Opinion of the European Economic and Social Committee on the ‘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 — 2016/185 (COD))
Date: 2016-10-19
Institutions: European Economic and Social Committee
Subjects: consumer protection, price regulations, regulation of telecommunications, retail trade, single market, telephone charges, transmission network, wholesale trade








C_2017034EN.01016201.xml










2.2.2017   


EN


Official Journal of the European Union


C 34/162





Opinion of the European Economic and Social Committee on the ‘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 — 2016/185 (COD))
(2017/C 034/27)






Rapporteur:



Raymond HENCKS











Consultation


European Parliament, 04/07/2016
European Council, 07/07/2016




Legal basis


Article 114 of the Treaty on the Functioning of the European Union

(COM(2016) 399 final — 2016/185 (COD))





Section responsible


Transport, Energy, Infrastructure and the Information Society




Adopted in section


06/10/2016




Adopted at plenary


19/10/2016




Plenary session No


520




Outcome of vote
(for/against/abstentions)


224/3/4




1.   Conclusions and recommendations









1.1.


The EESC has consistently supported eliminating any specific charges for roaming mobile communications. It supports the Commission’s initiatives to achieve ‘roam-like-at-home’ from 15 June 2017 as well as its efforts to eliminate the failures of the wholesale roaming market, which risk jeopardising this objective, before that point.












1.2.


Along with abolishing roaming charges, pre-emptive measures will be necessary to prevent operators from compensating for the drop in revenue resulting from the abolition of roaming charges by increasing domestic charges or by means of other improper practices. Similarly, it will be important to ensure that domestic charges, especially bundled offers, are made more transparent and that the regulatory authorities work with consumer organisations to develop a standard format for presenting the breakdown of charges.












1.3.


The EESC considers that the Commission’s proposed maximum average wholesale charges that the visited operator may levy on the roaming provider for the provision of a call, SMS message and data roaming services, are reasonable and should allow for a sufficient margin to enable healthy competition between wholesale mobile roaming service providers.












1.4.


However, the EESC expresses serious reservations about the new possibility given to operators by the proposal in question to negotiate ‘innovative wholesale pricing schemes’ outside the regulated prices (caps) that would not be directly linked to the actual volumes consumed. Commercial negotiations based on flat payments, up-front commitments or capacity are likely to lead to cartels and abuses of dominant positions by large operators and by those with access to a network that has national coverage, to the detriment of small operators and virtual mobile network operators, which will serve only to bolster the existing oligopolies and bilateral roaming agreements that the Commission considers to be the source of the market’s current failures.












1.5.


The EESC welcomes the proposal in this regulation that, in the event of a dispute between operators about wholesale roaming markets, national regulatory authorities should be obliged to seek the opinion of BEREC on action to be taken, as this will lead to greater consistency between the regulatory approaches adopted by these national authorities. The EESC suggests that the provisions dealing with disputes should be fleshed out and national authorities should be asked to encourage the parties involved, where appropriate, to first resort to resolving disputes via an alternative dispute resolution procedure.




2.   Introduction









2.1.


The EU’s objective of achieving a connected continent based on state-of-the-art infrastructure and affordable fixed and wireless service prices has come up, among other things, against excessively high European mobile communications prices for roaming which are significantly higher than the domestic rates charged for the same service.












2.2.


The Commission first urged mobile operators to reduce excessive charges for roaming mobile communication in 2006, but since that and the many other subsequent calls proved fruitless, in 2007 the EU started to introduce a cap on charges (the Eurotariff) covering both the wholesale and retail markets for voice calls within Europe, then for SMS messages and finally for the transmission of roaming data. All of this was done in the hope that healthy competition would develop and that users would no longer be forced to pay excessive charges.












2.3.


The maximum roaming charges for voice calls, sending SMS messages and using data services, including MMS messages, therefore had to be successively lowered (see the table below) with a view to the ultimate objective of achieving complete abolition of roaming charges and aligning the charges for communications within Europe with the charges applied domestically.












 



Voice calls


EUR/minute


excluding VAT




SMS messages


EUR/SMS message


excluding VAT




Data


EUR/kilobyte


excluding VAT






Wholesale charge




Retail charge for calls made




Retail charge for calls received




Wholesale charge




Retail charge




Wholesale charge




Retail charge







Average

charge before 1.9.2007



 


0,7692 


0,417 


----


----


----


----






Regulation (EC) No 717/2007






Max. charge 1.9.2007-31.8.2008


0,30 


0,49 


0,24 


----


----


----


----




Max. charge 1.9.2008-30.6.2009


0,28 


0,46 


0,22 


----


----


----


----




Max. charge 1.7.2009-30.6.2010


0,26 


0,43 


0,19 


0,04 


0,11 


1,00 


----






Regulation (EC) No 544/2009






Max. charge 1.7.2010-30.6.2011


0,22 


0,39 


0,15 


0,04 


0,11 


0,80 


----




Max. charge 1.7.2011-30.6.2012


0,18 


0,35 


0,11 


0,04 


0,11 


0,50 


----




Max. charge 1.7.2012-30.6.2013


0,14 


0,29 


0,08 


0,03 


0,09 


0,25 


0,70 






Regulation (EU) No 531/2012






Max. charge 1.7.2013-30.6.2014


0,10 


0,24 


0,07 


0,02 


0,08 


0,15 


0,45 




Max. charge 1.7.2014-30.6.2015


0,05 


0,19 


0,05 


0,02 


0,06 


0,05 


0,20 




Max. charge 1.7.2015-30.6.2017


0,05 


0,19 


0,05 


0,02 


0,06 


0,05 


0,20 




Max. charge 1.7.2015-30.6.2022


0,05 


 


 


0,02 


 


0,05 


 
















2.4.


No mobile network covers all EU Member States. As a consequence, in order to be able to provide mobile communications services to their domestic customers travelling in another Member State, roaming providers have to purchase such wholesale services from, or exchange roaming services with, operators active in the visited country.












2.5.


The cap on charges in the EU was accompanied by structural measures, inter alia, for the wholesale roaming market (1). Thus, visited mobile network operators have to:






—


meet all reasonable requests for access to roaming services and may only refuse requests for wholesale roaming access on the basis of objective criteria;










—


publish a sufficiently detailed reference offer, in line with the guidelines of the Body of European Regulators for Electronic Communications (BEREC), and make it available to companies requesting wholesale roaming access;










—


provide companies requesting access with a draft contract for this access at the latest one month after the initial receipt of the request by the mobile network operator. The wholesale roaming access is to be granted within a reasonable period of time not exceeding three months from the conclusion of the contract;










—


reply within a period not exceeding two months to an operator’s request to enter into commercial negotiations to also include components not covered by the reference offer.
















2.6.


Finally, Regulation (EU) 2015/2120 states that with effect from 15 June 2017, but subject to fair use and to a positive outcome of a review of the proper operation of the market, roaming providers may no longer levy any surcharge in comparison to the domestic retail price on roaming customers in any Member State for any regulated roaming voice call made or received, for any regulated roaming SMS message sent and for any regulated data roaming services used, nor any general charge to enable the terminal equipment or service to be used abroad.












2.7.


However, in specific and exceptional circumstances, with a view to ensuring the sustainability of its domestic charging model, where a roaming provider is not able to recover its overall actual and projected costs of providing regulated roaming services, it may apply for authorisation to apply a surcharge. That surcharge may be applied only to the extent necessary to recover the costs of providing regulated retail roaming services, taking the applicable maximum wholesale charges into account.












2.8.


However, it is apparent from the report on the review of the wholesale roaming market (COM(2016) 398) that the planned structural measures were not sufficient, as regards the internal market for roaming services, to boost competition and achieve an internal mobile communication services market with no distinction between domestic and roaming tariffs.












2.9.


This analysis of the markets shows that a number of market failures still affect the functioning of wholesale markets, due to their oligopolistic character combined with the bilateral nature of roaming agreements, the lack of substitutes at wholesale level and prices that are substantially higher than estimated costs, particularly for data services.












2.10.


As there is a close correlation between the wholesale and retail markets, and in the absence of a sufficient margin between wholesale and retail prices, the objective of ‘roam-like-at-home’ becomes impracticable and structurally non-viable, particularly for small operators, virtual mobile network operators and operators with high net outgoing traffic.












2.11.


The Commission has therefore been forced to propose fresh EU regulatory intervention on wholesale roaming markets.












2.12.


Article 6d of Regulation (EU) 2015/2120, amending Regulation (EU) No 531/2012, calls on the Commission, among other things, to put forward an implementing act by 15 December 2016 laying down detailed rules on operators’ application of a fair use policy with regard to the consumption of regulated retail roaming services provided at the applicable domestic retail price. For the time being, this implementing act is outstanding, as an initial proposal was withdrawn by the Commission.




3.   Content of the Commission proposal









3.1.


The proposal for a review of Regulation (EU) No 531/2012 stipulates:






—


the reduction, for the period from 15 June 2017 to 30 June 2022, of the average maximum wholesale roaming charges:






—


from EUR 0,05 per minute to EUR 0,04 per minute for a call;










—


from EUR 0,02 to EUR 0,01 for an SMS message;










—


from EUR 0,05 per megabyte to EUR 0,0085 per megabyte for data service;














—


the possibility for the two parties to a wholesale roaming agreement to expressly agree not to make the application of the agreement subject to the maximum wholesale price set out in the regulation for a specific period;










—


in the event of a dispute between visited network operators and other operators concerning wholesale roaming services, the obligation for national regulatory authorities to consult BEREC on the action to be taken;










—


the Commission to draft a report, to be submitted every two years from 15 June 2017 to the European Parliament and the Council, on the basis of data collected by BEREC on the development of competition in EU roaming markets.








4.   General comments









4.1.


In its previous opinions, the EESC has consistently supported the Commission’s proposals on capping roaming charges, considering them to be a step in the right direction, i.e. towards the removal in the medium term of any specific form of charge on roaming mobile communications. Thus it can only endorse the Commission’s new proposals seeking to eliminate the shortcomings of the wholesale roaming market, which are in danger of jeopardising the implementation of ‘roam-like-at-home’, from 15 June 2017.












4.2.


As regards ‘roam-like-at-home’, the EESC points out that it has consistently warned against possible counter-productive effects and that it has called on regulatory authorities to take pre-emptive measures to prevent operators from compensating for the drop in revenue resulting from the abolition of roaming charges by increasing domestic charges or by means of other improper practices detrimental to consumers, such as charging to access a network (an activation fee) without communication having taken place.












4.3.


So that consumers can effectively benefit from ‘roam-like-at-home’, and ensure that there is no increase in domestic charges, the EESC reiterates its suggestion that the regulatory authorities should work with consumer organisations to develop a standard format for presenting the breakdown of charges, so as to make charges — particularly bundled offers — more transparent.












4.4.


The EESC is keenly aware that the maximum wholesale charges should enable operators to recover their costs while leaving a reasonable profit margin. However, as the Commission acknowledges (2), assessing the costs of providing wholesale roaming services is a complex task that entails a large number of choices and assumptions and it is not free from uncertainties.












4.5.


Given the different elements that are an integral part of the cost of providing wholesale roaming services (mobile termination rate in country of origin and destination country), as well as other costs, in particular unregulated transit costs, the ceilings proposed by the Commission seem reasonable and should leave a sufficient margin to enable healthy competition between providers of wholesale roaming services.












4.6.


The EESC expresses serious reservations about the new possibility given to operators by the proposal in question to negotiate ‘innovative wholesale pricing schemes’ outside the regulated prices (caps) that would not be directly linked to the actual volumes consumed. Commercial negotiations based on flat payments, up-front commitments or capacity are likely to lead to cartels and abuses of dominant positions by large operators and by those with access to a network that has national coverage, to the detriment of small operators and virtual mobile network operators.












4.7.


The EESC welcomes the proposal that, in the event of a dispute between operators about wholesale roaming markets, national regulatory authorities should be obliged to seek the opinion of BEREC on action to be taken, as this will lead to greater consistency between the regulatory approaches adopted by these national authorities. The EESC suggests that the provisions dealing with disputes should be fleshed out and national authorities should be asked to encourage the parties involved, where appropriate, to first resort to resolving disputes via an alternative dispute resolution procedure.





Brussels, 19 October 2016.


The President of the European Economic and Social Committee

Georges DASSIS




(1)  OJ L 172, 30.6.2012, p. 10.

(2)  COM(2016) 398 final.