o  Greater than 5% 

In  Table  3  below  we  present  the  sustainability  results  for  the  wholesale  price  caps  under 
Option 2 (i.e. setting EU-wide wholesale roaming caps at the level currently in force) under 
our Base case scenario. 

Table 3: Sustainability results for Option 2 under the Base case scenario modelled 

Option 2 – current caps 
Note: the row adds up to more than 100% due to rounding. 

Positive sustainability 
66% 

Sustainability % 

<1% 
6% 

1-3% 
5% 

3-5% 
5% 

>5% 
19% 

In  Table  3  below  we  present  the  sustainability  results  for  the  wholesale  price  caps  under 
Option 2 (i.e. setting EU-wide wholesale roaming caps at the level currently in force) under 
our Base case scenario. 

Table  3  above  shows  that  Option  2  results  in  a  low  percentage  of  operators  with  a  positive 
sustainability  (66%  under  our  Base  case  scenario)  and  almost  20%  of  operators  have  a 
negative sustainability above 5% (i.e. a negative retail roaming margin higher than 5% of the 
domestic  retail  margin).    This  result  is  driven  by  the  fact  that  Option  2  includes  wholesale 
roaming price caps that are significantly above the retail prices in most EU countries, thereby 
resulting  in  a  negative  retail  roaming  margin  for  mobile  operators  that  are  net  senders  of 
roaming traffic (i.e. have higher outbound than inbound roaming traffic). 

Cost recovery at wholesale level 

Under this option, cost recovery at wholesale level is ensured as it is today.  

Permanent roaming 

As noted by operators in reply to the public consultation, current wholesale roaming caps act 
as  an  effective  safeguard  against  unwanted  permanent  roaming.  Raising  wholesale  roaming 
prices  to  the  current  cap  level  is  a  powerful  deterrent  against  abusive  use  of  wholesale 
roaming access, and would likely make intervention by visited operators under Article 3(6) of 
the Roaming Regulation unnecessary. 

Implementation costs 

Option 2 does not involve any additional implementation costs for public authorities nor for 
mobile  operators  compared  to  the  current  situation.  Under  this  option,  NRAs  continue 
monitoring and supervising compliance with the current wholesale roaming caps, which has 
been good over the years according to the biannual BEREC's Benchmark Reports. 

Digital Single Market 

34 

 
 
 
Because  RLAH  is  not  sustainable  for  operators  based  in  several  Member  States,  RLAH 
derogations  pursuant  to  Article  6c  of  the  Roaming  Regulation  may  be  obtained  by  a 
significant  number  of  operators,  and  probably  by  all  operators  in  some  Member  States. 
Mobile subscribers in these Member States would not benefit from RLAH. The EU would be 
divided  between  countries  where  some  operators  offer  RLAH  and  countries  where  no 
operator  offers  RLAH.  Depending  on  the  specific  competitive  conditions  in  domestic 
markets, in some Member States where RLAH poses a sustainability problem, operators may 
prefer  raising  domestic  prices  over  derogating  from  RLAH.  Altogether,  this  option  leads  to 
distortions on the domestic markets and fragmentation of the EU between RLAH enabled and 
non-enabled Member States and operators. 

6.3. Option 3: set lower EU-wide wholesale roaming caps 

Wholesale price caps considered in Option 3  

In  section  5  of  the  accompanying  Review  SWD,  we  have  presented  cost  estimates  for 
wholesale roaming services based on an analysis of different sources of information, namely: 

  we have sense-checked the TERA Consultants' cost model; 
  an alternative approach to estimate the total costs of wholesale roaming voice services 

based on national mobile termination rates; and 
retail unit prices in MS from a Commission study on retail prices in the EEA. 

 

In Table 4 below we present the cost estimates for wholesale roaming services in each of the 
29  countries  (28  MS  and  Norway)  considered  in  TERA  Consultants'  cost  model  (this  table 
corresponds with Table 10 in the accompanying Review SWD). 

Table 4: Wholesale roaming services' cost estimates in each of the 29 countries considered in 
TERA Consultants' cost model 

AT 
BE 
BG 
CY 
CZ 
DE 
DK 
EE 
EL 
ES 
FI 
FR 
HR 
HU 
IE 
IT 
LT 
LU 
LV 
MT 

Voice (€c/min) 
2.60 
1.85 
2.74 
1.63 
1.86 
1.70 
1.86 
1.82 
1.94 
2.81 
1.65 
2.79 
2.31 
2.39 
1.24 
1.75 
1.62 
2.63 
2.81 
4.20 

SMS (€c/SMS) 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 

Data (€c/MB) 
0.30 
0.41 
0.53 
0.35 
0.42 
0.31 
0.29 
0.34 
0.35 
0.41 
0.28 
0.39 
0.36 
0.39 
0.31 
0.31 
0.43 
0.44 
0.52 
0.67 

35 

 
 
 
NL 
PL 
PT 
RO 
SE 
SI 
SK 
UK 
NO 

2.57 
1.72 
1.78 
1.79 
3.22 
2.52 
1.63 
2.65 
1.96 

1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 
1.00 

0.37 
0.32 
0.36 
0.59 
0.29 
0.57 
0.55 
0.36 
0.38 

As we describe in the accompanying Review SWD's section 5, these cost estimates include: 

 

the total wholesale roaming costs in MS estimated by TERA (including network costs, 
roaming-specific costs and the impact of seasonality on roaming costs), as discussed in 
section 5.4 of the accompanying Review SWD; 

  an allocation for the termination rate that the visited network operator needs to pay the 
terminating  network  operator  for  terminating  a  call  on  its  network,  as  discussed  in 
section 5.5 of the accompanying Review SWD; and 

  an  allocation  for  the  transit  costs  that  the  visited  network  operator  needs  to  pay  for 
routing  a  call  to  the  terminating  network  operator  or  to  send  data  traffic  back  to  the 
home network, as discussed in section 5.6 of the accompanying Review SWD.  

In order to assess the appropriate wholesale price caps for roaming services under Option  3, 
we have had regard to the twin objectives of minimising unsustainability of RLAH at retail 
level  (which  will  tend  to  support  setting  lower  wholesale  roaming  price  caps),  while  at  the 
same  time  ensuring  that  the  caps  recover  costs  (including  joint  and  common  costs)  at  the 
wholesale  level.  In  relation  to  the  cost  recovery  objective,  we  have  also  compared  TERA's 
cost  estimates  above  against  the  effective  average  wholesale  roaming  prices  for  unbalanced 
traffic  currently  effective  in  EEA  countries.42  We  consider  that  the  relevant  benchmark  for 
wholesale costs is indeed the price for unbalanced traffic, given that prices for balanced traffic 
are merely a bilateral transfer between operators with no net cost for any of the parties and the 
weighted  balanced-unbalanced  price  will  also  not  be  appropriate  for  the  same  reason,  as  it 
takes into account the price for balanced traffic.  

It  is  already  apparent  from  Table  4  above  that  there  are  significant  asymmetries  in  the 
estimated  costs  of  provision  of  individual  wholesale  roaming  services  within  individual 
countries, in particular for voice and data, i.e. the countries with the highest estimated costs 
for provision of voice are not necessarily the same  for data, and vice  versa, as well as  very 
considerable  variation  from  country  to  country,  with  the  highest-cost  countries  having 
estimated  costs  which  are  significantly  in  excess  of  the  lowest  or  even  of  the  median.  In 
considering the role of safeguard wholesale caps in achieving the twin objectives of ensuring 
that  wholesale  providers  recover  all  their  relevant  costs,  while  maintaining  RLAH 
sustainability  derogations  as  an  exceptional  case,  it  is  appropriate  to  take  into  account  the 
portfolio  of  services  provided  by  each  wholesale  provider,  and  the  predictable  volumes  of 
each.  Just  as  retail  roaming  operators  are  likely  to  have  to  assess  the  sustainability  of  their 
domestic charging model under RLAH by reference to the overall costs and revenues of retail 

42 We obtained the data on effective wholesale roaming prices from operators' replies to the autumn information 
request. 

36 

 
 
 
                                                 
roaming services (and this is the approach in the country-level and operator-level simulations 
in  this  impact  assessment),  wholesale  cost  recovery  should  be  considered  in  terms  of 
aggregate costs of provision of the foreseen volumes. Safeguard wholesale caps fixed solely 
by  reference  to  the  highest  estimated  cost  of  each  individual  service  would  therefore  risk 
creating  an  imbalance  as  between  the  retail-level  and  wholesale-level  objectives  of  this 
review, going beyond what is necessary to ensure that each visited network is able to cover all 
wholesale costs. At the same time, too much weight should not be placed on the concept of 
aggregate cost recovery – the caps chosen should leave some margin for error in this respect, 
and it is also considered important that the safeguard caps for individual services should be 
broadly aligned (i.e. of a comparable order of magnitude) with the cost levels in the highest-
cost countries for the respective services.  

We  compare  the  average  wholesale  prices  for  unbalanced  traffic  against  TERA's  estimated 
costs for voice in Figure 9 below. 

Figure 9: Total voice origination cost and average wholesale roaming voice price (unbalanced 
traffic)43 in MS (€c/min) 

The evidence on estimates of total wholesale roaming voice origination costs and wholesale 
roaming voice prices for unbalanced traffic in Figure 9 shows that: 

  cost estimates are below the current wholesale roaming prices for voice in all MS with 
the only exception of Malta, for which TERA's cost estimate is 4.20€c/min compared 
to  a  wholesale  roaming  price  of  3.69€c/min  (which  is  presumably  not  loss-making), 
Spain  (2.81€c/min  against  a  market  price  of  2.73€c/min)  and  France  (2.79€c/min 
against 2.74€c/min); 

43 Based on the autumn 2015 data collection. 

37 

 
 
 
 
                                                 
 

the  maximum  average  wholesale  roaming  price  for  voice  in  all  MS  is  currently 
3.91€c/min (the price in Croatia), compared to TERA's estimated maximum wholesale 
cost of 4.20€c/min (in Malta). 

Based  on  the  evidence  above,  we  conclude  that  it  would  be  appropriate  to  consider  a 
maximum wholesale roaming cap for voice of 4€c/min in all MS, as this acts as a safeguard 
cap, leaving some margin for negotiations in several instances while ensuring cost recovery 
according to several estimates. While this maximum lies somewhat below TERA's estimated 
maximum cost for wholesale roaming voice services (€4.20c/min in Malta)), it is nonetheless 
above  the  maximum  cost  estimated  using  an  alternative  approach  based  on  current  LRIC 
mobile termination rates (€3.81c/min), as explained in Section 5 of the accompanying Review 
SWD. It is also noteworthy that current average wholesale prices for unbalanced traffic in the 
highest  cost  country  (Malta)  are  reported  to  lie  appreciably  below  this  envisaged  cap  level. 
Moreover,  this  cap  level  is  appreciably  above  the  second  highest  cost  estimate  of  TERA 
(3.22€c/min  in  Sweden)  and  slightly  above  the  maximum  average  wholesale  roaming  voice 
price  for  unbalanced  traffic  currently  effective  in  all  MS  (€3.91c/min).  In  this  regard,  we 
actually  considered  in  the  accompanying  Review  SWD  that  the  assumptions  made  on  the 
applicable  termination  rates  in  2017  are  likely  to  be  relatively  conservative.  In  addition, 
divergences across the Union in this respect are foreseen to decrease, in particular through the 
prospect of measures taken in accordance with the Regulatory Framework aiming at ensuring 
consistency  of  regulatory  approaches44.  In  the  meantime,  taking  into  account  the  specific 
regulatory framework applicable to roaming (where the visited network can levy a maximum 
charge for wholesale roaming  services that also includes other regulated inputs provided  by 
third  operators  such  as  termination  services),  where  the  competent  national  regulatory 
authorities are requested to address any dispute that could arise on the level of rates levied by 
third operators to inputs necessary for the provision of wholesale roaming services (or on the 
rates  for  other  inputs  required  by  a  visited  operator),  such  authorities  should  be  obliged  to 
seek  the  assistance  of  BEREC  in  resolving  the  dispute.  This  procedure  will  be  potentially 
relevant at least as long as significant divergences remain in the regulatory treatment across 
Member States, leading to a hypothetical – but in our view improbable - risk that a significant 
imbalance between the price of the regulated input and that recovered through the wholesale 
roaming charge could result in a given visited operator being unable to recover its aggregate 
wholesale roaming costs 45.    

In  Figure  10  below  we  compare  the  cost  estimates  for  data  services  based  on  TERA's  cost 
model  against  effective  average  wholesale  roaming  prices  for  unbalanced  traffic  in  the  29 
countries considered.  

44  In  addition  to  ongoing  market  review  notifications  and  pending  litigation,  the  Commission  has  launched  a 
public consultation on review of the Termination Rates Recommendation in which it has raised the question of 
additional  harmonisation  procedures  pursuant  to  Article  19  of  the  Framework  Directive  or  as  part  of  the 
Framework Review. Any follow-up measures will be subject to separate impact assessment, but for the purposes 
of the present impact assessment the Commission may be assumed to have the firm intention to pursue greater 
regulatory convergence in this field in a timely and consequential manner.  
45 As illustrated in para 5.5 of the accompanying Review SWD, the termination rate (TR) is one element in the 
estimation of costs, which may vary according to different traffic mix and variations of termination rates across 
Member States. 

38 

 
 
 
                                                 
Figure 10: Total data costs and average wholesale roaming data prices (unbalanced traffic) 46 in 
MS (€c/MB) 

The  evidence  on  TERA's  estimates  of  total  wholesale  roaming  data  costs  and  average 
wholesale  roaming  data  prices  for  unbalanced  traffic  in  Figure  10  shows  that  the  cost 
estimates are well below the current average wholesale roaming prices for data in all MS. The 
highest estimated cost is in MT, at 0.67€c/MB, while estimated costs in the great majority of 
Member  States,  as  well  as  Norway,  lie  below  0.4€c/MB.  In  order  to  assess  an  appropriate 
wholesale  price  cap  for  data  roaming  services,  we  have  also  taken  into  consideration  other 
factors, in particular: 

 

the sensitivity analysis conducted by TERA Consultants on its estimated data roaming 
costs  (described  in  more  detail  in  TERA's  report47).  This  sensitivity  analysis  shows 
that the unit data roaming costs could be slightly above the level estimated under their 
baseline  scenario  by  about  0.1€c/MB  under  certain  assumptions  regarding,  for 
example, the cost allocation rule (Erlang vs Mbps); 

  domestic wholesale prices for data provided by MVNOs to the Commission show that 
domestic wholesale prices for data present significant variations between MS but are 
usually  below  0.8€c/MB  (as  described  in  more  detail  in  the  accompanying  Review 
SWD, section 6.5.4). 

In  light  of  the  above,  we  conclude  that  it  would  be  appropriate  to  consider  a  maximum 
wholesale roaming cap for data of 0.85c€/MB in all MS.  Such a level would reflect the role 
of  the  legislative  maximum  as  a  safeguard  cap,  would  give  sufficient  assurances  of  cost 
recovery for all visited operators for the provision of wholesale roaming data services, would 
leave  significant  room  for  further  commercial  negotiation  with  most  visited  networks, 
including  in  many  of  the  countries  with  the  greatest  positive  balance  of  incoming  over 

46 Based on the autumn 2015 data collection. 
47  European  Commission,  Assessment  of  the  cost  of  providing  wholesale  roaming  services  in  the  EEA,  Final 
report, study conducted by TERA Consultants, to be published 

39 

 
 
 
 
                                                 
outgoing roaming traffic (Spain, Greece, Cyprus, etc.), and would at the same time represent a 
very  significant  reduction  by  reference  not  only  to  the  current  wholesale  cap  but  also  the 
currently observed wholesale market prices. As will be seen below, such a safeguard level – 
even  if  applied  without  any  commercial  discounts  –  gives  assurances  of  sustainability  for 
visiting  operators  which  are  not  significantly  different  from  those  under  a  cap  system  more 
precisely tailored to the cost estimates for individual countries. 

In the accompanying Review SWD we noted that Malta is the only country for which the unit 
cost  for  wholesale  roaming  voice  services  estimated  using  the  TERA  cost  model  (i.e. 
4.2c€/min) is above our proposed wholesale roaming price cap for voice under Option 3 (i.e. 
4c€/min).  In  Table  5  below  we  show  that  any  potential  loss  on  voice  from  a  wholesale 
roaming  price  cap  of  4c€/min  would  in  any  event  be  recovered  through  the  margin  on  data 
services, where the 0.85 c€/min wholesale price cap is well above the cost estimated using the 
TERA cost model for wholesale roaming data services in this country (i.e. 0.67c€/MB). 

Table 5: Wholesale roaming cost recovery in Malta 

In  the  case  of  SMS,  we  explain  in  section  5.8  of  the  accompanying  Review  SWD  that  we 
consider it appropriate to use a maximum wholesale roaming cap of 1€c/SMS based on the 
evidence from current wholesale roaming SMS prices for unbalanced traffic.  

We therefore conclude that the wholesale price caps that should be considered under Option 3 
are as follows: 

  voice: 4€c/min; 
  SMS: 1€c/min; 
  data: 0.85€c/MB. 

Below we assess RLAH's sustainability for operators against these caps.  

RLAH objective assessed with country-level data 

In Option 3, RLAH is applicable from 15 June 2017 with wholesale roaming prices capped at 
4 €c/min, 1 €c/SMS and 0.85 €c/MB. 

The effective, net, wholesale cost of providing retail roaming services is generated only by the 
outbound  roaming  traffic  in  excess  to  the  inbound  roaming  traffic.  For  balanced  traffic, 

40 

Maltavoice (min)26,412,594data (MB)221,908,441voice (EUR)-52,825data (EUR)399,4351 From TERA Consultants study  2 The balance is equal to: inbound roaming volume*(EU cap - estimated country unit cost)Total inbound roaming volume (2017 forecast)1Inbound wholesale roaming balance 2 
 
 
 
wholesale revenues  generated  by  incoming  roamers  effectively  balance  wholesale  payments 
for domestic customers who periodically travel outside the operator's domestic network48. 

48  Article  6d(3)  litera  (a)  of  the  Roaming  Regulation  refers  to  the  effective  wholesale  roaming  charges  for 
unbalanced traffic. 

41 

 
 
 
 
                                                 
Table  6  shows  the  average  net  annual  wholesale  cost  of  the  outbound  unbalanced  part  of 
RLAH49  at  Option  3's  EU  wholesale  roaming  caps  level  for  retail  roaming  providers,  per 
country (in euros in column (a) and as % of Annual Retail Revenue Per User, ARRPU50, in 
the  last  column).  For  countries  (or  services  within  the  country)  with  net  inbound  roaming 
traffic,  the  net  wholesale  cost  of  RLAH  is  set  at  zero  in  Table  6.  The  amount  of  roaming 
consumption  considered  in  the  simulation  is  based  on  the  assumption  that  roamers  would 
consume abroad in the EEA like at home (RLAH assumption). The roaming consumption is 
therefore obtained by multiplying, for each country, the average daily domestic consumption 
of voice, SMS and data in the country by the average number of days abroad in the EEA of 
citizens of the country51. The average daily domestic consumption itself is a forecast for 2017 
based  on  2014  consumption52  and  growth  forecast  used  in  the  cost  model  study53.  Table  6 
does not separate out the RLAH retail revenues, which, within the overall ARRPU, serve to 
cover the net wholesale cost of roaming services. 

49  Based  on  the  inbound/outbound  ratio  in  BEREC  Report  on  the  wholesale  roaming  market,  BoR(16)33, 
February 2016  
50 In the absence of a reliable time series of ARRPU over the last years to forecast ARRPU in 2017, ARRPU  is 
assumed to be the same as in 2017 as in 2014. 
51 For the purposes of this simulation, we assume, for each country, that the average travelling time abroad in the 
EEA and daily consumption are within fair use of roaming services. 
52 BEREC Report on the wholesale roaming market, BoR(16)33, February 2016, based on operators' replies to 
the autumn 2015 data collection 
53 % change between 2014 and 2017: +6% for voice and +3% for SMS for all countries; for data, the % change is 
country-specific (+300% on average). 

42 

 
 
 
 
                                                 
Table  6:  Average  net  annual  wholesale  cost  of  outbound  unbalanced  RLAH  at  Option  3's 
wholesale roaming caps as % of ARRPU, per country 

The  level  of  outbound  imbalance  established  by  BEREC  on  the  basis  of  2013  and  2014 
operators'  data  collected  in  autumn  2015  has  a  determining  impact  in  this  simulation.  By 
using the cap level, Table 6 provides an estimate of the cost of RLAH in the absence of any 
discount rate from the cap. With discounted rates, the effective cost of RLAH under Option 3 
will  likely  be  lower  than  presented  in  this  table.  Moreover,  it  should  be  noted  that  RLAH 
retail  revenues  corresponding  to  roaming  consumption  in  line  with  domestic  consumption 
patterns would still need to be taken into account before drawing conclusions. For example, 
for countries whose residents spend 10-11 days abroad per year on average, such RLAH retail 
revenues would be expected to correspond to around 3% of mobile ARRPU. Under Option 3's 
wholesale roaming caps, no country stands out with a net wholesale RLAH cost above 5% of 
ARRPU.54 The situation may be more difficult for MVNOs and more generally for operators 

54  There  is  an  ARRPU  ratio  slightly  higher  than  might  be  covered  from  RLAH  revenues  for  the  number  of 
projected travel days from Austria and Ireland, whereas the ratios for Finland, Norway and the Netherlands (all 
with wholesale projected costs at capped levels >1%) appear broadly consistent with their residents' respective 
travel patterns and the corresponding RLAH retail revenues. The inbound/outbound ratio of Austria in 2013 for 
data services available in the BEREC Report on the wholesale roaming review (BoR(16)33) is 0.3, significantly 
lower than the 2014 value of 0.57 and among the lowest across all countries and services. As this might be a data 

43 

ARRPU 2017 (€) (1)*Days abroad EEA (2)Domestic daily min 2017 (1)**Domestic daily sms 2017 (1)**Domestic daily MB 2017 (1)**outbound unbalanced share of roaming traffic voice (1)***outbound unbalanced share of roaming traffic SMS (1)***outbound unbalanced share of roaming traffic data (1)***net wholesale cost of RLAH at Option 3's EU caps (4/1/0.85 €c)            (a)(a) as % of ARRPUAustria17411.24.91.0133.80.1600.0000.4305.83.3Belgium19810.93.65.622.70.0000.0000.0000.00.0Bulgaria600.94.30.325.50.0000.0000.0000.00.0Croatia1455.45.31.951.00.0000.0900.0000.00.0Cyprus27712.19.14.8161.20.0000.0000.0000.00.0Czech Republic1085.14.61.825.20.0150.5150.3550.40.4Denmark19912.64.63.0136.50.2550.5450.0000.80.4Estonia896.44.90.7173.20.00.0Finland160114.71.0360.90.2550.4500.1004.02.5France21446.38.251.20.0000.0900.0000.00.0Germany1868.93.10.645.90.00.0Greece1370.86.31.018.00.0000.0000.0000.00.0Hungary1042.53.80.330.30.0250.0000.0000.00.0Iceland05.70.00.00.00.0Ireland28610.96.34.0117.90.5900.5850.6709.23.2Italy1402.25.01.457.60.0350.0000.0000.00.0Latvia4454.41.691.90.0600.4500.0000.10.2Liechtenstein5260.0Lithuania445.15.44.654.30.0950.4600.0000.20.5Luxembourg28027.13.52.886.80.0000.0000.0000.00.0Malta1623.52.444.60.0Netherlands253153.70.636.00.5200.3400.7154.51.8Norway30512.66.02.794.60.4550.4500.5757.42.4Poland7234.22.651.10.3800.6000.0000.20.3Portugal1391.54.34.239.30.0000.0000.0000.00.0Romania591.48.02.315.10.4400.6750.3850.30.5Slovakia1565.94.91.125.40.5150.5600.6001.40.9Slovenia1646.95.23.039.10.0000.4150.6751.61.0Spain1871.84.40.142.20.0000.0000.0000.00.0Sweden22812.15.52.6266.20.0000.4600.0000.10.1UK2587.64.83.765.70.2450.3700.4352.30.9EEA****1725.74.72.50.00.0000.0000.0000.00.0Data: (1) BEREC Report on the wholesale roaming market, BoR(16)33, February 2016, based on operators' replies to the autumn 2015 data collection           (2) BEREC Analysis of the impacts of "Roam Like At Home", BoR(14)209, December 2014Values in blue italics are imputed.*ARRPU 2017 is assumed to be the same as in 2014** forecasted change in consumption between 2014 and 2017: +16% for voice, +328% for data, -40% for SMS*** 1 - inbound/outbound (average over 2013 and 2014) if inbound/outbound < 1, 0 otherwise; Austria: 2014 only**** weighted average 
 
 
                                                 
 
with a very large excess of outbound over inbound roaming traffic55  because these operators 
do not benefit from hosting roaming traffic in return.   

Setting EU wholesale roaming caps at 4 €c/min, 1 €c/SMS and 0.85 €c/MB would therefore 
meet the objective of the present initiative to ensure that national wholesale roaming markets 
function in such a way that, from 15 June 2017, retail roaming surcharges may be sustainably 
abolished for all or virtually all operators in the EU in order to avoid distortions on the home 
markets. 

RLAH objective assessed with operator-level data 

In  line  with  our  assessment  of  Option  2  above,  we  have  also  conducted  analysis  on  the 
sustainability  of  Option  3  at  the  operator  level  (as  indicated  above  when  describing  our 
assessment  in  Option  2,  we  only  present  here  the  final  results,  additional  details  on  our 
approach can be found in Annex 4).  

Table 7: Sustainability results for Option 3 under the Base case scenario modelled 

Option  3  –  Single  EU-
wide cap 
Note: the row adds up to more than 100% due to rounding. 

Positive sustainability 
88% 

Sustainability % 

<1% 
5% 

1-3% 
2% 

3-5% 
5% 

>5% 
2% 

Table 7 above shows that Option 3 results in higher percentage of operators with a positive 
sustainability  (88%),  compared  to  Option  2  (66%).  This  result  is  driven  by  the  fact  that  in 
Option 3 the wholesale price caps are sufficiently low to ensure that they are below the retail 
prices in the great majority of EU countries, thereby minimising the potential for a negative 
retail  roaming  margin  for mobile operators that are  net senders of roaming  traffic (i.e. have 
higher outbound than inbound roaming traffic). 

Cost recovery at wholesale level 

As shown above, the wholesale roaming caps set under this option are largely dictated by the 
costs of providing wholesale roaming services in the higher-cost countries for the respective 
component services. Each cap is above the estimated costs in virtually all EEA countries, is 
close  to  such  levels  in  all  countries,  and  is  in  any  event  set  at  a  level  to  allow  all  visited 
operators  to  recover  their  overall  costs  of  provision  of  the  three  component  wholesale 
roaming services. This level also leaves economic space for most visited operators to engage 
in  wholesale  competition  below  the  caps56.  We  expect  a  fair  potential  for  competitive 
negotiation  for  most  operators,  as  evidenced  under  the  current  regime.  Even  if  RLAH 
obligations may give visiting operators less margin for manoeuvre57, there remain a number 
of parameters in which they can make their traffic volumes more attractive to host operators 

anomaly, the 2013 inbound/outbound data ratio for Austria was not considered. If it were, the annual net RLAH 
wholesale cost would represent 4.4% of annual ARRPU in Austria.   
55 In particular in Finland, Sweden, Denmark, Norway, Estonia, Latvia, Lithuania, Luxembourg, Cyprus, Austria 
and Ireland.  
56 In specific cases of significant imbalances of termination rates paid to the terminating operator compared to 
the wholesale price charged, disputes in this regard can also benefit from BEREC guidance in this regard. 
57 See the accompanying Review SWD, section 7 
57 BEREC Report on the wholesale roaming market, BoR(16)33, February 2016 (section 3.5) 

44 

 
 
 
                                                                                                                                                         
in return for lower prices where the latter can still recover costs and make a margin on bigger 
volumes. 

For  countries  whose  estimated  costs  are  closer  to  the  EU  voice  cap  set  in  this  option,  the 
margin  allowed  by  this  option's  data  cap  in  these  countries  is  more  than  adequate to  ensure 
aggregate cost recovery on wholesale provision in these countries. Reciprocally, for countries 
whose estimated costs are closer to the EU data cap set in this option, the margin allowed by 
Option  3's  voice  cap  in  these  countries  achieves  a  similar  effect.  Altogether,  this  option 
ensures aggregate cost recovery at wholesale level for all countries. 

Setting  EU-wide  caps  at  an  average  cost  level  across  EEA  countries  or  at  the  level  of  the 
lower-cost  country  is  not  considered  as  this  would  not  ensure  cost  recovery  by  efficient 
operators in all EEA countries. 

Permanent roaming 

As noted by operators in reply to the public consultation, ensuring that the costs of providing 
wholesale roaming services are recovered mitigates the risk of unwanted permanent roaming. 
In  addition,  the  Roaming  Regulation  provides  that  the  obligation  of  providing  wholesale 
roaming  access  upon  reasonable  access  (Article  3)  may  be  lifted  by  the  visited  operator 
should the wholesale roaming access seeker use this access for other purposes than providing 
retail roaming services to its roaming customers while periodically travelling. 

Implementation costs 

Option  3  does  not  involve  any  additional  implementation  costs  for  public  authorities 
compared to the current situation since the new EU caps are simply set at a lower level than 
they are today. Under this option, NRAs monitor and supervise compliance with the new EU 
wholesale  roaming  caps  as  they  have  done  with  current  EU  wholesale  roaming  caps. 
Implementation costs for mobile operators should be limited to the adjustment of the billing 
system for wholesale roaming services with the new values of the EU caps. 

Digital Single Market 

Under  Option  3,  the  above  simulations  show  that  the  potential  non-sustainability  of  RLAH 
remains exceptional, i.e. in  cases of operators based  in a few countries, with  outbound-only 
roaming  traffic  and  paying  at  the  cap  level.  This  outcome  is  without  prejudice  to  what  the 
detailed sustainability applications will be, in accordance with the methodology to be set out 
in  the  forthcoming  Commission  implementing  act,  and  without  prejudice  to  how  many  of 
them will actually be filed by operators and accepted by NRA if this option is chosen. 

Option  3  therefore  achieves  widely  sustainable  RLAH  in  the  EU  contributing  to  the  DSM 
specific goal of making borders meaningless for the use of mobile services within the EU. It 
does so by imposing single EU-wide caps, thereby not artificially fragmenting the wholesale 
roaming market (in which commercial negotiation can still find the appropriate price level in 
cases where wholesale providers' costs are below the safeguard caps). 

6.4. Option 4: set country-specific wholesale roaming caps 

Wholesale price caps considered in Option 4  

In  section  5  of  the  accompanying  Review  SWD,  we  have  presented  cost  estimates  for 
wholesale roaming services based on an analysis of different sources of information, namely: 

45 

 
 
the TERA Consultants' cost model; 

 
  an  alternative  approach  to  estimate  the  costs  of  wholesale  roaming  voice  services 

based on national mobile termination rates; and 
retail unit prices in MS from a Commission study on retail prices in the EEA. 

 

In Table 4 above (section 6.3) we present final cost estimates for wholesale roaming services 
in  each  of  the  29  countries  (28  MS  and  Norway)  considered  in  TERA  Consultants'  cost 
model. 

As we describe in the accompanying Review SWD's section 5, these cost estimates include: 

 

the  total  wholesale  roaming  costs  estimated  by  TERA  (including  network  costs, 
roaming-specific costs and the impact of seasonality on roaming costs), as discussed in 
section 5.4 of the accompanying Review SWD; 

  an allocation for the termination rate that the visited network operator needs to pay the 
terminating  network  operator  for  terminating  a  call  on  its  network,  as  discussed  in 
section 5.5 of the accompanying Review SWD; and 

  an  allocation  for  the  transit  costs  that  the  visited  network  operator  needs  to  pay  for 
routing  a  call  to  the  terminating  network  operator  or  to  send  data  traffic  back  to  the 
home network, as discussed in section 5.6 of the accompanying Review SWD.  

Under  Option  4  we  consider  wholesale  price  caps  based  on  the  cost  estimates  presented  in 
Table 4 above (section 6.3). 

RLAH objective assessed with country–level data 

The effective, net, wholesale cost of providing retail roaming services is generated only by the 
outbound  roaming  traffic  in  excess  to  the  inbound  roaming  traffic.  For  balanced  traffic, 
wholesale revenues  generated  by  incoming  roamers  effectively  balance  wholesale  payments 
for domestic customers who periodically travel outside the operator's domestic network58. 

Based  on  operators'  data  from  the  autumn  2015  data  collection,  BEREC  has  calculated,  for 
each  EEA  country,  the  distribution  of  outbound  roaming  traffic  across  all  destination 
countries  in  the  EEA59.  However,  the  (reciprocal)  distribution  of  inbound  roaming  traffic 
received by a given EEA country from the different EEA countries is not available. Therefore, 
the bilateral balance of roaming traffic between each pair of EEA countries is not available. 
As  a  consequence,  it  is  not  possible  to  compute,  for  each  country,  the  average  net  annual 
wholesale cost of the outbound unbalanced part of RLAH60 at the level of Option 4's country-
specific  wholesale  roaming  caps  for  retail  roaming  providers.  As  the  cost-oriented  country-
specific  caps  are  all  below  the  level  of  the  EU  caps  of  Option  3,  this  cost  is  necessarily 
smaller, so that the RLAH exposure of retail roaming providers is smaller than the exposure 
shown  in  Table  6  for  Option  3.  Based  on  a  simulation  of  the  average  RLAH  exposure  at 
country  level  therefore,  Option  4  can  only  raise  less  RLAH  sustainability  concerns  than 
Option 3. 

RLAH objective assessed with operator-level data 

58  Article  6d(3)  litera  (a)  of  the  Roaming  Regulation  refers  to  the  effective  wholesale  roaming  charges  for 
unbalanced traffic. 
59 BEREC Report on the wholesale roaming market, BoR(16)33, February 2016: Table 6 in Annex 1 
60  Based  on  the  inbound/outbound  ratio  in  BEREC  Report  on  the  wholesale  roaming  market,  BoR(16)33, 
February 2016  

46 

 
 
 
                                                 
In line with our assessment of Option 2 and 3 above, we have also conducted analysis on the 
sustainability  of  Option  4  at  the  operator  level  (as  indicated  above  when  describing  our 
assessment in Option 2 and 3, we only present here the final results, additional details on our 
approach can be found in Annex 4). Again, we present our results for the Base case scenario 
modelled in Table 8 below.  

Table 8: Sustainability results for Option 4 under the Base case scenario modelled 

Sustainability % 

Positive 
sustainability 

<1% 

1-3% 

3-5% 

>5% 

Option 4 – Country-
specific caps 
Note: The row adds up to more than 100% due to rounding 

88% 

5% 

3% 

3% 

2% 

Table 8 above shows that Option 4 results in the same percentage of operators with a positive 
sustainability than Option 3 (88%), albeit higher than Option 2 (66%). Therefore, according to 
our  analysis  it  can  be  concluded  that  setting  country-specific  wholesale  price  caps  does  not 
seem to improve the sustainability of RLAH at operator level.  

Cost recovery at wholesale level 

The  wholesale  roaming  caps  set  under  this  option  are  at  the  estimated  costs  of  providing 
wholesale  roaming  services  in  each  EEA  country.  This  should  in  principle  allow  visited 
operators in each country to recover their costs. However, there could be risks of insufficient 
cost recovery for some visited operators if the cost model misses some specificities or in case 
of path-dependent/historical additional costs for some operators.  

There is a risk that visited operators not recovering their costs increase their domestic prices 
(waterbed effect in the visited country). 

Country-specific caps may not adequately reward efficiency and innovation, as operators who 
manage to keep costs low would be hit twice: they would face large out-payments to higher-
cost operators, and they would be forced by lower caps to impose low charges to the higher-
costs operators in return. 

It may be argued that the economic rationale for cost-orientated regulation on the wholesale 
roaming  market  may  be  contested,  as  there  is  no  monopoly  nor  dominance  or  significant 
market power situation and that cost-oriented regulation would therefore be disproportionate. 
Cost-orientation  could  in  any  case  lower  incentives  to  invest  to  provide  wholesale  roaming 
services.  These  risks  cannot  be  entirely  evacuated  in  an  approach  such  as  that  of  option  3, 
where  the  necessary  balance  between  wholesale  cost  recovery  and  the  attainment  of  a 
maximal level of RLAH, with only exceptional derogations on grounds of unsustainability of 
domestic charging models, leads towards setting caps close to the cost recovery level for the 
highest cost operators / countries. However, this is not a reason to generalise these potential 
disadvantages to all Member States, as option 4 could do, to an extent not necessary to reach 
the primary objectives of this wholesale review. 

Finally,  although,  the  inclusion  of  wholesale  roaming  specific  costs  within  the  wholesale 
roaming caps ensures in principle higher levels of the wholesale roaming caps than market-
driven domestic wholesale prices, cost-oriented regulation of wholesale roaming access may 

47 

 
 
  
  
entail  some  risks  of  de  facto  price-regulating  and  distorting  the  visited  country's  domestic 
markets which are deemed competitive by the Commission and NRAs.  

Permanent roaming 

The  lower  the  caps,  the  higher  the  risk  of  non-cost  recovery  and  the  risk  of  unwanted 
permanent  roaming.  By  removing  the  economic  safeguard  of  an  above-costs  cap,  this  cost-
orientation  option  entails  the  highest  risk  of  unwanted  permanent  roaming  and  arbitrage.  In 
particular,  new  actors  may  enter  national  markets  and  use  the  cheap  roaming  access  to 
compete  on  the  national  markets,  thereby  distorting  national  competitive  dynamics  on  the 
basis of a regulatory intervention solely designed to reconcile RLAH with domestic pricing in 
other markets with other costs. 

In order to mitigate the unwanted permanent roaming risk, the Roaming Regulation provides 
a  safeguard,  namely  that  the  obligation  of  providing  wholesale  roaming  access  upon 
reasonable  request  (Article  3)  may  be  lifted  by  the  visited  operator  should  the  wholesale 
roaming  access  seeker  use  this  access  for  other  purposes  than  providing  retail  roaming 
services  to  its  roaming  customers  while  periodically  travelling.  There  is  no  certainty  as  to 
whether this safeguard may act as effectively as the economic (cap) safeguard. 

Implementation costs 

This option involves many implementation challenges and complexities.  

First of all, this option puts a considerable administrative burden on NRAs. NRAs would have 
to run the common cost model with their own model inputs and set caps accordingly. 

The national caps set by NRAs with reference to cost estimates they obtain using the common 
cost model developed by the Commission would have to be notified to the Commission after 
the entry into force  of the new Regulation. The national  caps set by NRAs would  therefore 
have to be applicable from 15 June 2017, while being reviewed by the Commission61. In case 
the  Commission's  assessment  leads  to  a  different  outcome  from  that  of  the  NRA,  the  NRA 
would have to  change the national cap, so as  to comply  with  the Commission's assessment. 
This would lead to legal uncertainty, litigations and compensation requests. 

The uncertainty about the final level of country-specific caps during at least several months 
after  June  2017  would  create  a  very  unstable  context  for  operators  to  implement  RLAH 
offers.  The  decision  of  some  operators  to  apply  or  not  for  sustainability  exemption  may 
depend  on  the  final  level  of  the  caps  in  certain  countries.  The  uncertainty  on  the  wholesale 
side inevitably leads to uncertainty on the retail side. 

The common cost model to be applied by NRAs, with its necessary built-in flexibility, may 
lead  to  variations  resulting  from  policy  choices  rather  than  from  objective  factual  elements. 
Results  may  not  be  comparable.  Data  quality,  consistency  and  updates  may  differ  across 
NRAs. There are also risks that arbitrary or necessarily subjective adjustments may be made 
to the NRA's model inputs, involving risks that the model produces unreliable results.  

61 Review of cost estimates by the Commission would be needed in order to ensure consistency of cost estimates 
and check compliance of national measures with the common cost model, in order to avoid divergences which 
could result in unbalanced national price caps, with corresponding distortions in roaming revenues flows. This 
would  be  needed,  taking  into  account  that  on  the  other  hand  retail  regulation  (RLAH)  would  be  binding  and 
uniform across Europe. See also the analysis of the limited incentive of individual NRAs, when acting on their 
own, to solve roaming problems rooted in wholesale roaming rates – see section 3 above. 

48 

 
 
                                                 
Country-specific caps would then require a cumbersome and frequent update from NRAs and 
the  Commission  to  remain  relevant  in  the  light  of  market  evolution  in  every  EU  Member 
State. 

Finally,  this  option  also  puts  a  considerable  burden  on  the Commission  as  it  would  have  to 
review and assess the cost estimates obtained by NRAs and the national caps set by them, and 
then  to  repeat  this  exercise  periodically.  As  shown  above,  the  gain  in  terms  of  RLAH 
sustainability  from  Option  4  relative  to  Option  3  is  not  demonstrated  or  even  slightly 
negative,  while  the  overall  additional  resources  it  would  entail  at  national  and  EU  level  is 
considerably higher relative to Option 3. 

By  fragmenting  the  rules  at  wholesale  level,  this  option  also  implies  more  substantial 
implementation costs for mobile operators than in the other options, in particular costs related 
to  the  billing  system  adjustment  and  to  increased  complexities  in  wholesale  roaming 
negotiations and contract management.  

Digital Single Market 

By  ensuring  that  RLAH  is  sustainable  for  a  maximum  of  operators  in  the  EU,  Option  4  in 
principle fulfils the DSM specific goal of making borders meaningless for the use of mobile 
services within the EU.  

However, Option 4 is perceived by many stakeholders as fragmenting the wholesale roaming 
market  with  country-specific  caps  instead  of  the  EU-wide  caps,  valid  in  all  Member  States, 
used to regulate the market so far. Country-specific regulation is contrary to the objective of a 
digital  single  market,  and  as  such  represents  a  step  backwards.  It  is  more  complex  and  less 
transparent than EU-wide caps. 

In  addition,  Option  4  may  also  lead  to  some  fragmentation  of  the  retail  roaming  market. 
Operators consider that country-specific wholesale roaming caps would lead to differentiation 
of  retail  roaming  offers  as  the  latter  would  depend  on  the  country  visited  by  the  roaming 
customer;  this  would  be  a  very  complex,  fragmented  and  unfriendly  outcome  for  the 
consumer. 

6.5. Additional  Measures:  Enable  operators  to  freely  agree 

wholesale roaming terms which are not unit-based 

This option may be proposed in addition to the chosen cap-based option among Options 2 to 
4, in what would constitute a special type of regulatory menu offered to the operators62. This 
section presents the expected effects of including this option in the Commission's proposal 

This  option  gives  parties  the  possibility  to  negotiate  a  de-regulated  alternative  to  wholesale 
roaming caps where both visiting and visited operators freely agree to waive the application 
of maximum unit-based wholesale caps, hence concluding alternative pricing agreements (e.g. 
capacity-based pricing). This option guarantees that, once a contractual agreement outside the 
regulated price-cap reference has been voluntarily and freely agreed by both parties, neither 
party would be entitled to revert to the unit-based cap during the contractual period. Thus, it 
eliminates potential obstacles to  alternative pricing negotiations due to opportunistic  ex post 
application of mandatory unit-based caps, disregarding initial contractual arrangements.  

62 Laffont J.J and Tirole, J. (2001). Competition in Telecommunications. MIT Press. Chapter 2.  

49 

 
 
                                                 
Taking into account the new RLAH context, this measure, in line with the Better Regulation 
guidelines, seeks to promote a market-led solution as far as possible, which could help phase 
out wholesale price regulation in the future. 

Indeed,  in  the  wholesale  roaming  market,  there  is  a  strong  level  of  uncertainty  regarding 
actual  volume  consumption,  especially  for  data.  The  RLAH  policy,  which  gives  security  to 
the  consumer,  and  links  usage  to  domestic  tariffs  that  are  generally  not  unit-based  and 
potentially unlimited, could translate into higher volume consumption, which increases even 
further the level of uncertainty.  

Moreover,  the  cost  structure  of  domestic  offers  (mostly  fixed  capex  expenses)  often  differs 
from the roaming cost structure (mostly variable opex expenditure), as also highlighted in the 
public consultation. The RLAH policy could also increase this divergence between domestic 
and roaming cost structure.  

For these reasons there may be cases where alternative agreements, waiving the application of 
a unit based cap, can be potentially attractive to both parties. If the cap remains referential, the 
implicit  unit  prices  resulting  from  contracts  that  ground  price  upon  probable  (and  not  unit-
based or actual) amount of customer consumption may be above the cap level. In exchange, 
the  visited  operator  would  be  taking  greater  volume-related  risks,  which  could  potentially 
bring implicit final unit prices down. Moreover, in practice operators' concern is more related 
to meeting overall revenue targets rather than lowering costs, a dynamic that is at the root of 
the bilateral exchanges we have observed in the market. Thus, the possibility of stable income 
in a RLAH context can also make this option attractive and economically efficient.  

In  particular,  capacity-based  contracts,  which  could  in  principle  incorporate  this  economic 
dynamic,  have  other  features  and  built-in  incentives  that  bring  a  positive  impact  to  the 
wholesale market63: 

  Capacity-based  contracts,  under  which  visiting  operators  buy  a  percentage  of  an 
MNO's mobile network capacity, allow the visited operator to have a better estimation 
of  the  visiting  operator's  estimated  initial  needs,  thus  optimizing  its  network 
investment strategies. 

  Moreover, capacity-based contracts provide stable revenue commitments to the visited 
network,  which  can  incentivise  both  visited  and  visiting  networks  to  include  risk 
variables in their contracts. 

  Capacity-based  contracts  are  better  suited  to  dealing  with  peak-loads  –  for  example 
capacity can be priced on a monthly basis to deal with vacation periods or subject to 
variable QoS agreed by the parties.  

  The better the management efficiency and technology of the visited operator, the more 
it  would  be  willing  to  take  risks  related  to  unpredicted  inbound  traffic.  While 
rewarding efficiency, the predictable economies of scale of the RLAH regime could be 
better distributed. 

63 See in this regards also the elements assessed by BEREC in its Report on the wholesale roaming market, BoR 
(16) 33, page 27 and 35. 

50 

 
 
 
                                                 
  The  visiting  network  has  not  only  an  incentive  to  grow  and  utilise  the  full  initial 
capacity,  but  also  to  go  beyond  it  and  contract  an  additional,  presumably  cheaper 
bandwidth  unit.  This  gives  an  incentive  to  the  visiting  operator  to  extend  the 
availability of RLAH traffic in its tariff models or to build re-selling business models, 
if contractually possible.  

  Capacity-based  models  are  in  principle  better  situated  to  deal  with  different  type  of 

network speeds and help Voice-over-LTE (VoLTE) models extend to roaming.  

Since this option will be fully optional for the parties, it does not impinge on the effectiveness 
of any other main regulatory option. 

7.  Comparison of options 

7.1. Stakeholders'  views  on  the  most  appropriate  regulatory 

approach 

Almost  all  operators  responding  to  the  public  consultation64  agree  that  price  caps  set  at  EU 
level  valid  for  all  Member  States  is  the  most  appropriate  approach  to  continue  regulating 
wholesale roaming markets in the RLAH context65. 

Operators  are  however  divided  as  to  what  the  level  of  these  caps  should  be  to  enable 
sustainable  RLAH.  Only  28%  of  responding  operators  (certain  historic  incumbents  and 
operators with a large footprint, and generally operators with large inbound roaming traffic) 
are  of  the  view  that,  under  current  regulation,  the  functioning  of  the  wholesale  roaming 
markets  would  deliver  RLAH  in  2017;  in  contrast,  53%  (smaller  operators,  MVNOs,  and 
operators  with  large  outbound  roaming  traffic)  are  of  the  view  that  they  would  not  deliver 
RLAH  in  2017.  The  proportion  of  operators  which  do  not  know  (18%)  is  noticeable,  while 
only one operator thinks it depends on the Member State.  

As  a  consequence  of  different  perceptions  of  the  functioning  of  the  wholesale  roaming 
market,  operators  are  divided  along  the  same  sender/receiver  line  as  to  what  the  most 
appropriate regulatory wholesale level measure can be to enable sustainable RLAH in 2017: 
28% of responding operators favour keeping current caps unchanged or lifting any wholesale 
regulation, against 58% who think that wholesale roaming price caps should be lowered. 

In the small sample of NRAs and governments who responded to the public consultation (9 
out of 9 Member States in total), those in countries with large inflows of roamers defend the 
status quo (no change in the wholesale roaming price caps), while those in countries sending 
large outflows of roamers call for lower caps. 

Individual  consumers  and  their  associations  are  cautious  in  expressing  views  on  wholesale 
roaming  markets  since  they  do  not  face  these  markets  directly.  56%  of  the  individual 
consumers do not indicate the regulatory measure they see as most appropriate. 63% of those 
of them expressing a view on this, and all consumer associations expressing a vie won this (6 
out of 7), defend the view that caps must be lowered. 69% of consumers expressing a view 

64 For a detailed analysis of the results of the public consultation, see Annex 2. 
65  Only  4 (including 2 respondents  from  the  same  company)  out of  the  40  mobile  operators  responding  to  the 
consultation argue that lifting wholesale regulation would be the best approach. 

51 

 
 
                                                 
favour  an  EU-wide  cap  over  country-specific  caps.  3  out  7  consumers'  association  consider 
that caps should remain EU-wide and 4 consumers' associations do not reply. 

Finally,  some  stakeholders  suggest  additional  regulatory  measures  next  to  the  cap  measure 
which are also considered in BEREC Report on the wholesale roaming market66. There is in 
particular a widespread and strong call from operators for further harmonisation of MTRs, in 
addition to the roaming regulation, as MTRs are an important input for roaming services. In 
order to enable the visited operator to prevent permanent roaming, some operators suggest to 
allow  the  visited  operator  to  apply  a  wholesale  surcharge  (higher  than  the  cap)  for  those 
roamers  who  are  roaming  more  than  periodically  (i.e.  a  fair  use  policy  at  wholesale  level). 
Finally,  MVNOs  suggest  specific  measures  to  enable  them  to  benefit  from  discounted 
wholesale  roaming  prices,  such  as  obliging  the  MNOs  to  pass  discounts  they  obtain  for 
wholesale roaming services on to their hosted MVNOs, or obliging MNOs to include RLAH 
in their wholesale domestic offer to MVNOs. 

Stakeholders'  views  expressed  in  response  to  the  public  consultation  on  the  different 
regulatory options are consistent with BEREC's analysis of operators' views in response to the 
autumn 2015 data collection67.   

Based  on  this  data  collection,  BEREC  reports  some  operators'  views  about  capacity-based 
wholesale roaming charges. Some operators think that wholesale tariffs on a per-unit basis are 
becoming problematic and obsolete because the majority of domestic retail mobile packages 
today  are  “flat”  offers  including  large  or  even  “unlimited”  volumes  of  minutes,  SMS  and 
MBs.In  spite  of  that,  up  to  now,  only  few,  if  any,  operators  were  willing  to  negotiate  flat 
wholesale deals. These MNOs believe that the dynamics of the retail market will allow for the 
introduction of pure capacity models in the long term as data traffic increases, including the 
introduction  of  VoLTE.  This  may  require  introducing  quality-of-services  criteria  linked  to 
data wholesale services.  

While capacity-based agreements may be appealing, a number of operators oppose changing 
the  current  regulation  based  on  the  current  wholesale  roaming  unit  rate  structure  into  one 
exclusively based on capacity. According to them, there is uncertainty regarding traffic flows 
in  a  RLAH  environment  and  fixed  fees  for  roaming  services  would  mean  that  the  financial 
risk  is  100%  on  home  operators.  They  consider  that  this  model  would  potentially  exclude 
small operators with very low demand on volumes. 

7.2. Commission's assessment of the best option 

Option 1 (baseline scenario: no EU action) meets the objective of cost recovery at wholesale 
level (as no EU action would leave wholesale roaming caps at their current level), but does 
not  deliver  the  policy  objective  set  in  the  Roaming  Regulation  to  enable  RLAH  in  the  EU 
from  15  June  2017.  Under  this  option,  the  RLAH+  transitional  regime,  whereby  operators 
may apply a roaming surcharge to roaming customers in the EU in addition to the domestic 
price, continues to apply and is not expected to lead to the RLAH regime in the medium to 
long-term. Under this option, the EU would fail to deliver on its promise to EU citizens, set 
out  in  EU  legislation  and  widely  communicated  to  the  public  over  the  last  year,  to  abolish 
retail roaming surcharges from 15 June 2017. The consumer welfare gain to be provided by 
RLAH would be entirely missed. This option can therefore not be retained. 

66 BEREC Report on the wholesale roaming market, BoR(16)33, 29 February 2016 (section 3). 
67 BEREC Report on the wholesale roaming market, BoR(16)33, February 2016 (section 3.5) 

52 

 
 
                                                 
Under  Option  2,  setting  the  wholesale  roaming  caps  after  15  June  2017  at  the  level  of  the 
Roaming  Regulation  currently  in  force  would  fulfill  the  condition  set  in  the  Roaming 
Regulation to make the retail RLAH obligation applicable from that date. It would also meet 
the  wholesale  level  cost  recovery  objective.  Because  a  number  of  operators  would  provide 
RLAH under the new rules, the RLAH consumer welfare gain would not be entirely missed as 
in Option 1. As such, Option 2 is preferable to Option 1. However, as shown in the analysis of 
Option 2 (section 6.2), a sizeable share of operators (at least 20% in our sample and/or in at 
least six countries) would not be able to sustain their domestic charging model under RLAH 
with the current level of wholesale roaming caps. Option 2 therefore presents significant risks 
of distortion of competition and domestic prices increases in the home markets where RLAH 
sustainability is not ensured. As a result, the RLAH consumer welfare gain would be missed 
for a high proportion of consumers. 

Option  3  (setting  EU  cap  at  a  lower  level  than  currently)  also  meets  the  objective  of  cost 
recovery at wholesale level. The EU cap level under this option (4€c/min, 1 €c/SMS and 0.85 
€c/MB) is above the costs of providing wholesale roaming services by visited operators in all 
EU  countries,  as  evidenced  by  already  observed  wholesale  roaming  prices  in  the  market, 
domestic  wholesale  prices,  and  estimates  provided  by  a  cost  model68.  For  countries  whose 
estimated costs are closer to the EU voice cap set in this option, the margin allowed by this 
option's data cap in these countries is more than adequate to ensure aggregate cost recovery 
on  wholesale  provision  in  these  countries.  This  cap  level  therefore  ensures  the  recovery  of 
costs  of  providing  wholesale  roaming  services  by  visited  operators,  leaves  space  for 
competition below the cap, keeps investment incentives in the visited markets, and may act as 
a  safeguard  against  unwanted  permanent  roaming  and  the  potentially  resulting  national 
market distortions. 

On  the  retail  side,  the  cap  level  under  Option  3  makes  RLAH  sustainable  in  the  EU.  The 
country level tables (Table 2 and Table 6 in section 6) indeed show that Option 3 substantially 
improves the sustainability of RLAH across EEA countries compared to Option 2, leaving no 
country with an average annual net wholesale cost of RLAH above 5% of ARRPU, and only 
two  -  Ireland  and  Austria  -  where  such  wholesale  costs  exceed  (to  a  limited  extent)  the 
proportion  of  retail  revenue  corresponding  to  the  annual  average  number  of  days  travelled 
abroad in the EEA by residents of the country in question. Option 3 results in a significantly 
higher  percentage  of  operators  with  a  positive  sustainability  (91%),  compared  to  Option  2 
(70%)  (see  Table  9  below  which  summarizes  the  sustainability  results  obtained  at  operator 
level under Options 2, 3 and 4). Option 3's wholesale price caps are sufficiently low to ensure 
that they are below the retail prices in the great majority of EU countries, thereby minimising 
the potential for a negative retail roaming margin for mobile operators that are net senders of 
roaming traffic (i.e. have higher outbound than inbound roaming traffic). 

As only a very limited number of operators (if any) may be expected to be entitled to derogate 
from  RLAH,  Option  3  would  allow  to  benefit  from  the  RLAH  consumer  welfare  gain,  in 
contrast to Option 1. Compared to the cap level of Option 2, the lower cap level of Option 3 
reduces considerably the proportion of consumers who would not benefit from RLAH, limits 
the possibly asymmetric impact of RLAH on operators in home markets, and reduces the risks 
of market distortions and increase in retail prices in home markets. 

As to Option 4 (cost-oriented country-specific caps), it presents important risks as regards the 
cost recovery of wholesale roaming services, as well as the risk of de facto regulating national 

68 See accompanying Review SWD on the wholesale roaming markets in the EU, section 5 

53 

 
 
                                                 
wholesale markets. It also implies considerable implementation challenges, complexities and 
costs that none of the other options implies.  

Under  Option  4,  the  proportion  of  consumers  that  would  have  sustainable  RLAH  is  higher 
than  in  Options  1  and  2,  but  similar  to  Option  3,  since  Option  4  does  not  improve 
substantially  the  sustainability  of  RLAH  in  the  EU  compared  to  Option  3  (see  Table  9).  It 
may even worsen the situation in some particular instances where the reduction in wholesale 
roaming revenues due to the lower country cap (than Option 3's EU cap) in a given country is 
larger  than  the  reduction  in  wholesale  roaming  payments  due  to  lower  country  caps  (than 
Option  3's  EU  caps)  in  the  other  countries.  This  makes  this  cost-orientation  option 
unnecessary and disproportionate to achieve the overall RLAH policy objective.  

Table  9:  Sustainability  results  for  each  regulatory  option  under  each  of  the  three  scenarios 
modelled 

Notes: each row adds up to more than 100% due to rounding. 

A summary of the comparison of the different options is shown in Table 10. 

The Commission therefore considers that Option 3 best fulfils the policy objectives. Annex 3 
summarizes who is affected by the proposal and how. 

In addition, the Commission proposes giving flexibility to operators to agree wholesale terms 
which  are  not  unit-based  in  order  to  promote  market-led  solutions  as  far  as  possible.  In 
particular,  we  anticipate  a  possible  interest  from  operators  for  unregulated  capacity-based 
contracts. Such contracts may bring a number of benefits to both parties of a bilateral roaming 
agreement,  in  particular  since  the  logic  of  RLAH  means  that  roaming  becomes  included  in 
domestic bundles which are not charged on a unit basis. At the same time, no operator could 
be forced to agree on such contract, in which case the regulated cap (Option 3) would apply. 
This  addresses  the  concerns  of  some  operators  opposed  to  abandoning  the  unit  cap  based 
regulation model for a regulation exclusively based on a capacity model. Finally, should such 
alternatives to the regulated cap-based solution (Option 3) not be taken up by the market at 
all, this would have no negative impact on the outcome of the regulated solution itself. 

54 

Positive sustainability<1%1-3%3-5%>5%Option 2 – Current caps 66%6%5%5%19%Option 3 – Single EU wide cap88%5%2%5%2%Option 4 – Country-specific caps88%5%3%3%2%Sustainability % 
 
 
  
Table 10: Comparison of options: effectiveness, efficiency, stakeholder views and coherence 

Option 

Effectiveness 
(- negative; 0 neutral; +positive) 

versus 

objectives 

Stakeholders' 
(- negative; 0 neutral; +positive) 

views 

Coherence 
(- negative; 0 neutral; +positive) 

(+) 
Operators would potentially support the 
prolongation of the RLAH+ regime beyond 15 
June 2017 as this allows them to still continue to 
apply retail roaming surcharges to cover their 
costs. 

(-) 
In contradiction with the Roaming Regulation's 
requirement to enable RLAH from 15 June 
2017 in the EU. 

(+) 
Consistent with the Roaming Regulation's 
requirement of wholesale cost recovery and 
keeping safeguards against unwanted 
permanent roaming 

Option 1 - 
Base line;  
no EU 
action 

(-)   
RLAH is not applicable from 15 June 2017 in 
the EU. 

Consumers and business users continue to pay 
retail roaming surcharges when roaming abroad 
in the EU. 

(+)   
Recovery of costs of providing wholesale 
roaming services is ensured, preserving 
incentives to invest in visited networks and 
avoiding distortion of domestic competition 
in the visited markets. 

In particular, the existing wholesale roaming 
caps act as an effective safeguard against 
unwanted permanent roaming; additional 
safeguard in the Roaming Regulation lifts 
roaming access obligation in case of unwanted 
permanent roaming. 

EN 

  EN 

 
 
 
(-)  
As it does not enable sustainable RLAH in the 
EU  and  may  create  distortions  on  domestic 
markets  as  domestic  prices  may  rise,    it  is  in 
contradiction  with  the  Roaming  Regulation's 
requirement  to  enable  RLAH  from  15  June 
2017 in the EU. 

(+) 
the  Roaming  Regulation's 
Consistent  with 
requirement  of  wholesale  cost  recovery  and 
keeping 
unwanted 
permanent roaming 

safeguards 

against 

incumbents/operators  with 

(+) 
large 
Certain 
footprint,  Southern  operators, 
in  general 
operators  which  are  net  receivers  of  roaming 
traffic,  strongly  support  keeping  the  wholesale 
roaming caps unchanged; it allows them a good 
margin,  in  particular  with  smaller  operators  and 
MVNOs. 

(-) 
Small operators, Northern operators, MVNOs, in 
general  operators  which  are  net  senders  of 
roaming traffic strongly oppose maintaining caps 
at  their  current  level  as  this  would  create 
considerable  sustainability  problems  to  them, 
margin squeeze and possible market exit. 

Option  2  - 
Set 
EU-
wide  
wholesale 
roaming 
caps  at  the 
current 
level 

(-)  
RLAH is not sustainable from 15 June 2017 for 
at least 20% of the operators in our sample 
and/or in at least six countries. 

Distortions  on  the  home  markets  appear  in 
certain countries: 

-  Operators  proving  non-sustainability  of 
RLAH  are  authorised  by  NRAs  to  continue 
applying  a  retail  roaming  surcharge  if  they 
apply; 

-  Alternatively,  operators 
facing  RLAH 
sustainability  challenges,  instead  of  asking  for 
an  RLAH  exemption,  may  choose  to  raise 
domestic  prices  to  the  extent  allowed  by 
domestic competition in a given Member State. 

(+)   
Recovery  of  costs  of  providing  wholesale 
is  ensured,  preserving 
roaming 
incentives to invest in visited networks and 
avoiding distortion of domestic competition 
in the visited markets. 

services 

In  particular  the  existing  wholesale  roaming 
caps  act  as  an  effective  safeguard  against 
additional 
unwanted  permanent 
safeguard  in  the  Roaming  Regulation  lifts 
roaming  access  obligation  in  case  of  unwanted 
permanent roaming. 

roaming; 

EN 

  EN 

 
 
Option  3  – 
Set 
lower 
EU-wide 
wholesale 
roaming 
caps 

(+)  
RLAH  is  sustainable  from  15  June  2017  for 
operators in the EU. 

The number of operators that may be entitled to 
be  authorised  by  NRAs  to  continue  applying  a 
retail  roaming  surcharge  is  very  small,  if  any:  
RLAH-exemption 
exceptional, 
avoiding distortions on the home markets.  

remains 

(+)   
Recovery  of  costs  of  providing  wholesale 
is  ensured,  preserving 
roaming 
incentives to invest in visited networks and 
avoiding distortion of domestic competition 
in the visited markets. 

services 

In  particular,  the  new  wholesale  roaming  caps 
may  act  as  an  effective  safeguard  against 
unwanted  permanent 
additional 
safeguard  in  the  Roaming  Regulation  lifts 
roaming  access  obligation  in  case  of  unwanted 
permanent roaming. 

roaming; 

(+) 
Small operators, Northern operators, MVNOs, in 
general  operators  which  are  net  senders  of 
roaming 
traffic  strongly  support  a  sharp 
reduction  of  EU  caps  in  order  to  reduce  their 
wholesale roaming payments as their subscribers 
will  consume  high  RLAH  roaming  volumes 
without  retail  surcharges  for  that  service  in  the 
EU, with a view to making RLAH a sustainable 
service for these operators. 

(-) 
Certain  incumbents  and  operators  with  large 
footprint,  Southern  operators, 
in  general 
operators  which  are  net  receivers  of  roaming 
traffic,  strongly  oppose  any 
reduction  of 
wholesale  roaming  caps  as,  according  to  them, 
the  wholesale  roaming  market  is  already  well-
functioning  and  delivering  prices  that  already 
enable RLAH offers to exist on the market. 

(+) 
Consistent  with 
the  Roaming  Regulation's 
requirement  to  enable  RLAH  from  15  June 
2017 in the EU. 

the  Roaming  Regulation's 
Consistent  with 
requirement  of  wholesale  cost  recovery  and 
keeping 
unwanted 
permanent roaming 

safeguards 

against 

Consistent  with 
the  harmonised  EU  wide 
regulation  of  wholesale  roaming  market  in 
place so far. 

EN 

  EN 

 
 
Option  4  – 
Set 
country-
specific 
wholesale 
roaming 
caps 

(+)  
RLAH  is  sustainable  from  15  June  2017  for 
operators in the EU. 

The  number  of  operators  entitled 
to  be 
authorised  by  NRAs  to  continue  applying  a 
retail  roaming  surcharge  is  very  small,  if  any: 
RLAH-exemption 
exceptional, 
avoiding distortions on the home markets.  

remains 

(-) 
No operator is supporting this regulatory option. 

All  operators  favour  EU-wide  caps  to  avoid 
fragmenting 
the  wholesale  roaming  market, 
complexifying  and  distorting  bilateral  roaming 
relationships. 

Operators  however  do  not  agree  on  the  level  of 
the EU-caps (see Options 2 and 3). 

(+) 
Consistent  with 
the  Roaming  Regulation's 
requirement  to  enable  RLAH  from  15  June 
2017 in the EU. 

risk  with 

(+/-) 
At 
the  Roaming  Regulation's 
requirement  of  wholesale  cost  recovery  and 
keeping 
unwanted 
permanent roaming 

safeguards 

against 

 (+/-)   
Recovery  of  costs  of  providing  wholesale 
roaming  services  may  not  be  ensured  in  all 
cases. 

The  cost-orientation  of  the  caps  increases  the 
risk  of  arbitrage  and  abusive  use  of  the 
to  a  domestic 
wholesale 
network,  and  hence  the  risk  of  distortion  of 
domestic competition in the visited markets. 

roaming  access 

(+)  
This option further optimizes the economics of 
sustainability  of 
RLAH, 
different  tariffs  plans,  and  providing  additional 
avenues to deal with seasonality issues.  

facilitating 

the 

This  option  is  strictly  voluntary  and  available 
next to the regulated solution. It is expected  to 
be  taken  up  by  both  parties  to  a  bilateral 
roaming agreement only if judged beneficial by 
both of them. 

(-) 
Not consistent with the single market regulatory 
the 
approach  of 
harmonised  EU  wide  regulation  of  wholesale 
roaming market in place so far. 

the  Commission 

and 

consistent  with  Better  Regulation 
transparency  and 

Not 
principles  of  simplicity, 
minimising administrative burden. 

(+)  
Operators  with  different  characteristics/sizes 
have  stressed  the  benefits  of  capacity-based 
contracts.  

(+)  
Fully  consistent  with  both 
and 
Regulation 
principles.   

the  Roaming 
the  Better  Regulation 

Some operators are clearly opposed to changing 
the  regulation  based  on  the  current  wholesale 
roaming  unit  rate  structure  into  a  regulation 
based  on  capacity  only.  However,  they  would 
not in principle be opposed to enabling capacity-
based contracts on a voluntary and flexible basis. 

  EN 

freely 

Additional 
Measure: 
Enable 
operators 
to 
agree 
wholesale 
roaming 
terms 
(capacity-
based 
contracts) 

EN 

 
 
 
Finally, as noted in section 6.1, the most serious potential technological substitute to roaming 
services is eSIM card which allows switching operator without changing physically the SIM 
card.  This  would  potentially  facilitate  the  choice  of  a  local  operator  to  provide  services, 
instead of the user's home operator, when arriving in another country. By doing so, the user 
would choose paying local tariffs for mobile services. 

Under the RLAH regime, choosing a local operator, even if facilitated by a new technology, 
loses  some  of  its  advantages  compared  to  the  current  regulatory  regime  where  roaming 
services are substantially more expensive than domestic services. When traveling in the EU 
under  the  RLAH  regime,  many  customers  may  rather  not  see  the  need  of  making  such  a 
switch while they would continue paying from their domestic bundle if they do nothing at all 
when arriving in another Member State. Customers do not know the local operators, nor their 
respective prices, while they know their own domestic price and the volume available on their 
domestic subscription. This is precisely the political choice made by the co-legislator in 2015 
by imposing RLAH: to allow customers ignoring they are changing Member State from the 
point of view of mobile services. 

Those  customers  who,  under  the  future  RLAH  regime,  still  want  to  try  and  find  good  local 
offers  while  traveling  in  other  Member  States  will  be  able  to  make  the  switch  of  operators 
with  the  new  eSIM  technology  if  the  latter  is  implemented  in  smartphones  in  the  future,  or 
with any other local break-out technique made available by operators. 

7.3. Commission's assessment of additional measures suggested by 

stakeholders 

Termination rates (TRs) regulation 

TRs  are  part  of  the  wholesale  payments  to  be  made  by  the  visiting  operators  to  the  visited 
operators  to  cover  the  termination  of  outgoing  calls  made  by  its  roaming  customers  when 
hosted  on  the  visited  network.  The  visiting  operator  also  pays  a  mobile  termination  rate 
(MTR) to the visited network for terminating the call made to the roaming customer while the 
latter is hosted on the visited network. Therefore, termination rates, in particular MTRs, are an 
important element of the wholesale costs incurred by the visiting operator for providing retail 
roaming services. 

The  public  consultation  showed  a  widespread  and  strong  call  from  operators  for  further 
harmonizing MTRs as a pre-requisite for sustainable voice RLAH. Operators at the same time 
recognize  that  this  should  be  a  parallel  process,  as  the  Roaming  Regulation  is  not  the 
appropriate legislative instrument to regulate TRs. This is also the view expressed by BEREC 
in its Report on wholesale roaming market69. 

The Commission will take the appropriate measures to harmonise the regulatory approach to 
MTRs  in  the  EU70.  Therefore  the  option  of  setting  the  wholesale  roaming  voice  cap  on  the 

69  "The  Roaming  Regulation  is  not  the  appropriate  legislative  instrument  to  amend  the  current  system  which 
would require an amendment of the current regulatory approach on termination rates" in BEREC Report on the 
wholesale roaming market, BoR(16)33, February 2016 (section 3.5.3, p 33) 
70 On 15 March 2016 the Commission launched a public consultation on the termination rates recommendation, 
available 
https://ec.europa.eu/digital-single-market/en/news/public-consultation-termination-rates-
recommendation.  In  the  meantime,  should  any  dispute  between  the  visited  and  terminating  operators  arise  on 
significant imbalances due to divergences in the termination rates applied, option 3 would empower BEREC to 
provide guidance for the resolution of the dispute.   

at 

59 

 
 
                                                 
basis of the origination service only (i.e. excluding the MTR from the cap and allowing the 
MTR to be charged by the visited operator to the visiting operator on top of the cap) is not 
considered. This has never been the case in past roaming regulations and would be technically 
complex  to  implement  as  it  would  involve  IT  development  in  order  to  charge  a  wholesale 
roaming price on a call by call basis according to the MTR of the destination country. In view 
of the forthcoming harmonisation of regulatory approaches to MTRs in the EU, the option of 
setting a cap on MTRs for roaming incoming calls only is not considered either. It would need 
IT development to split traffic between international and roaming. None of these two options 
would fully solve the issue to RLAH raised by non-harmonised MTRs in the EU. 

Fair use policy at wholesale level 

In the public consultation there is a consensus among stakeholders about the possible market 
distortions  that  permanent  roaming  could  cause  on  the  domestic  market  of  the  visited 
network.  However,  it  is  also  widely  admitted  that  the  risks  of  permanent  roaming  are  to  a 
large extent mitigated as long as the recovery of wholesale roaming costs is ensured, which is 
the  case  with  the  option  chosen  consisting  of  a  cap  above  costs.  In  addition,  the  Roaming 
Regulation already includes one of the additional safeguards suggested by some stakeholders 
to  enable  the  visited  operator  to  prevent  permanent  roaming  on  its  network,  namely  the 
possibility  to  refuse  roaming  access  to  an  operator  if  this  access  is  used  for  other  purposes 
than  providing  roaming  services  for  periodic  travels.  Finally,  in  the  public  consultation 
stakeholders are not calling for measures to prevent hypothetically anticipated circumvention 
mechanisms, many of them being of the view that they would not be proportionate.  

We therefore do not propose to include additional regulatory measures to prevent permanent 
roaming in addition to setting the caps above costs and the existing measure of the Roaming 
Regulation. Permanent roaming will be a point of attention of the monitoring and evaluation 
of the regulation (see section 8). If it becomes an issue, appropriate regulatory measures will 
be considered. 

MVNOs-specific measures 

Since 2007, domestic wholesale access to mobile networks is not among the relevant markets 
subject to ex ante regulation recommended by the Commission.  The introduction of roaming-
specific  regulatory  measures  (e.g.  obliging  the  MNOs  to  pass  discounts  they  obtain  for 
wholesale roaming services on to their hosted MVNOs, or obliging MNOs to include RLAH 
in  their  wholesale  domestic  offer  to  MVNOs)  would  involve  the  risk  of  distorting  the 
domestic markets and the current relationships and commercial practices between MNOs and 
MVNOs, including the risk of increasing domestic wholesale price conditions. As also noted 
by BEREC, such measures would be difficult to verify by regulators71. We assess the level of 
the  caps  as  generally  enabling  sustainable  RLAH  for  market  players  paying  wholesale 
roaming services at the level of the caps, with possible sustainability problems for MVNOs72 
being confined to a limited number of Member States. 

71 BEREC Report on the wholesale roaming market, BoR(16)33, February 2016 (section 3.5.3, p 36) 
72 As reported in Section 6.2. , under current wholesale roaming caps (5 €c/min, 2 €c/SMS, 5 €c/MB) MVNOs 
may  encounter  margin  squeeze  problems  with  RLAH  and some  exceptional  sustainability  problems  cannot  be 
excluded with the lower caps proposed in this impact assessment (4 €c/min, 1 €c/SMS, 0.85 €c/MB).  

60 

 
 
                                                 
8.  Monitoring and evaluation 

This  section  presents  the  monitoring  and  evaluation  mechanism  and  indicators  proposed  to 
assess the progress achieved with this initiative vis à vis its intended general objective, i.e. to 
ensure  that  national  wholesale  roaming  markets  function  in  such  a  way  that,  from  15  June 
2017, the general policy objective of RLAH can be met in a sustainable manner throughout 
the EU, while ensuring at the same time the more specific objectives, i.e. recovery of all costs 
of  providing  regulated  wholesale  roaming  services  and  the  need  to  prevent  distortion  in  the 
visited country due to permanent roaming. The monitoring and evaluation strategy analysed 
in  the  following  paragraphs,  therefore,  concerns  the regulation  of  wholesale  markets,  which 
are the object of this initiative. 

At the same time, it should also be considered that monitoring and evaluation obligations and 
tools are provided for in the existing Roaming Regulation, including both retail and wholesale 
regulation  underpinning  the  RLAH  obligation.  In  line  with  the  better  regulation  principle, 
therefore, any evaluation strategy for the wholesale market, therefore, need to take also into 
account the existing rules provided for in this context73. 

With  regard  to  timing  of  the  evaluation,  the  Commission  is  currently  required  to  submit  a 
report  every  two  years,  starting  from  the  date  of  the  report  on  wholesale  market 
accompanying this Impact Assessment, i.e. as from June 2018. Taking into account that the 
entry into force of the RLAH obligation will be triggered as from June 2017 and depending 
on  the  approval  of  the  wholesale  review  by  European  Parliament  and  Council  by  that  date, 
this first reporting exercise would provide only a very partial overview of the entry into force 
of  the  new  retail  and  wholesale  regulatory  regimes,  since  it  would  not  be  able  to  take  into 
account data covering an entire year of application of the new regime. Moreover, in the event 
of delays in the adoption of the legislative proposal, since the reporting obligation is linked to 
the proposal of the Commission but not on the entry into force of RLAH, the report would be 
able  to  take  into  account  a  correspondingly  more  limited  period  of  application  of  any  retail 
and  wholesale  regulation.  In  order  to  address  this  inconsistency,  therefore,  it  is  proposed  to 
link the reporting obligation to the entry into force of RLAH. in order to have more complete 
data  series  can  be  gathered  on  the  functioning  of  the  wholesale  markets  and  its  impact  on 
domestic and visited markets as well as on the sustainability of RLAH. 

With regard to the content of the monitoring and evaluation exercise, Article 19(3) refers to 
some  aspects  which  are  directly  relevant  for  the  assessment  of  effects  of  the  wholesale 
regulation considered in the context of this initiative, in particular sub point b) ("the degree of 
competition  in  both  the  retail  and  wholesale  roaming  markets,  in  particular  the  competitive 
situation of small, independent or newly started operators, including the competition effects of 
commercial  agreements  and  the  degree  of  interconnection  between  operators").  Within  this 

73 In particular, Article 19(3) of Regulation 531/2012, as amended by Regulation 2015/2120, provides that the 
Commission  shall  adopt  a  report  to  the  Council  and  the  European  Parliament  every  two  years  after  the  report 
accompanying  the  wholesale  review,  assessing  the availability and quality of  services, in  particular  in  light of 
technological  developments,  the  degree  of  competition  in  both  retail  and  wholesale  roaming  markets,  in 
particular  the  competitive  situation  of  small  independent  and  newly  started  operators,  the  impact  of 
implementation  of  structural  measures  provided  for  in  Article  3  and  4.  In  order  to  assess  the  competitive 
developments,  BEREC is entrusted with  the  task  to  collect  the  relevant  data  and  to  report  on  the  evolution  of 
pricing  and  consumption  patterns  and  of  wholesale  rates.  In  this  regard,  BEREC  annually  publishes  a 
Benchmark Roaming Report with the data gathered by NRA under the coordination of BEREC. 

61 

 
 
                                                 
existing  reporting  obligation,  therefore,  the  following  indicators  are  proposed  in  order  to 
assess the specific measures included in this initiative: 

1.  Number of sustainability requests filed by operators and accepted by NRAs pursuant 
to Article 6c of Roaming Regulation and impact on domestic and roaming  markets: 
this  will  provide  an  indication  of  the  operators  that  effectively  demonstrated  that 
provision  of  RLAH  was  exceptionally  deemed  unsustainable,  including  whether 
specific  types  of  operators  (small,  independent,  new  entrants)  are  particularly 
affected.  

2.  Total  inbound  and  outbound  roaming  traffic  volumes  per  quarter:  this  indicator 
allows  identifying  the  impact  of  RLAH  on  the  demand  of  the  different  wholesale 
services by visiting countries as well as impacts on costs for visited operators. 

3.  Average wholesale prices and volumes for unbalanced and balanced traffic traded on 
the  basis  of  volume-based  contracts:  this  indicator  gives  an  indication  of  variable 
wholesale costs sustained by visiting operators in providing RLAH and the variable 
revenues for the visited countries, as well as to monitor the competitive dynamics of 
the wholesale markets in comparison with the cap. [In particular, if the average shows 
prices  substantially  below  the  caps  and  a  limited  standard  deviation,  it  could  be 
considered  that  market  dynamics  within  the  cap  are  able  to  provide  for  regulated 
roaming  wholesale  services  which  may  help  to  ensure  the  provision  of  sustainable 
RLAH for different kinds of operators while still ensuring the recovery of costs by the 
visited countries. 

4.  Number  and  main  features  of  capacity-based  wholesale  contracts:  the  number  and 
main categories of capacity-based contracts (such as the alternative metric variables 
agreed between parties, size of the market in terms of contractual value) will allow to 
identify the capacity of fully unregulated and negotiated contractual solutions to cope 
with  some  of  the  uncertainties  of  RLAH,  as  well  as  to  define  the  fixed  wholesale 
roaming costs for those visiting operators that adopted these tools. 

5.  Effectiveness  of  appropriate  contractual  wholesale  remedies  to  prevent  operators 
effectively using wholesale roaming access conditions for the purpose of large-scale 
permanent  roaming  in  a  domestic  market:  domestic  market  distortions  due  to 
operator's  abusive  use  of  wholesale  conditions  for  other  purposes  than  the  periodic 
travel of their customers need to be monitored, in particular by gathering information 
on  wholesale  contractual  measures  adopted  in  this  regard  and  their  effective 
application. In case these abuses cannot be prevented by visited operators, appropriate 
regulatory measures will need to be taken. 

Moreover,  it  is  necessary  to  monitor  how  emerging  technological  trends  such  as  eSims  and 
VoLTE (see accompanying Review SWD) might impact these and other aspects of roaming 
markets.  

With specific regards to the tools for monitoring and evaluation, Article 19(4) of the Roaming 
Regulation  entrusts  BEREC  to  collect  data  from  NRAs  on  the  developments  of  wholesale 
charges, to be notified by the Commission twice a year. Moreover, BEREC regularly reports 
on the evolution of wholesale charges and pricing. In this regard, information sub 1 to 3 above 
are already regularly collected and published in the context of the regular BEREC Roaming 
Benchmark Reports and this will remain the main source for the data collection. In addition, 

62 

 
 
with  regard  to  indicators  sub  4  and  sub  5  above,  this  could  be  added  in  the  data  gathering 
exercise for publication in aggregate terms, in order to ensure confidentiality of commercial 
negotiations  and  taking  into  account  that  NRAs  are  empowered  to  require  operators  to 
provide any information relevant for the implementation of the Roaming Regulation pursuant 
to Article 16(4).  

63 

 
 
 
 
ANNEX 1: Procedural information concerning the process to prepare the impact 
assessment report and the related initiative 

The process described in the accompanying Review SWD was designed and set up to serve 
the  purposes  of  both  the  wholesale  roaming  review  and  the  preparation  of  the  impact 
assessment. This process is described below.  

1.  Information and data gathering on roaming markets 

The first phase of the process consisted in gathering quantitative and qualitative information 
about  wholesale  and  retail  markets  in  the  EU.  On  28  July  2015,  the  Commission  sent  a 
request  for  input  to  the  Body  of  European  Regulators  in  Electronic  Communications 
(BEREC)  to  specify  the  data  and  information  necessary  to  conduct  the  review  of  national 
wholesale roaming markets in accordance with the Regulation requirements74.   

in  collaboration  with 

the  Commission,  sent 

two 
Following  that  request,  BEREC, 
questionnaires  to,  respectively,  mobile  (virtual)  network  operators  M(V)NOs  and  national 
regulatory  authorities  (NRAs)  on  11  September  2015.  These  questionnaires  aimed  at 
collecting  detailed  data,  facts  and  figures  about  the  degree  of  competition  in  national 
wholesale  markets,  the  level  of  wholesale  roaming  costs  incurred  by  a  visited  operator, 
including relevant joint and common costs, any observable risks of distortions of competition 
and investment incentives in home and visited market, and the competition developments in 
the retail  roaming  markets75. The questionnaire to operators also  gathered their views about 
appropriate options for regulating wholesale roaming markets to enable the abolition of retail 
roaming  surcharges.  The questionnaire to  NRAs also  aimed at gathering information on the 
cost  models  and  input  data  used  by  NRAs  to  estimate  mobile  network  costs.  Replies  from 
operators  and  NRAs  to  these  questionnaires  were  received  in  the  course  of  September  and 
October  2015.  Some  operators  provided  updated  replies  in  November-December  2015  and 
early January 2016.  

Through  this  information  gathering  exercise,  the  Commission  received  quantitative  and 
qualitative  information  from  135  operators  and  from  the  28  EU  NRAs  plus  the  Norwegian 
NRA. This information gathering exercise is referred to as the 'autumn 2015 data collection' 
in this Impact Assessment and in the accompanying Review SWD. 

In the course of December 2015 and January 2016, the Commission complemented this data 
collection exercise with additional requests on the characteristics and inputs of NRAs' mobile 
termination rates cost models, for the purpose of developing the cost model for the provision 
of wholesale roaming services. 

In  addition  to  these  formal  information  requests,  the  Commission  has  maintained  informal 
meetings  with  NRAs  and  stakeholders  since  the  start  of  the  review  in  July  2015.  The 
Commission's approach has been to consult openly with NRAs and BEREC on the analysis 
contained in this report and the conclusions of its legislative proposal. 

74  The  Commission's  request  for  input  to  BEREC  of  28  July  2015  also  covers  the  inputs  needed  for  the 
implementing acts mandated to the Commission by the Regulation on the weighted average of maximum MTRs 
across the EU, fair use policy, and sustainability mechanism. 
75 In addition, the questionnaire to operators included questions on fair use policies applied so far in unlimited 
domestic offers and roam-like-at-home-type of offers already marketed (usually for a fixed add-on price). 

64 

 
 
 
                                                 
2.  Analysis  of  the  data  on  roaming  markets  and  development  of  a  sustainability 

assessment model 

The analysis of the qualitative and quantitative data received on wholesale and retail roaming 
markets  in  the  autumn  2015  data  collection  was  conducted  by  DG  CNECT  and  the 
Competence  Centre  on  Microeconomic  Evaluation  (CC-ME)  of  Joint  Research  Centre 
(JRC)76 from November 2015 to February 2016.  

For the purposes of the impact assessment, DG CNECT and JRC carried out an assessment of 
the  sustainability  of  RLAH  under  the  different  options  considered  at  wholesale  level  for 
individual operators that submitted the necessary data in the autumn 2015 data collection. The 
methodology  used  for  this  sustainability  assessment  is  detailed  in  Annex  4.  It  relies  on  the 
same domestic and roaming traffic forecast and on the same principle of services allocation as 
in the cost model developed in the external study (below). 

3.  External study to estimate the costs of providing wholesale roaming services 

In order to assess the level of costs incurred by visited network operators to provide wholesale 
roaming  services,  the  Commission  commissioned  an  external  study  to  TERA  Consultants77. 
The study was conducted from October 2015 to March 2016. Building upon cost models used 
by NRAs for mobile networks, the contractor has developed a cost model to estimate the costs 
of providing wholesale roaming services by a generic European mobile network operator. The 
development of the cost model was made in close collaboration with the BEREC International 
Roaming Expert Working Group and NRAs. Anonymised data on wholesale roaming specific 
costs collected from operators in the data collection process described in section 1above were 
used in the study to develop the cost model. 

In  addition,  in  the  context  of  the  study,  the  Commission  invited  NRAs,  operators  and  trade 
associations, as well as other interested stakeholders, to a workshop organised together with 
TERA Consultants on 28 January 2016 in Brussels to present the interim results and to obtain 
feedback on the cost model for wholesale roaming services being developed in the study. The 
feedback  from  stakeholders  has  been  incorporated  into  the  final  version  of  the  cost  model 
developed by TERA Consultants. 

Finally,  a  reality  check  exercise  was  conducted  in  March  2016.  During  two  weeks,  NRAs 
were invited to run and test the cost model on their input data. 20 NRAs provided comments 
and further information, in particular input data, where they deemed relevant to improve the 
model. The model and the country input data used were then revised by the contractor to take 
into account the feedback received from NRAs. 

4.  Public consultation (see Annex 2) 

On 26 November 2015 the Commission launched a wide-ranging 12-week public consultation 
to  gather  views  on  the  functioning  of,  and  level  of  competition  on,  the  wholesale  roaming 
markets  in  the  EU,  on  the  need  to  regulate  them  in  view  of  the  abolition  of  retail  roaming 
surcharges  by  15  June  2017,  on  possible  options  for  doing  so,  and  on  the  possible  risks 

76 The Joint Research Centre (JRC) is the European Commission's in-house science service employing scientists 
to carry out research in order to provide independent, evidence-based scientific advice and support to EU policy. 
For further information, please visit the JRC's website at: https://ec.europa.eu/jrc/.  
77 Study SMART 2015/006 "Assessment of the cost of providing wholesale roaming services in the EU", TERA 
Consultants 

65 

 
 
                                                 
associated with permanent roaming and the ways to address them78. The public consultation 
was  closed  on  18  February  2016.  The  Commission  received  92  responses  to  the 
consultation79. 

5.  Commission's inter-service group 

In order to support the preparation and drafting of the accompanying Review SWD and of this 
impact assessment report, a Commission inter-service group was established. The following 
Commission  services  were  invited  to  participate:  Secretariat  General,  Legal  Service, 
Competition, Internal Market, Industry, Entrepreneurship and SMEs, Justice and Consumers. 
The group met on a regular basis throughout the wholesale roaming review process. 

78  In  addition,  the  public  consultation  included  two  sets  of  questions  on  fair  use  policy  and  the  sustainability 
mechanism foreseen in the Roaming Regulation, in view of implementing powers conferred to the Commission 
by the Roaming Regulation on these two topics. 
79 In addition, three respondents sent their replies by e-mail and two respondents sent separate position papers . 
BEREC published the BEREC Report on the wholesale roaming market (BoR(16)33) on 29 February 2016. 

66 

 
 
 
 
                                                 
ANNEX 2: Stakeholder consultation 

1.  Consultation  on  the  cost  model  to  estimate  the  costs  of  providing  wholesale 

roaming services in the EEA 

The Commission commissioned an external study to develop a cost model in order to estimate 
the  costs  of  providing  wholesale  roaming  services  in  the  EEA  (see  section  5  of  the 
accompanying Review SWD). The development of the cost model by the contractor and the 
Commission was done in close cooperation with National regulatory Authorities (NRAs) via 
the International Roaming Expert Working Group (IR EWG) of  BEREC. Several rounds of 
oral  and written  exchanges  were  organised on the methodology  to  be used  to  build the cost 
model.  NRAs  were  requested  to  provide  detailed  information  on  the  cost  models  they  have 
developed  over  the  years  to  estimate  the  costs  of  termination  in  accordance  with  the  2009 
Commission  Recommendation80,  so  that  Member  States'  specificities  can  be  accommodated 
as much as possible in the cost model developed for the purpose of assessing the wholesale 
roaming costs. 

In addition, NRAs, operators and trade associations, as well as other interested stakeholders, 
were invited by the Commission to a workshop organised together with the contractor on 28 
January 2016 in Brussels. The objective of the workshop was to present the interim results of 
the  study  and  to  obtain  feedback  on  the  cost  model.  NRAs  and  stakeholders  provided 
comments on the methodology and the preliminary results during the workshop and in written 
after  the  workshop.  The  comments  were  taken  into  account  by  the  contractor  in  further 
developing the cost model.  

Finally,  a  reality  check  exercise  was  conducted  in  March  2016.  During  two  weeks,  NRAs 
were invited to run and test the cost model on their input data. 20 NRAs provided comments 
and further information, in particular input data, where they deemed relevant to improve the 
model. The model and the country input data used were then revised by the contractor to take 
into account the feedback received from NRAs. 

80 Commission Recommendation of 7 May 2009 on the Regulatory Treatment of Fixed and Mobile Termination 
rates in the EU (2009/396/EC), OJ L 124/67 of 20.5.2009 

67 

 
 
 
 
                                                 
2.  Public consultation on the initiative 

A. Methodology of the public consultation and of this report 

The  Commission  ran  a  consultation  on  the  review  of  national  wholesale  roaming  markets 
from 29 November 2015 to 18 February 2016 for 12 weeks. The purpose was to gather views 
on  the  functioning  of  roaming  markets  in  the  EU,  and  the  current  regulation  of  national 
wholesale roaming markets in the EU against the Roaming Regulation's obligation to abolish 
retail roaming surcharges by 15 June 201781. Contributions will be taken into account in the 
Commission's review of the EU wholesale roaming market and in the Regulation at wholesale 
level that it will propose to enable the abolition of retail roaming surcharges in the EU as of 
15 June 2017 ('Roam-Like-At-Home regime': RLAH). The replies of contributors who agreed 
to publication are available on DG CONNECT's website. This report analyses the replies to 
the public consultation. 

All  online  contributions  were  analysed  for  the  purposes  of  this  report82.  The  consultation 
targeted  mobile  operators,  national regulators,  public  authorities,  civil society  organisations, 
businesses and citizens.  

The analysis was conducted by type of respondents and centres on the two main themes of the 
consultation:  

 
 

the functioning of the wholesale roaming market 
the most appropriate regulatory measures to enable  RLAH in the EU from 15 June 
2017 

B. Respondents' profile 

A total of 92 replies came through the online questionnaire; 3 by e-mail; 2 respondents sent 
position papers. The response rate is comparable to the Commission's last public consultation 
on roaming in 2011 (90 replies). Respondents came from 25 EU Member States and Norway.  

81 Regulation EU 531/2012 of 13 June 2012 on roaming on public mobile communications networks within the 
Union, as amended by Regulation 2015/2120 of 25 November 2015 
82  The  three  contributions  received  by  e-mail  and  the  two  positions  papers  received  fed  into  the  qualitative 
analysis  but  are  not  included  in  the  statistics.  In  addition,  the  Body  of  European  Regulators  for  Electronic 
Communications (BEREC) published its analysis of the wholesale roaming market on 29 February 2016. While 
this  analysis  has  served  as  an  input  to  the  wholesale  roaming  review  conducted  by  the  Commission,  it  is  not 
reflected  as  such  in  the  present  Synopsis  report,  which  focuses  on  the  analysis  of  the  replies  to  the  online 
questionnaire. 

68 

 
 
 
                                                 
Among the 32 mobile network operators (MNOs) that replied to the public consultation, the 9 
group  operators83  which  operate  mobile  networks  in  at  least  3  EU  countries  responded  as  a 
group  i.e.  1  reply  per  group.  Only  one  affiliate  of  one  of  these  nine  group  operators 
contributed separately in addition to the group. Therefore, 22 independent MNOs (operating 
in one or two Member States) replied to the public consultation. Since the 9 group operators 
represent  in  total  64  operators  in  the  28  Member  States  plus  Norway,  the  responses  to  the 
public  consultation  cover  a  total  of  86  MNOs,  plus  8  MVNOs,  thus  covering  most  of  the 
telecom  sector  in  the  EU  plus  Norway  (the  total  number  of  MNOs  and  MVNOs  is 
approximately 140; those having not responded are among the smaller operators). 

83  Deutsche  Telecom,  Hutchinson  Europe,  Orange,  Tele2,  Telefonica,  Telekom  Austria,  Telenor,  TeliaSonera, 
Vodafone. 

69 

 
 
 
 
 
                                                 
Citizens  and  consumers'  associations  only  partially  responded  to  the  questions.  6  national 
regulators and 3 government authorities replied to the questions.84 

C. Functioning of the wholesale roaming market 

Operators  have  differing  perceptions  of  the  effective  functioning  of  wholesale  roaming 
markets:  
-  Certain  historic  incumbents  and  operators  with  a  large  footprint,  and  generally 
operators  with  large  inbound  roaming  traffic,  argue  that  some  competitive  dynamics 
take  place  as  shown  by  wholesale  market  prices  being  often  below  the  current 
regulatory caps. 
-  Other  operators,  in  particular  smaller  ones,  Mobile  Virtual  Network  Operators 
(MVNOs)  and  operators  with  large  outbound  roaming  traffic,  argue  that  prices 
available  to  them  on  the  wholesale  market  are  at  or  close  to  the  current  caps  and 
substantially above costs. 

Views  on  the  effect  of  Roam-Like-At-Home  (RLAH)  on  competition  in  the  wholesale 
roaming  markets  are  also  split  between  these  two  groups  of  operators,  the  former 
arguing that RLAH will increase competition, the latter - the opposite. 

C.1. Mobile operators 

Current functioning of the wholesale roaming market 

The responses show that mobile operators are split on the functioning of national wholesale 
roaming markets currently:  

-  50% of MNOs replied that they function well for voice, SMS and data 

-  another 6% of MNOs state that they function well for voice and SMS only 

-  75% of MNOs are able to negotiate prices well below the cap for voice 

-  62.5% for SMS and 97% for data 

-  MVNOs claim that they never get prices well below the caps 

Only 10% of MNOs and MVNOs combined do not steer traffic over one or more networks in 
the visited country. MVNOs in particular say they have no incentive to steer traffic since they 
get a unique price from visited networks.  

61% of the operators that steer traffic steer all traffic; 39% steer only a fraction. Most of those 
which steer only a fraction specify that they steer a very large part of their traffic (typically 
95%),  claiming  that  there  is  always  residual  traffic  that  cannot  be  steered  (for  coverage, 
capacity reasons).  

There is a Sender/Receiver divide among MNOs i.e. incumbent/operators with large footprint 
vs smaller  operators, operators with large inbound vs large outbound  roaming  traffic, in the 
appreciation of the functioning of national wholesale roaming markets. Operators sending out 
more roaming traffic and/or with smaller roaming volumes to offer do not find the wholesale 
roaming  market  to  be  functioning  properly  (smaller  operators,  MVNOs,  large  outbound 

84  The  Body  of  European  Regulators  for  Electronic  Communications  (BEREC)  published  its  analysis  of  the 
wholesale  roaming  market  on  29  February  2016.  While  this  analysis  has  served  as  an  input  to  the  wholesale 
roaming review conducted by the Commission, it is not reflected as such in the present Synopsis report which 
focuses on the analysis of the replies to the online questionnaire. 

70 

 
 
 
                                                 
operators).  Operators  receiving  more  roaming  traffic  and/or  with  large  roaming  volumes  to 
offer  (incumbents/operators  with  large  footprint,  large  inbound  operators)  find  it  properly 
functioning. All MVNOs find the market not properly functioning. 

Operators that consider the national wholesale roaming markets to be functioning well argue 
that: 

  Regulated wholesale caps serve as a reference from which operators commercially 

negotiate the prices 

  Actual negotiated prices are below regulated caps and have decreased continuously in 

between two successive cap changes 

  The visiting operator can choose between several operators in the visited country and 

steer traffic to its chosen partner(s) only 

  Continuous and expected growth of retail roaming volumes increases the competition 
among visited operators in a country in order to obtain those volumes (and the related 
revenues) on their own networks 

  Because they only have roaming-out wholesale volumes to buy and cannot offer 

roaming-in wholesale traffic in return, full MVNOs are in a good negotiation position, as 
visited operators compete with each other to offer their best prices to get this net traffic 
on their network and the corresponding additional revenue 

  There are already true RLAH offers on the market showing that the wholesale roaming 

markets already enable RLAH 

In  contrast,  operators  that  consider  the  national  wholesale  roaming  markets  as  not  well-
functioning argue that: 

  Prices obtained by some market players (MVNOs, smaller operators not part of a group) 

are at or close to cap level; 

  Prices are much higher than the costs 
  Prices are much higher than domestic wholesale MVNO access prices, which are 

unregulated; this shows that MNOs do not compete for MVNO roaming traffic, while 
they do compete for MVNO domestic traffic 
  Prices are much higher than domestic retail prices 
  Even if there are several operators to choose from in each national market, the visiting 

operator is dependent on certain operators (for coverage, capacity), which in practice 
limits the bargaining power of the visiting operator and hence competition on the visited 
market 

  There are structural differences in negotiation positions of different market players:  
o  Operators in travel surplus countries attract inbound roamers anyway and do not 

need to decrease prices. They seek to maximise their inbound roaming revenues. In 
these countries all network operators have a common interest to keep wholesale rates 
high  

o  Discount rates from the cap depend on roaming volumes so that smaller operators 
and MVNOs which send less traffic than bigger MNOs, benefit from no or very 
limited discount rates 

o  For coverage and quality of service reasons, the visiting operator may have to 
negotiate roaming agreements with several operators in visited countries. That 
situation reduces the visiting operator's roaming volume commitments to each visited 
network, and as a consequence the ability to negotiate discount rates. For the same 
reasons of coverage and quality of service, there is always a residual part of the 

71 

 
 
 
roaming traffic that the visiting operator cannot steer to the visited network(s) with 
which it has a wholesale roaming discounted rates 

o  Large groups with significant footprints in several countries can take advantage of 
the imbalance in European roaming: they have stronger negotiation power against 
smaller groups or individual operators 

  MVNOs are unilateral buyers as they cannot host any inbound roaming, hence they do 

 

not have any traffic to trade; 
As shown by the much higher international non-EU wholesale roaming prices, the market 
needs caps to deliver lower prices, which implies that it does not function well 
structurally. 

Although  voice  and  SMS  prices  are  closer  to  the  cap  than  data  prices,  voice  and  SMS 
wholesale  roaming  markets  are  judged  well-functioning  by  slightly  more  operators  than  the 
data wholesale roaming market. These operators hold the view that voice and SMS prices are 
approaching a (cost) floor. They consider that although data prices are usually well below the 
cap (a sign of competition dynamics), there is still plenty of room for a further decrease while 
remaining above costs. That is cited as a sign that competition is insufficient on that market. 

For  most  operators,  the  functioning  of  the  market  does  not  depend  on  the  EU  country.  To 
most  operators  what  matters  are  the  relative  positions  and  bargaining  power  of  the  two 
operators in roaming negotiations, rather than the visited country itself. Yet, many operators 
argue  that  the  relative  bargaining  power  of  two  operators  heavily  depends  on  geographical 
features  that  structurally  make  some  countries  large  inbound  countries  and  others  -  large 
outbound countries. 

Anticipated impact of the retail RLAH obligation on the functioning of the wholesale roaming 
market 

70% of mobile operators (including MVNOs) anticipate an effect of retail RLAH obligation 
on the functioning of the wholesale roaming market. They have different and opposite views 
as to what this effect will be. 

Operators  note  that  RLAH  will  objectively  change  two  aspects  of  the  bilateral  roaming 
negotiations between two mobile operators: 1) it will increase wholesale roaming traffic due 
to  increased  retail  roaming  demand;  2)  it  will  limit  the  freedom  in  the  wholesale  roaming 
negotiations  i.e.  namely  a  certain  capacity  of  the  home  (visiting)  operator  to  influence  the 
volume of traffic it will send to the visited operator via its retail roaming offers. Since RLAH 
will  (save  in  exceptional  cases)  be  an  obligation  of  the  home  operator,  the  latter  will  have 
fewer  means  to  restrict  or  boost  the  retail  roaming  demand  created  by  its  customers  on  the 
visited operator's network. The impact on wholesale roaming prices of these new features is 
ambivalent, and may vary according to the relative situations of the negotiating operators.  

  RLAH will increase competition on the wholesale roaming markets 

On the one hand, the RLAH-triggered increase in roaming traffic at wholesale level is likely 
to reduce wholesale roaming unit costs due to economies of scale. In a given national market, 
wholesale  roaming  providers  potentially  compete  to  obtain  the  increased  inbound  roaming 
traffic  generated  by  RLAH  from  a  visiting  operator.  That  competition  may  drive  wholesale 
roaming prices down as unit costs in general decrease.  

  RLAH will decrease competition on the wholesale roaming markets 

72 

 
 
 
 
 
 
 
On the other hand, even if there are several operators to choose from in each national market, 
the  visiting  operator  depends  on  certain  operators  in  the  visited  country  e.g.  for  coverage, 
capacity.  Also,  there  are  relatively  high  switching  costs  for  wholesale  roaming  services, 
which may limit competition on the visited market in practice. If the visiting operator is small 
and under RLAH only brings small volumes relative to those brought by larger operators, it 
might find even less competition in the provision of wholesale roaming services.  

Some operators express concerns that the visited operator may attempt to recover part of the 
lost  revenues  on  their  retail  roaming  side  (as  home  operators)  through  wholesale  roaming 
prices.  Therefore  the  willingness  of  visited  operators  to  give  discounts  may  decline.  This 
implies  that  RLAH  could  exert  some  upward  pressure  on  the  wholesale  roaming  prices 
currently observed in the market.  

In  addition,  the  degree  of  retail-level  freedom  the  home  operator  loses  implies  that  for  the 
visited operator, the RLAH inbound roaming traffic the home operator sends will take place 
whatever the wholesale roaming price the visited operator imposes. Under RLAH, the home 
operator  may keep  a margin  to influence the roaming  traffic volumes  it sends to the visited 
operator, but it will lose the bargaining power linked to the current possibility not to provide 
RLAH at all. 

  RLAH will have no effect on competition on the wholesale roaming markets 

Some MVNOs considered the hypothesis that RLAH would not affect competition dynamics 
in  wholesale  roaming  markets  and  that  current  wholesale  roaming  prices  obtained  by  the 
different  market  players  could  be  maintained  under  RLAH.  They  argue  that  RLAH  would 
mechanically  increase  the  impact  of  the  wholesale  roaming  prices  discrimination  between 
market players i.e. large groups vs smaller operators and MVNOs, as the negative impact of 
paying  higher  wholesale  roaming  prices  will  not  be  mitigated  by  retail  roaming 
surcharges/margins, and RLAH will increase roaming volumes.  

Increased roaming volumes under RLAH would contribute to reduce unit costs of wholesale 
roaming  services.  Assuming  wholesale  roaming  prices  remain  unchanged,  the  wholesale 
roaming margins of the wholesale roaming provider would increase. 

Only 28% of MNOs and MVNOs combined (34% of MNOs and 0% MNVOs) hold the view 
that under current regulation, the functioning of the wholesale roaming markets would deliver 
RLAH; 53% are of the opposite view. 18% of operators do not know; one operator thinks it 
depends on the Member State.  

30% of MNOs and MVNOs combined (38% of MNOs and 0% of MVNOs) think that without 
any  wholesale  roaming  regulation  the  functioning  of  the  wholesale  roaming  markets  would 
deliver RLAH; 48% think the opposite. 

C.2 Other respondents 

NRAs  and  governments  express  views  similar  to  those  of  the  operators  of  their  countries. 
Large  inbound  roaming  countries  see  national  wholesale  roaming  markets  as  well-
functioning, while large outbound roaming countries are of the opposite view. 

Consumers  and  their  associations  are  cautious  in  expressing  views  on  wholesale  roaming 
markets since they do not face these markets directly. Up to 72% of consumers and 4 out of 7 

73 

 
 
 
 
 
 
 
consumers' associations do not express views about some of the wholesale review questions. 
When they do, their perspective is similar to that of smaller operators and MVNOs, as they 
tend to see national wholesale roaming markets as not well-functioning. 

D. Most appropriate regulatory measure at wholesale level to enable RLAH in 2017 

A  large  majority  of  respondents  are  of  the  view  that  EU-wide  wholesale  roaming  caps 
valid  in  all  Member  States  are  the  most  appropriate  regulatory  approach  to  enable 
RLAH in 2017. 

However,  because  of  different  perceptions  of  how  the  wholesale  roaming  market 
functions,  operators  are divided as to  what would be the most appropriate level  of the 
EU  caps  to  enable  sustainable  RLAH.  Certain  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.  Others,  in 
particular  smaller  ones,  MVNOs  and  operators  with  large  outbound  roaming  traffic, 
argue that wholesale roaming price caps must be significantly lowered in order to enable 
sustainable RLAH. 

There  is  a  widespread  call  from  operators  for  further  harmonisation  of  Mobile 
Termination Rates, in addition to the Roaming Regulation, in order to enable RLAH for 
voice. 

D.1 Mobile operators 

-  73% of all responding MNOs and MVNOs combined prefer EU-wide caps i.e. valid for all 

Member States 

-  58% of all responding MNOs and MVNOs combined advocate reducing wholesale 

roaming caps (all MVNOs advocate so) 

-  25% of all MNOs and MVNOs combined advocate keeping the caps unchanged or lifting 

any wholesale regulation (no MVNO holds that view) 

Operators in favour of reducing the caps are mainly net senders of roaming traffic concerned 
about  the  retail  sustainability  of  RLAH  i.e.  smaller  operators,  MVNOs  and  operators  with 
large outbound roaming traffic. They argue the following: 

  with  current  caps,  the  effective  wholesale  roaming  prices  are  too  high  for  RLAH  to  be 
sustainable;  with  current  caps  and  resulting  prices,  some  operators  would  have  to  raise 
some  of  their  domestic  tariffs  or  cut  roaming  from  some  domestic  tariff  plans;  some 
smaller  MNOs  and  MVNOs  would  be  squeezed  (retail  prices  below  wholesale  roaming 
prices) and could exit the retail roaming market;  

  operators  in  the  least  expensive  domestic  markets  and  operators  with  unlimited  domestic 
offers, including for data, underline they face challenges in introducing RLAH if the caps 
are not lowered 

  as  the  current  wholesale  roaming  caps  and  effective  prices  are  well  above  costs,  there  is 
ample  room  to  decrease  the  caps  without  affecting  cost  recovery  at  wholesale  level  and 
creating a risk of arbitrage 

  lower  wholesale  roaming  caps  are  a  lower  starting  point  for  negotiations,  and  allow 
operators with less bargaining power to obtain lower prices than currently possible; lower 
caps lead to lower prices and enable RLAH for more operators 

74 

 
 
 
 
 
  some  existing  RLAH  offers  are  only  possible  because  it  is  a  commercial  choice  of  the 
visiting operator to offer it to customers. The related roaming volume commitments of the 
visiting  operator  to  the  visited  operator  are  an  argument  used  in  wholesale  roaming 
negotiations to drive the wholesale roaming prices down. Under an RLAH obligation, that 
bargaining power of the visiting operator will disappear, and the visited operator may again 
increase prices.  If the caps  are not reduced, some of the existing RLAH offers  would  no 
longer be sustainable. 

On  the  contrary,  operators  defending  the  view  that  current  caps  should  be  kept  at  the  same 
level  are  mainly  net  receivers  of  roaming  traffic  intent  on  preserving  wholesale  roaming 
revenues to invest in their networks i.e. incumbents, operators with a large footprint, operators 
with large inbound roaming traffic. They argue the following: 

 

the  wholesale  roaming  market  functions  well:  prices  are  market-driven  and  below 
regulated  caps,  there  are  incentives  to  compete  for  inbound  roaming  traffic  to  earn 
incremental revenue; there is no need for intervention 

  EU-wide RLAH offers already exist on the  market under  current caps; current caps are 

not an obstacle to RLAH 

 

  RLAH sustainability issues encountered in certain Member States have structural causes 
in  those  Member  States  (very  low  domestic  prices/production  costs,  very  large 
(unlimited)  domestic  data  consumption,  frequent  travel  abroad),  which  cannot  be 
eliminated even if wholesale roaming prices were to reach the cost level 
the caps act as a safeguard against unwanted permanent roaming (by raising the price in 
case of unwanted permanent roaming); if caps are lower, there is a risk of arbitrage and 
permanent roaming, whereby cheap roaming access to a country's networks could be used 
by foreign  networks or OTTs to  enter the domestic market of that  country  and unfairly 
compete with the operators of that country, without incurring the costs of investing in and 
operating a network in that country 
if caps are lower, there is no more room to compete or negotiate prices 
if caps are lower, there is a risk of de facto regulating wholesale national mobile access 
markets 
if  caps  are  lower,  the  visited  operator  has  no  incentive  to  invest  and  offer  quality  of 
service to roamers 

 
 

 

Operators on both sides believe the caps should be EU-wide and valid in all Member States: 

  EU unit price cap model is established and well-functioning 
  Simple and transparent 
  All operators should be subject to the same price caps 

In addition, operators note that cost-oriented country-specific caps raise issues: 

  country-specific regulation is contrary to the objective of a single telecom market; it 

would be a step back and would further fragment the European market 

  country-specific caps would penalise efficiency and innovation: those who manage to 
keep costs low would: 1) face large out-payments to those who do not, and 2) would 
be forced to apply low charges to them in return 

  country-specific caps would distort/complicate wholesale relationships/competition 
  cost-orientation bears a risk of regulating/distorting the visited country's market 

75 

 
 
 
 
 
  cost-orientation  is  disproportionate  and  economically  unjustified  because  there  is  no 
monopoly,  dominance  or  significant  market  power;  on  the  contrary,  competition  is 
happening on the market 

  cost-orientation  weakens  incentives  for  investment,  and  entails  the  risk  of  no  cost 

recovery in practice by real operators 

  country-specific  caps  would  lead  to  differentiation  of  retail  roaming  prices  as  they 
would  depend  on  the  country  visited  by  the  roaming  customer  -  a  complex  and 
unfriendly outcome for the consumer 

  cost-oriented  country-specific  caps  would  have  no  added  value  as  they  would  not 
solve the structural RLAH-sustainability issues of operators in a few Member States 
  cost-oriented  country-specific  caps  would  be  complex  and  time-consuming  to 
implement;  it  would  require  a  cumbersome  annual  update  to  remain  relevant  in  the 
light of market evolution in every Member State 
the lengthy and inefficient process of MTR modelling/regulation by NRAs should be 
avoided for roaming; 

 

  cost  models  that  NRAs  apply  will  lead  to  variations  resulting  from  policy  choices 
rather  than  from  objective  factors.  Results  would  not  be  comparable.  Data  quality, 
consistency  and  updates  would  differ  across  NRAs.  There  is  risk  that  arbitrary 
adjustments  will  be  made  to  the  model  inputs  to  make  the  models  look  robust;  such 
arbitrary adjustments always risk producing unreliable results.  

13% of operators see some benefits in country-specific caps: 

 

it allows to take into account the specific country situation as costs of networks vary 
across  countries,  and  depend  on  factors  outside  operators'  control  and  on  historic 
choices 

  one should be able to prove that costs variation across Member States are small to be 

 

able to define EU caps without distortions 
it  would  allow  to  take  into  account  distortion  of  competition  in  both  visited  and 
visiting countries 

Operators suggest the following regulatory measures in addition to a cap measure: 

  There is widespread call from operators for further harmonisation of Mobile Termination 

Rates, in addition to the Roaming Regulation, as a pre-requisite for voice RLAH. 

  One  operator  calls  for  flexibility  in  pricing  models,  other  than  per-unit  basis.  The 
wholesale regulation should be a safety net for commercially negotiated tariff structures, 
allowing  sufficient  flexibility  to  experiment  with  pricing  models  other  than  the  per-unit 
base. Roam-like-at-home should allow flexibility to combine fixed and variable wholesale 
tariff arrangements to cope with differences in mobile retail markets.  
In that regard, another operator suggests incentivizing a capacity-based, price-unregulated 
approach.  

 

  One  operator  suggests  different  safeguards  to  avoid  that  negative  retail  effects  are 
compensated by wholesale prices e.g. prohibit net purchase cost increase compared to the 
latest voluntarily negotiated tariff levels. 

  A few operators suggest adding regulatory measures applicable to suppliers other than the 
visited operator, who provide other inputs necessary for the provision of roaming services, 
like international carriers, clearing houses, signalling and GRX providers. 

  According  to  an  MVNO,  the  regulation  should  clarify  that  any  MVNO  reselling  the 
roaming  services  of  its  host  MNO  should  have  access  to  such  service  at  a  wholesale 

76 

 
 
 
regulated  price,  and  any  MVNO  negotiating  an  access  directly  with  a  European  visited 
MNO should have a right to access to such network at regulated wholesale price. 

Stakeholders'  views  expressed  in  response  to  the  public  consultation  on  the  different 
regulatory options are consistent with BEREC's analysis of operators' views in response to the 
autumn 2015 data collection85.   

Seasonality impact on wholesale roaming costs 

Mobile operators are divided on the  question whether or not seasonality affects the costs of 
providing wholesale roaming services. 50% of MNOs and MVNOs combined are of the view 
that  seasonality  has  an  impact;  40%  argue  it  has  no  impact;  10%  do  not  pronounce 
themselves. 

The division line is again between Sender/Receiver: certain incumbents and operators with a 
large  footprint,  and  generally  operators  receiving  more  roaming  traffic  than  they  send 
particularly  in  Southern,  touristic  countries  defend  the  view  that  seasonality  has  an 
(important)  impact  on  costs.  In  contrast,  smaller  operators  and  operators  sending  more 
roaming  traffic  than  they  receive  particularly  in  Northern  countries  contest  any  seasonality 
impact on costs. All MVNOs contest the existence of a seasonality impact on costs. 

Risk of permanent roaming 

Virtually all MNOs and MVNOs identify risks of permanent roaming for the visited market as 
a whole if wholesale roaming  caps are very  low: the lower the caps, the higher the risks of 
permanent roaming. The risk is that in Member States with high domestic prices, SIM cards 
from  low-cost  countries  (e.g.  Baltic  States)  could  be  used  to  substitute  the  more  expensive 
domestic  offers.  Virtual  operators  and  other  (non-EU)  operators  or  Over-The-Top  (OTTs) 
players  could  start  providing  (pan-EU)  permanent  services  in  Member  States  via  the  cheap 
roaming  access,  without  incurring  network  costs:  they  would  compete  with  national  offers 
without having to bear the costs of the national operators building and operating the networks. 

53%  see  the  need  for  additional  measures  to  prevent  unwanted  permanent  roaming.  Some 
operators believe those risks are already mitigated or will not be too high since future caps are 
supposed to cover the costs, and do not need additional regulatory measures (38%). MVNOs 
see  the  potential  risk  but  consider  it  is  already  mitigated.  Operators  wish  to  have  the 
possibility to refuse roaming access to an operator seeking roaming access for reasons other 
than  to  serve  its  customers'  needs  for  roaming  services  while  periodically  travelling  in  the 
EU86. Some operators suggest in addition allowing the visited operator to apply a wholesale 
surcharge (higher than the cap) for roamers who roam more often than periodically (i.e. a fair 
use policy at wholesale level). Most operators do not call for additional regulatory measures 
to prevent the risks of possible circumvention mechanisms to permanently roam at this stage. 
Regulatory  action  would  be  needed  only  if  such  (or  other)  circumventions  are  effectively 
observed in the market.  

Many  MNOs  and  MVNOs  consider  permanent  roaming  to  be  necessary  for  M2M  and  that 
any  anti-permanent  roaming  regulatory  measure  should  not  apply  to  M2M,  or  that  M2M 
should be excluded from the roaming regulation altogether since the traffic patterns and the 
use of M2M are completely different from personal communications. 

85 BEREC Report on the wholesale roaming market, BoR(16)33, February 2016 (section 3.5) 
86 This is allowed by Article 3(6) of the Roaming Regulation. 

77 

 
 
 
 
                                                 
D.2 Other respondents 

In the small sample of NRAs and governments who responded (9 out of 9 Member States in 
total),  countries  with  large  inflows  of  roamers  defend  the  status  quo  (no  change  in  the 
wholesale roaming price caps), while those sending large outflows of roamers call for lower 
caps. 

Individual  consumers  and  their  associations  are  cautious  in  expressing  views  on  wholesale 
roaming  markets  since  they  do  not  face  these  markets  directly.  56%  of  the  individual 
consumers do not indicate the regulatory measure they see as most appropriate. Among those 
expressing a view on this, 63% take the view that caps must be lowered, and 69% favour an 
EU-wide cap over country-specific caps; 6 out of 7 consumers' associations consider that caps 
must be lowered (1 does not respond), and 3 out 7 consumers' association consider that caps 
should remain EU-wide (4 do not reply). 

78 

 
 
 
 
 
 
ANNEX 3: Who is affected by the initiative and how  

Who is affected 

How 

Member States 

Like  under  the  current  Roaming  Regulation,  National  regulatory 
Authorities (NRAs) will have to monitor and supervise compliance with 
the  new  wholesale  roaming  caps  set  out  in  this  initiative.  In  addition 
they could be involved in solving specific disputes concerning the level 
of  termination  rates  applied  by  terminating  network  operators  to 
roaming traffic.  

Mobile Network 
Operators (MNOs) 

As visited networks: 

-  MNOs,  when  providing  wholesale  roaming  services  (as  visited 
network operators), will have to apply to the roaming access seeker (the 
home operator) wholesale roaming charges that are at or below the cap 
level set out in this initiative, unless both parties agree to a de-regulated 
alternative  to  wholesale  roaming  caps  for  a  predefined  period  of  time. 
The  cap  level  proposed  ensures  that  the  visited  MNO  will  be  able  to 
recover  the  costs  of  providing  wholesale  roaming  services,  including 
joint and common costs. 

-  As  a  result  of  the  lower  wholesale  roaming  caps  proposed,  the  unit 
margin  earned  by  the  visited  MNO  on  the  provision  of  wholesale 
roaming  services  will  be  reduced.  This  will  contribute  to  reduce 
wholesale  roaming  revenues  for  the  visited  MNO.  However,  in  the 
RLAH context (roaming at domestic price with no more surcharge) the 
volume  of  roaming  traffic  generated  by  roaming  customers  on  the 
visited network is expected  to grow substantially, in particular for data 
services  (+28%  for  voice,  +5%  for  SMS,  +919%  for  data  compared  to 
2014,  see  Annex  4).  This  is  a  more  than  ten-fold  increase  in  data 
roaming  volume.  This  will  contribute  to  increase  wholesale  roaming 
revenues for the visited MNO. The expected increase in roaming traffic 
is  larger  than  the  reduction  in  the  cap  level  for  voice  (-20%)  and  data 
(six-fold  decrease).87  Overall,  increased  RLAH-driven  volumes  are 
expected  to  more  than  counter-balance  the  compressing  effect  on 
revenues of a reduction in caps. 

- MNOs receiving more roaming traffic than they receive (net receivers 
of  roaming  traffic,  operating  predominantly  as  visited  operators)  will 
therefore  be  able  to  recover  the  costs  of  providing  wholesale  roaming 
services, including joint and common costs, and benefit from the higher 
volumes of roaming traffic generated under RLAH. 

As home (visiting) networks: 

87 In addition, the resulting reduction in effective wholesale roaming prices compared to current effective prices 
will  be  much  smaller  than  the  reduction  in  the  cap  level  (the  average  price  for  wholesale  data  roaming  is  1.7 
€c/MB, and 1.3 €c/MB for unbalanced traffic). With a ten-fold increase in wholesale roaming data volumes, the 
reduction in effective wholesale roaming unit margin resulting from the new cap on data can be expected to be 
more  than  counter-balanced  by  the  increased  volumes,  generating  an  overall  increase  in  wholesale  roaming 
profits.  

79 

 
 
 
 
 
 
 
 
 
                                                 
- When providing retail roaming services (as home network operators), 
MNOs  will  benefit  from  the  lower  wholesale  roaming  caps  proposed 
under the preferred option which will reduce the unit cost of providing 
retail roaming services. This reduction in unit cost will allow the home 
operator to provide for the larger volumes of roaming traffic generated 
by their roaming customers in the RLAH context (roaming at domestic 
price with no  more surcharge), without changing  its domestic charging 
model.  The  20%  reduction  in  the  cap  for  voice  will  to  a  large  extent 
offset  the  28%  increase  in  roaming  voice  volume  that  can  be  expected 
under RLAH in 2017 compared to 2014 (see Annex 4). For data, the six-
fold  reduction  in  the  cap  will  substantially  compensate  for  the  ten-fold 
increase in roaming data consumption under RLAH in 2017 compared to 
2014. It is also worth noting that this forecasted RLAH consumption in 
2017 is made under the hypothesis that it all remains within the scope of 
any  fair  use  policy  that  may  be  applied  in  accordance  with  the 
forthcoming Commission implementing act. 

-  Smaller  MNOs  with  more  limited  traffic  volumes  and  hence  more 
limited bargaining power in wholesale roaming negotiations, as well as 
MNOs  sending  more  roaming  traffic  than  they  receive  (net  senders  of 
roaming  traffic),  will  particularly  benefit  from  the  lower  level  of  the 
caps proposed.  

- The ability of retail roaming providers (i.e. MNOs as home operators) 
to  provide  RLAH  with  the  proposed  level  of  wholesale  roaming  caps, 
without changing their domestic charging model, has been tested on the 
basis of country-level data and operators' data ( section 6.3):  

a)  The  simulations  of  the  average  annual  wholesale  cost  of 
providing  retail  roaming  services  for  the  amount  of  forecasted 
roaming consumption under RLAH in 2017 provided  in Annex 
4  (the  unbalanced  part  of  it)  show  that,  with  the  level  of  caps 
proposed,  this  cost  does  not  exceed  3%  of  annual  ARRPU  in 
each country and Norway88 (see Table 6). This corresponds to 
RLAH retail revenues for countries whose residents spend 10-11 
days abroad per year on average. 

b)  The  sustainability  test  run  with  operators'  data  shows  that 
91% of the operators in our sample have a positive sustainability 
and  only  5%  would  have  a  negative  retail  roaming  margin 
greater than 5% of their domestic margin (see Table 7). 

-  Therefore  the  simulations  show  that,  with  the  proposed  caps,  all  or 
virtually all operators should be able to provide RLAH without changing 
their domestic charging model. 

- As the cap level proposed will also for most countries allow space for 
price  competition,  MNOs  with  significant  traffic  volumes  or  multi-
country  footprints  will  be  able  to  negotiate  (or  internalise)  lower  rates 
than the caps and to derive economic advantages from scale. 

88 Except in Austria and Ireland where the simulation result in a % of ARRPU slightly higher than 3% 

80 

 
 
  
 
 
 
 
 
 
 
                                                 
Mobile Virtual 
Network Operators 

Consumers and Users 

Small and Medium 
Sized Enterprises 
(SMEs) 

MVNOs do not provide wholesale roaming services and as such are not 
imposed  any  new  obligations  by  this  initiative.  However,  they  will 
benefit  from  the  lower  wholesale  roaming  caps  proposed  under  the 
preferred  option  when  providing  retail  roaming  services  to  their 
subscribers  (see  considerations  above  concerning  home  network 
operators). 
Consumers  and  (business)  users  of  mobile  services  are  not  directly 
affected  by  the  initiative  as  it  concerns  only  the  wholesale  side  of  the 
roaming market. They are however indirectly affected since a failure to 
adopt any legislative act at the wholesale level would have the result that 
the RLAH obligation is not applicable from 15 June 2017. In that case, 
consumers  and  (business)  users  would  continue  to  pay  roaming 
surcharges in addition to the domestic price. By enabling RLAH in 2017 
in the EU, consumers and (business) users will benefit from the abolition 
of roaming surcharges and pay the same amount as at home for mobile 
services while traveling in the EU 
Online  businesses  and  start-ups:  like  consumers,  online  business  and 
start-ups are not directly affected by the initiative as it concerns only the 
wholesale  side  of  the  roaming  market.  However  they  are  indirectly 
affected  since  the  proposal  enables  the  abolition  of  retail  roaming 
surcharges  from  June  2017  which  would  otherwise  not  happen.    This 
will have a significant positive impact on these enterprises: the 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: like consumers and online business and start-ups, SMEs are not 
directly affected by the initiative as it concerns only the wholesale side 
of  the  roaming  market.  However  they  are  indirectly  affected  since  the 
proposal  enables  the  abolition  of  retail  roaming  surcharges  from  June 
2017  which  would  otherwise  not  happen.  This  will  have  a  significant 
positive  impact  for  SMEs  since  the  bills  for  mobile  services  will  be 
substantially  reduced  for  their  employees  periodically  travelling  in  the 
EU for business purposes89. 

89 Subject to fair use of roaming services. Detailed rules on the application of fair use policy will be set out in an 
implementing act to be adopted by the Commission by 15 December 2016. 

81 

 
 
 
 
 
 
 
                                                 
ANNEX 4: Analytical models used in preparing the impact assessment. 

1.  Forecasted roaming consumption under RLAH in 2017 

The  forecasted  amount  of  RLAH  consumption  in  2017  is  based  on  the  assumption  that,  if 
RLAH is applicable in 2017, roaming customers will consume mobile services abroad in the 
EEA like at home (RLAH assumption).  

1)  The  average  RLAH  roaming  consumption  of  a  user  in  2017  is  therefore  obtained  by 
multiplying,  for  each  country,  the  average  daily  domestic  consumption  for  voice,  SMS  and 
data  in  the  country  by  the  average  number  of  days  abroad  in  the  EEA  of  citizens  of  the 
country90.  

2)  The  average  daily  domestic  consumption  itself  is  a  forecast  for  2017  based  on  2014 
domestic  consumption  data91  and  growth  forecast  between  2014  and  2017  used  in  the  cost 
model study92.  

3)  The  total  RLAH  roaming  consumption  by  subscribers  of  a  country  is  obtained  by 
multiplying the average RLAH roaming consumption of a user by the number of subscribers 
which roam abroad in the EEA from that country93. 

Table 11: Forecasted roaming consumption under RLAH in 2017 

90 We consider, for each country, that the average travelling time abroad in the EEA and daily consumption are 
within  fair  use  of  roaming  services.  The  precise  parameters  for  fair  use  policy  have  still  to  be  laid  down  in  a 
binding implementing act which will itself be subject to impact assessment. 
91 BEREC Report on the wholesale roaming market, BoR(16)33, February 2016, based on operators' replies to 
the autumn 2015 data collection 
92 % change between 2014 and 2017: +6% for voice and +3% for SMS for all countries; for data, the % change is 
country-specific (+300% on average). 
93 Digital Agenda for Europe Scoreboard. 

82 

 
 
                                                 
This forecasted amount of RLAH consumption in 2017 in the EEA represents the following 
increase compared to actual 2014 roaming consumption94: 

Table 12: % change in roaming consumption between 2014 and 2017 under RLAH , total EEA 

94 International roaming BEREC Benchmark Data Report April – September 2015, BoR(16)28, February 2016 

83 

Days abroad EEA (2)Domestic daily min 2017 (1)**Domestic daily sms 2017 (1)**Domestic daily MB 2017 (1)**Number of subscribers (2014) (3)% of roamers (2nd semester 2014, BEREC) (4)Number of RLAH minutesNumber of RLAH SMSNumber of RLAH MBAustria11.24.91.0133.813,049,31840.3%286,508,27357,668,4787,878,398,302Belgium10.93.65.622.713,709,76659.9%326,374,350501,379,0332,031,555,703Bulgaria0.94.30.325.511,551,60512.9%5,826,270362,32834,236,480Croatia5.45.31.951.04,658,35511.3%15,128,1705,476,476145,069,246Cyprus12.19.14.8161.21,127,29832.5%40,162,35421,381,888713,910,296Czech Republic5.14.61.825.213,812,80339.8%127,743,73951,167,411706,003,563Denmark12.64.63.0136.58,208,27021.7%103,053,31366,757,8063,066,970,286Estonia6.44.90.7173.22,109,21831.5%20,682,7442,871,055736,383,749Finland114.71.0360.99,367,00026.4%128,668,11926,660,0779,824,582,058France46.38.251.276,137,25168.5%1,311,722,9351,711,201,57110,666,961,539Germany8.93.10.645.9110,294,12939.8%1,222,929,000237,663,56017,927,831,485Greece0.86.31.018.013,101,99316.7%10,923,9801,769,13531,445,946Hungary2.53.80.330.311,297,04844.7%47,866,7004,267,154382,337,026Iceland5.70.00.00.0Ireland10.96.34.0117.95,759,56341.6%164,992,603103,945,6823,074,753,290Italy2.25.01.457.696,263,88939.8%425,079,752116,793,2204,858,437,543Latvia54.41.691.94,396,86831.5%30,315,35511,221,857636,177,584LiechtensteinLithuania5.15.44.654.34,474,54431.5%38,960,29632,761,424389,998,780Luxembourg27.13.52.886.8779,40067.8%50,787,60240,157,5301,243,032,664Malta3.52.444.6563,33532.5%Netherlands153.70.636.020,554,68445.9%520,778,79881,157,3225,089,875,798Norway12.66.02.794.652.3%Poland34.22.651.152,190,75542.3%280,948,262170,063,6403,385,391,797Portugal1.54.34.239.316,421,25113.0%13,889,55213,280,508125,779,587Romania1.48.02.315.122,275,0319.6%23,751,9796,752,59245,182,969Slovakia5.94.91.125.46,460,76239.8%73,872,04516,919,884386,304,999Slovenia6.95.23.039.12,322,31058.6%49,244,00027,886,269366,994,865Spain1.84.40.142.255,697,95513.3%58,720,8621,797,132561,124,033Sweden12.15.52.6266.219,204,20032.1%409,207,574193,779,87019,834,985,988UK7.64.83.765.785,112,01766.9%2,076,086,8581,608,016,41428,442,635,956EEA***5.74.72.50.0680,900,61839.8%7,864,225,4835,113,159,317122,586,361,531Data: (1) BEREC Report on the wholesale roaming market, BoR(16)33, February 2016, based on operators' replies to the autumn 2015 data collection           (2) BEREC Analysis of the impacts of "Roam Like At Home", BoR(14)209, December 2014          (3) European Commission, Digital Agenda Scoreboard, February 2016          (4) BEREC analysis (unpublished), based on operators' replies to the autumn 2015 data collection** forecasted change in consumption between 2014 and 2017 (from TERA Consultants' study): +6% for voice and +3% for SMS for all countries; for data, the % change is country-specific (+300% on average)*** weighted averageValues in italics have been imputed20142017 RLAH% increasevoice (million minutes)6,1297,86428%SMS (million SMS)4,8535,1135%Data (million MB)12,027122,586919% 
 
 
 
 
 
                                                 
2.  Sustainability test based on operators' data 

Introduction  

In  some  specific  and  exceptional  circumstances,  the  provision  of  RLAH  may  affect  the 
sustainability of an operator's domestic charging model, for example, if its domestic prices are 
below  the  prices  they  have  to  pay  to  the  visited  network  operators  hosting  their  roaming 
customers  when  travelling  abroad  in  the  EU  and  the  operator's  overall  revenues  are  low 
relative to its effective roaming costs.  

The  Regulation  foresees  that,  in  order  to  avoid  the  domestic  charging  model  of  roaming 
providers being rendered unsustainable by such cost recovery problems, generating a risk of 
an  appreciable  effect  on  the  evolution  of  domestic  prices  or  so-called  "waterbed  effect", 
roaming  providers,  upon  authorisation  by  the  national  regulatory  authority,  should,  in  such 
circumstances,  be  able  to  apply  a  surcharge  to  regulated  retail  roaming  services  only  to  the 
extent necessary to recover all relevant costs of providing such services. 

Pursuant to the Regulation, the methodology for assessing the sustainability of the abolition of 
retail roaming surcharges shall be based on an analysis of:  

i. 

ii. 

iii. 
iv. 

the overall actual and projected costs of providing regulated retail roaming services by 
reference to the effective wholesale roaming charges for unbalanced traffic and a 
reasonable share of the joint and common costs necessary to provide regulated 
roaming services; 
the overall actual and projected revenues from the provision of regulated retail 
roaming services;  
the consumption of such services and of domestic services; and  
the level of domestic competition, prices and revenues, and any observable risks that 
domestic prices would be appreciably affected by RLAH pricing. 

In  this  Annex  we  describe  the  analysis  we  have  undertaken  to  assess  the  sustainability  for 
mobile  operators  of  the  wholesale  price  caps  we  propose  under  Options  2,  3  and  4  of  our 
impact assessment. Our assessment follows the approach described in the Regulation and was 
conducted  by  the  Competence  Centre  on  Microeconomic  Evaluation  (CC-ME)  of  the  Joint 
Research Centre (JRC)95 under the guidance of DG CNECT's services.  

Data used to assess sustainability 

Our assessment of sustainability by operator uses the information we gathered from operators 
in  the  autumn  information  request.  We  received  responses  to  our  information  request  from 
127  operators,  however,  due  to  missing  data  in  the  replies  from  operators  (e.g.  missing 
volumes data) we could only use the replies from 64 operators out of the total sample of 127 
operators.96 

95 The Joint Research Centre (JRC) is the European Commission's in-house science service employing scientists 
to carry out research in order to provide independent, evidence-based scientific advice and support to EU policy. 
For  further  information,  please  visit  the  JRC's  website  at:  https://ec.europa.eu/jrc/.  The  CC-ME  is  a  newly 
established  centre  of  the  JRC  with  the  aim  of  providing  scientific  support  to  policy  DGs  in  the  field  of 
Counterfactual Impact Evaluation.  
96 It should be noted that for some of these 64 operators that we included in our sample we had to use imputation 
strategies to fill in certain gaps in the data provided. This allowed us to increase the sample of operators that we 

84 

 
 
                                                 
 
JRC performed an evaluation of the representativeness of the sample of 64 operators that were 
used for the sustainability analysis. The set of MS present in this analysis is the same as the 
one  for  the  overall  representativeness.  In  order  to  see  which  operators  dropped  from  the 
sample  in  terms  of  their  position  in  terms  of  size,  the  number  of  subscribers  was  used  as  a 
proxy for size. The fraction of operators present in the sample of 64 was on average equal to 
43%. When restricting attention to the largest 50% of operators, this fraction equalled 50%. 
This  means  that  the  sample  of  64  operators  used  for  the  sustainability  study  slightly  over-
represents large operators. Due to the small absolute number of operators, this difference does 
not appear to be large.  

In Table 13 we present the number of operators that we have been able to use in each of the 
29 MS that replied to our information request. We also describe the number of operators that 
are net receivers and senders of data roaming traffic in each country (i.e. operators with higher 
inbound than outbound data roaming traffic and vice-versa, respectively). 

Table 13: Sample of operators used in the assessment of sustainability by operator 

Country 

Total number of 
operators 

AT 
BE 
BG 
CY 
CZ 
DE 
DK 
EE 
GR 
ES 
FI 
FR 
HR 
HU 
IE 
IT 
LT 
LU 
LV 
MT 
NL 
PL 
PT 
RO 
SE 
SI 

3 
3 
3 
2 
1 
0 
3 
0 
2 
3 
2 
5 
2 
2 
3 
3 
0 
3 
1 
2 
3 
1 
3 
3 
3 
3 

Outbound traffic 
lower than inbound 
traffic (positive 
balance) 
1 
3 
3 
2 
0 
0 
1 
0 
2 
3 
1 
4 
2 
2 
2 
3 
0 
2 
1 
2 
0 
0 
3 
1 
2 
0 

Outbound traffic 
higher than 
inbound traffic 
(negative balance) 
2 
0 
0 
0 
1 
0 
2 
0 
0 
0 
1 
1 
0 
0 
1 
0 
0 
1 
0 
0 
3 
1 
0 
2 
1 
3 

include in our analysis. We describe in detail the imputation strategies that were used for these data gaps in this 
Annex. 

85 

 
 
                                                                                                                                                         
SK 
UK 
NO 
Total 
% 

3 
1 
1 
64 
100% 

0 
1 
0 
41 
64% 

3 
0 
1 
23 
36% 

As  can  be  seen  in  Table  13  above,  64%  of  the  operators  considered  in  our  analysis  are  net 
receivers  of  wholesale  data  roaming  traffic  (compared  to  only  36%  being  net  senders).97  In 
order to evaluate the sample of operators in our assessment we analysed the traffic pattern of 
other  operators  that  replied  to  our  autumn  information  request  (and  included  inbound  and 
outbound  roaming  traffic)  but  that  could  not  be  taken  into  account  in  our  sustainability 
assessment  due  to  other  missing  information.  Unfortunately,  there  were  only  6  additional 
operators that met these criteria. Thus, we could not conduct this test of representativeness on 
the sample of operators that we used for the sustainability assessment. In light of the above, 
we  consider  that  the  results  of  the  operator-level  sustainability  should  be  assessed  together 
with  the  results  of  the  sustainability  at  country  level  that  we  have  presented  in  the  impact 
assessment. 

Sustainability estimation by operator 

The  sustainability  estimation  is  based  on  a  comparison  of  the  "roaming  margin"  and 
"domestic margin" by operator. We define each of these as follows: 

For  the  purposes  of  estimating  sustainability  we  only  consider  those  operators  that  we 
estimate would have a negative roaming margin. The sustainability estimation is therefore the 
result of comparing both margins, as follows: 

In  other  words,  the  sustainability  estimation  reflects  the  magnitude  of  the  negative  retail 
roaming margin when compared against the domestic margin of each operator considered.  

Below we explain how we have derived each of the variables considered in our assessment of 
sustainability.  

(a) Revenues from the provision of retail roaming services 

The  revenues  from  the  provision  of  retail  roaming  services  are  derived  using  the  formula 
below: 

Revenues from the provision of retail roaming services =∑ (              )   (              )

Where: k = (1=voice, 2=sms, 3=data). 

97  In  the  case  of  voice,  the  sample  of  operators  we  use  for  the  sustainability  analysis  includes  75%  of  net 
receivers (against 25% of net senders) and in the case of SMS 87% of net receivers (13% net senders). 

86 

 
 
 
                                                                                                                     
                                                                                           
                
              
                
      
 
   
 
 
                                                 
In  other  words,  we  derive  the  revenues  from  the  provision  of  retail  roaming  services 
multiplying the forecast outbound roaming volumes for each service in 2017 by the assumed 
retail domestic price for each service:  

                = the operator's domestic retail price for service k in 2017; and 
                = the total outbound roaming volume as home operator for intra EEA outbound roaming 

traffic per service k in 2017  

In  order  to  derive  the  domestic  retail  price  for  each  service  in  2017  we  assume  that  retail 
prices in 2017 will remain at the same level of 2014. We first estimated domestic retail prices 
in  2014  using  the  information  provided  by  operators  in  their  response  to  the  autumn 
information request by dividing total revenues per service by total service volumes. However, 
this  resulted  in  relatively  high  retail  prices  for  most  operators.    For  this  reason,  we  did  not 
consider this approach appropriate and instead opted for using country domestic retail prices 
from  a  price  study  recently  conducted  for  DG  CNECT.98  We  underline  that,  by  taking  this 
approach, the results of the sustainability assessment are likely to be more conservative than if 
we used the retail prices derived using operators' own data (i.e. all other things being equal, 
using  the  high  retail  price  estimates  derived  from  operators'  data  is  likely  to  attenuate  the 
effect that wholesale roaming prices may have on retail roaming margins of operators with a 
negative roaming traffic imbalance under RLAH conditions). 

The study we used to derive retail prices includes the prices of 5 mobile baskets in 28 MS (i.e. 
all countries considered in our analysis with the exception of Norway). In the case of Norway 
we  used  the  prices  derived  using  the  data  provided  by  the  operators  in  that  country.  The  5 
mobile baskets considered are shown in Table 14 below. 

Table  14:  Allowances  included  in  the  baskets  included  in  the  price  study  conducted  for  DG 
Connect 

Basket 1 
Basket 2 
Basket 3 
Basket 4 
Basket 5 

Voice calls 
51 min 
191 min 
576 min 
1809 min 
191 min 

Handset use 
SMS 
100 
140 
225 
350 
140 

Data 
100 MB 
500 MB 
1 GB 
2 GB 
2 GB 

The  baskets  used  in  the  study  are  consistent  with  the  OECD  methodology  for  mobile 
telecommunications  price  baskets.99  In  order  to  derive  domestic  retail  prices  we  subtracted 
from the VAT-inclusive prices in the study the VAT in every MS considered in the analysis. 
The VAT rates considered are shown in Table 15 below. 

Table 15: Country VAT rates used to derive domestic retail prices excluding VAT 

Country 
AT 

VAT rate 
20% 

98 European Commission, Mobile Broadband prices, conducted by Van Dijk Management Consultants finalised 
in February 2016 (prices from February 2015), to be published 
99  Namely  OECD  (2012),  “Methodology  for  Constructing  Wireless  Broadband  Price  Baskets”,  OECD  Digital 
Economy Papers, No. 205, OECD Publishing. http://dx.doi.org/10.1787/5k92wd5kw0nw-en and OECD (2009), 
“Revision 
basket” 
(DSTI/ICCP/CISP(2009)14/FINAL). 

telecommunications 

methodology 

construction 

price 

the 

for 

of 

87 

 
 
 
 
                                                 
BE 
BG 
CY 
CZ 
DE 
DK 
EE 
EL 
ES 
FI 
FR 
HR 
HU 
IE 
IT 
LT 
LU 
LV 
MT 
NL 
PL 
PT 
RO 
SE 
SI 
SK 
UK 
NO 

21% 
20% 
19% 
21% 
19% 
25% 
20% 
23% 
21% 
24% 
20% 
25% 
27% 
23% 
22% 
21% 
17% 
21% 
18% 
21% 
23% 
23% 
24% 
25% 
22% 
20% 
20% 
25% 

Source: 
http://ec.europa.eu/taxation_customs/resources/documents/taxation/vat/how_vat_works/rates/vat_rates_en.pdf 
(page 16) 

In order to allocate the revenues from the baskets considered in the study to each service, we 
use the wholesale roaming prices effective in 28 MS and Norway that we gathered during the 
autumn information request to derive relative prices between services (voice, SMS and data). 
We allocate the basket revenues to each service ensuring that the relative retail prices derived 
are the same as for the observed wholesale roaming prices.100 

We present in Table 16 below the retail prices for each of the 28 MS and Norway. 

Table 16: Country retail prices derived using the DG CNECT study  

AT 

Voice (€c/min) 
3.84 

SMS (€c/SMS) 
1.18 

Data (€c/MB) 
1.31 

100  This  simulation uses  Scenario 2  to determine  unit  prices  through  retail revenue distribution  across bundled 
services for  all  operators, but  is without prejudice  to  the methodology  that will  be developed  for dealing with 
sustainability derogation applications by individual operators pursuant to Article 6c of the Roaming Regulation. 

88 

 
 
 
                                                 
BE 
BG 
CY 
CZ 
DE 
DK 
EE 
EL 
ES 
FI 
FR 
HR 
HU 
IE 
IT 
LT 
LU 
LV 
MT 
NL 
PL 
PT 
RO 
SE 
SI 
SK 
UK 
NO 

3.87 
8.74 
5.77 
7.43 
4.41 
3.09 
3.83 
6.21 
5.86 
3.91 
3.75 
5.24 
8.61 
4.69 
4.04 
1.77 
4.80 
4.33 
8.54 
5.60 
3.72 
7.16 
3.88 
3.80 
4.69 
5.40 
2.91 
3.80 

1.19 
2.70 
1.78 
2.29 
1.36 
0.95 
1.18 
1.92 
1.81 
1.21 
1.16 
1.62 
2.66 
1.45 
1.25 
0.55 
1.48 
1.34 
2.64 
1.73 
1.15 
2.21 
1.20 
1.17 
1.45 
1.67 
0.90 
1.17 

1.32 
2.99 
1.98 
2.54 
1.51 
1.06 
1.31 
2.13 
2.01 
1.34 
1.29 
1.79 
2.95 
1.61 
1.38 
0.61 
1.64 
1.48 
2.93 
1.92 
1.27 
2.45 
1.33 
1.30 
1.61 
1.85 
1.00 
1.30 

We used the above retail prices and multiplied by our forecast outbound roaming volumes in 
2017  to  derive  the  roaming  revenues  in  2017  (under  RLAH  conditions).  We  derived  the 
forecast  outbound  roaming  volumes  using  the  2014  outbound  roaming  volumes  from 
operators' data and projecting these to 2017. In order to forecast the volume growth between 
2014 and 2017 we used data on the number of days abroad by EU nationals and the volumes 
of  domestic  use  per  user.101  In  Table  17  we  present  the  percentage  change  in  outbound 
roaming volumes between 2014 and 2017 assumed in our sustainability assessment.  

101  Some  operators  in our  sample  did  not provide outbound roaming  volumes  in  2014. For  these, we used  the 
sum of the volumes provided for the first semester of 2015 (actual) and second semester of 2015 (expected). We 
derived  an  annual  growth  rate  (  )  between  2014-2017  consistent  with  the  TERA  Consultants'  assumptions 
(calculated  as  (     )       ),  where  g  is  the  percentage  change  in  volumes  between  2014-2017  in  TERA 
Consultants'  cost  model.  For  one  Dutch  operator  we  used  the  average  ratio  between  wholesale  roaming  and 
domestic  retail  traffic  of  other  Dutch  operators  to  derive  missing  wholesale  roaming  volumes.  In  addition, 
missing data for outbound roaming volumes by destination country have been imputed using the total roaming 
volume  for  the  operator  and  assuming  a  distribution  of  volume  by  country  that  is  identical  to  the  median 
distribution  of  other  operators  in  the  same  country.  This  imputation  is  done  after  the  imputation  previously 
described. 

89 

 
 
 
                                                 
Table 17: Assumed percentage change in outbound roaming volumes between 2014-2017 

% change in voice volumes 
% change in SMS volumes 
% change in data volumes 

28% 
5% 
920% 

In  our  view,  our  traffic  forecast  assumptions  are  likely  to  be  in  the  higher  range  of  traffic 
forecast assumptions and thereby challenging for our sustainability analysis,  as we assume a 
significant increase in roaming services' traffic, particularly for data. This will tend to increase 
the potential for unsustainability of RLAH for net senders of roaming traffic if such traffic is 
loss-making for them at the unit level. We believe this is likely to increase the robustness of 
our sustainability analysis, i.e. to increase its reliability as a gauge of the worst-case scenario 
in terms of RLAH sustainability. 

(b) Costs of providing retail roaming services 

The costs of providing retail roaming services are derived using the formula below: 

Costs of retail roaming services                                                                            

We derived retail roaming costs using regression analysis on the data on retail roaming costs 
provided  by  operators  in  response  to  our  autumn  information  request.102  In  particular,  we 
derived the relationship between retail roaming costs and the operators' retail roaming voice 
volumes in 2014. We then used this relationship to derive retail roaming costs in 2017 (using 
our forecast retail roaming voice volumes for that year).  

We  derive  wholesale  roaming  payments  for  unbalanced  traffic  in  2017  using  the  formula 
below: 

∑ ∑(                      )   (                  )     (              )   (               ) 

Where: i = intra-EEA countries; k = service (1= voice, 2 = sms, 3 = data). 

In relation to the variables used to derive wholesale roaming payments, we estimate these as 
follows: 

               =  This is the same variable we use to derive wholesale roaming costs. 

 
                 = Wholesale roaming price cap for service k in the country of the visited operator  
                       = The wholesale service k volume as home operator for intra EEA outbound 

roaming traffic to country i in 2017  

                   = The wholesale roaming price cap for service k in country i  

102 We note that we adjust retail roaming cost data provided by operators in response to our autumn information 
request  to  reflect  roaming  costs  relating  to  intra-EEA  traffic  only.  We  assume  65%  of  the  retail  roaming  cost 
provided by operators relates to intra-EEA roaming, consistent with the assumption made in TERA Consultants' 
cost  model  for  wholesale  roaming  costs.  This  is  based  on  the  share  of  roaming  traffic  to  EEA  vs  non-EEA 
countries.  

90 

 
 
 
 
                           
  
                                                                                
  
 
   
 
   
 
 
 
                                                 
The wholesale price caps in 2017 considered for inbound traffic (               ) and outbound 
roaming  traffic  (                 )  are  the  wholesale  price  caps  in  each  of  the  options 
considered in our impact assessment, described in section 5 above.  

For the outbound roaming traffic per country (                     ) we use data gathered from 
operators  in  our  autumn  information  request  on  their  traffic  disaggregated  by  destination 
country.103  Similarly  to  the  inbound  roaming  traffic,  we  take  the  2014  volumes  and  project 
these to 2017 using the same assumptions described in Table 17 above.104  

We  note  that  in  the  formula  that  we  have  considered  for  wholesale  roaming  payments  for 
unbalanced traffic the result can only be either of (i) zero or (ii) positive. In other words, we 
exclude  the  possibility  that  a  net  receiver  of  wholesale  roaming  traffic  will  have  a  negative 
wholesale roaming payment balance (i.e. revenues at the wholesale level from the provision 
of wholesale roaming services). 

In addition our analysis does not consider the costs and revenues from mobile calls terminated 
while  roaming,  as  we  did  not  gather  data  on  mobile  calls  terminated  while  roaming  at  an 
operator level in our autumn information request. However, we note that most calls originated 
by  roaming  customers  are  terminated  on  the  subscriber's  home  country  operators.  Thus,  we 
consider that revenues from calls terminated while roaming are likely to increase the revenues 
of operators that are net senders (rather than net receivers of inbound roaming traffic), thereby 
improving the overall sustainability of RLAH.   

(c) Retail roaming margin 

We  estimate  the  retail  roaming  margin  as  the  difference  between  the  revenues  from  the 
provision  of  retail  roaming  services  (a)  above  and  the  costs  of  providing  retail  roaming 
services  (b)  above  (in  other  words:  (b)  –  (a)  above).  We  note  that  a  positive  retail  roaming 
margin means that sustainability is not an issue, as the operator makes a positive margin on 
retail services.   

(d) Domestic margin:  

We derive the domestic margin in 2017 using the formula below: 

                  ∑ (             )  (            )

    (             ) 

Where: k = (1=voice, 2=sms, 3=data). 

In relation to the variables used to derive the domestic margin, we estimate these as follows: 

                = the operator's domestic retail price for service k in 2017 (this is the same variable we use 

to derive revenues from the provision of retail roaming services above); 

               = the operator's domestic retail traffic for service k in 2017; and  
                = the operator's assumed domestic retail margin in 2017 in percentage.  

103Some  of  the  operators  in  our  sample  did  not  provide  total  outbound  roaming  traffic  disaggregated  by 
destination  country.  For  these  we  used  the  total  outbound  roaming  traffic  of  the  operator  and  assumed  a 
distribution of volume by country identical to the median distribution of other operators in the same country. 
104Note  that  we  assume  the  same  percentage  change  between  2014-2017  for  inbound  and  outbound  roaming 
traffic. 

91 

 
 
 
 
   
 
                                                 
We  derive  the  domestic  retail  traffic  in  2017  (             )  using  the  operator's  domestic 
retail traffic for service k in 2014 and projecting these volumes to derive the forecast volumes 
in 2017 using the same assumption used in TERA Consultants' cost model.105 We present the 
expected change in domestic retail traffic between 2014-2017 in Table 18 below.  

Table 18: Assumed percentage change in domestic retail traffic between 2014-2017 

% change in voice volumes 
% change in SMS volumes 
% change in data volumes 

6% 
3% 
265% 

Finally,  for  the  purposes  of  deriving  the  domestic  retail  margin,  we  assume  a  different 
domestic  retail  margin  (             )  for  each  of  the  scenarios  modelled  (as  described 
below).  

(e) Sustainability 

Finally, we estimate sustainability for each operator as follows: 

Where  each  of  the  retail  roaming  margin  and  the  domestic  retail  margin  are  calculated  as 
explained above. 

Results and sensitivity analysis 

In  order  to  assess  sustainability  by  operator  we  have  run  a  sensitivity  analysis  on  our  Base 
case scenario results estimating the operator sustainability under two additional scenarios for 
each  of  the  three  wholesale  price  caps  that  we  have  considered  in  our  impact  assessment. 
Each  of  the  scenarios  considered  takes  into  account  the  assumptions  described  in  Table  19 
below. 

Table 19: Assumptions considered in each of the three sustainability scenarios 

Domestic 
retail margin 
Retail prices 
Volumes 

Scenario 1 – Low sustainability 
10% 

Scenario 2 – High sustainability 
50% 

Scenario 3 – Base case scenario 
30% 

DG CNECT study – 20% 
Outbound traffic + 20%; 
Domestic retail traffic – 20% 

DG CNECT study 
Outbound traffic - 20%; Domestic 
retail traffic + 20% 

DG CNECT study 
Volumes derived using the 
approach described in the 
previous section 

In other words: 

105 For some operators that did not provide retail domestic revenues and traffic, we derived these variables using 
a regression approach.  Namely, the relevant variable is regressed against the number of total subscriptions and 
country  dummies:  log(y)  =  beta*X,  where  X=[constant  log(total  subscribers)  country_dummies]  and  beta  is  a 
vector  of  coefficients.  Then  the  predicted  value  of  y  is  used  whenever  y  is  missing  and  total  subscribers  has 
valid data. 

92 

 
 
 
 
                  
                     
                      
        
 
 
                                                 
  Scenario  1-Low  sustainability  scenario:  the  scenario  that  is  likely  to  produce  the 
lowest  sustainability,  as  it  assumes  a  low  10%  domestic  retail  margin;  reduces  the 
estimated  domestic  retail  prices  by  20%  and  increases  the  outbound  roaming  traffic 
forecast by 20% while reducing the forecast domestic retail volumes by 20%;  

  Scenario  2-High  sustainability  scenario:  the  scenario  that  is  likely  to  produce  the 
highest sustainability, as it assumes a high 50% domestic retail margin and reduces the 
forecast outbound roaming traffic by 20% while increasing the forecast domestic retail 
volumes by 20%;  

  Scenario  3-  Base  case  scenario:  the  scenario  to  which  we  attach  the  highest 
probability  given  its  underlying  assumptions  of  a  30%  domestic  retail  margin;  the 
retail  prices  derived  using  the  DG  CNECT  study  and  the  volume  forecast  derived 
using BEREC data; 

We  have  presented  the  results  of  our  sustainability  analysis  under  the  Base  case  scenario 
(Scenario 3 in Table 19 above) in the main body of our impact assessment. In Table 20 below, 
for  each  of  the  wholesale  price  cap  options  considered  (Options  2,  3  and  4)  we  present  the 
percentage of operators in the sample that have: 

  Positive sustainability (i.e. RLAH does not result in a negative retail roaming margin) 
  Negative  margin  on  retail  roaming  services  and  the  percentage  of  operators  in  the 

sample that have a negative margin: 

o  Below 1% of the domestic retail margin 
o  Between 1-3% 
o  Between 3-5% 
o  Greater than 5% 

We  present  the  results  in  terms  of  the  percentage  of  operators  under  each  of  the  three 
scenarios modelled using the format [x%-y%] (z%) in Table 20, where: 

  x% is the percentage of operators under Scenario 1 (Low sustainability); 
  y% is the percentage of operators under Scenario 2 (High sustainability); and 
  z% is the percentage of operators under Scenario 3 (Base case scenario). 

Table  20:  Sustainability  results  for  each  wholesale  price  cap  option  under  each  of  the  three 
scenarios modelled 

Option 2  
Option 3  
Option 4  

Positive sustainability 
[58%-72%] (66%) 
[81%-91%] (88%) 
[86%-91%] (88%) 

<1% 
[2%-6%] (6%) 
[5%-3%] (5%) 
[3%-5%] (5%) 

1-3% 
[3%-11%] (5%) 
[5%-5%] (2%) 
[3%-3%] (3%) 

3-5% 
[3%-5%] (5%) 
[2%-2%] (5%) 
[0%-2%] (3%) 

>5% 
[34%-6%] (19%) 
[8%-0%] (2%) 
[8%-0%] (2%) 

Sustainability % 

As  can  be  seen  in  Table  20  above,  the  results  under  the  scenarios  with  Low  sustainability 
(Scenario 1) and High sustainability (Scenario 2) are in line with the results under our Base 
case  scenario  (Scenario  3).  In  a  nutshell,  Option  3  (single  EU-wide  cap)  and  Option  4 
(country-specific caps) present similar results, albeit the positive sustainability under the Low 
sustainability scenario for Option 4 (86% of operators in the sample) is slightly higher than 
for Option 3 (single EU-wide caps) under the same scenario (81%). Similarly, the proportion 
of operators with a negative sustainability between 1-5% and higher than 5% is also different 
for  each  of  the  two  options,  albeit  only  slightly.  Option  2  clearly  has  the  lowest  positive 
sustainability and highest negative sustainability.  

93 

 
 
 
 
 
In light of the above, we consider that the sensitivity analysis conducted on our sustainability 
assessment  does  not  change  our  conclusions  presented  in  the  main  body  of  our  impact 
assessment.  

94