20.4.2006 helsinki university of technology 1 regulation of roaming services by kristian dahlgren...

20.4.200620.4.2006 Helsinki University of TechnologyHelsinki University of Technology 11

Regulation of Regulation of Roaming Services Roaming Services by Kristian Dahlgrenby Kristian Dahlgren

T-109.7510T-109.7510Research Seminar on Research Seminar on Telecommunications Business, Spring Telecommunications Business, Spring 20062006


AgendaAgenda

Introduction to roamingIntroduction to roaming Share of roaming traffic of operator revenueShare of roaming traffic of operator revenue Pricing practices of roamingPricing practices of roaming Marketing practices of roamingMarketing practices of roaming Roaming contracts between operatorsRoaming contracts between operators Influence of international consolidation of operatorsInfluence of international consolidation of operators Impact of MMS, Internet access and broadcasting Impact of MMS, Internet access and broadcasting

(DVB-H) services to roaming(DVB-H) services to roaming How to (de)regulate roaming in Europe more How to (de)regulate roaming in Europe more

efficiently?efficiently? ConclusionsConclusions


Introduction to Introduction to roamingroaming What is roaming?What is roaming?

The ability for a cellular customer to automatically The ability for a cellular customer to automatically make and receive voice calls, send and receive data, make and receive voice calls, send and receive data, or access other services when traveling outside the or access other services when traveling outside the geographical coverage area of the home network, by geographical coverage area of the home network, by means of using a visited network.means of using a visited network.

Different types of roaming:Different types of roaming:National roaming, international roaming or global National roaming, international roaming or global roaming,roaming,inter-technology roaming, inter-regional roaming, GSM inter-technology roaming, inter-regional roaming, GSM roaming, GPRS roaming, SMS roaming and MMS roaming, GPRS roaming, SMS roaming and MMS roamingroaming


Introduction to Introduction to roaming cont.roaming cont. The prices of roaming services in Europe have The prices of roaming services in Europe have

maintained their high levels.maintained their high levels. The European Commission (EC) thinks that something The European Commission (EC) thinks that something

needs to be done.needs to be done. Second phase of a public consultation on mobile Second phase of a public consultation on mobile

roaming services has been launched by the EC.roaming services has been launched by the EC. The GSM Association (GSMA) is very skeptical about The GSM Association (GSMA) is very skeptical about

the need for regulation.the need for regulation. Wrong decisions could jeopardize the status of the Wrong decisions could jeopardize the status of the

European mobile markets.European mobile markets.


AgendaAgenda

Introduction to roamingIntroduction to roaming Share of roaming traffic of operator Share of roaming traffic of operator

revenuerevenue Pricing practices of roamingPricing practices of roaming Marketing practices of roamingMarketing practices of roaming Roaming contracts between operatorsRoaming contracts between operators Influence of international consolidation of operatorsInfluence of international consolidation of operators Impact of MMS, Internet access and broadcasting Impact of MMS, Internet access and broadcasting




Share of roaming Share of roaming traffic of operator traffic of operator revenue revenue Big business for the operatorsBig business for the operators More than 6 billion roaming calls were made in year 2000.More than 6 billion roaming calls were made in year 2000. Recent research from the Informa analyst group on Global Recent research from the Informa analyst group on Global

Mobile Roaming estimates that the number of international Mobile Roaming estimates that the number of international roamers will more than quadruple between 2004 and 2010.roamers will more than quadruple between 2004 and 2010.

In 2004 the number of international roamers were In 2004 the number of international roamers were 210,000,000 and in 2010 it could be as much as 850,000,000.210,000,000 and in 2010 it could be as much as 850,000,000.

Lower airline ticket prices are boosting peoples’ willingness to Lower airline ticket prices are boosting peoples’ willingness to travel.travel.

People want to use their mobile phones when visiting foreign People want to use their mobile phones when visiting foreign countries.countries.

Share of roaming traffic of operator revenue should increase.Share of roaming traffic of operator revenue should increase.


AgendaAgenda





Pricing practices of Pricing practices of roamingroaming Pricing practices of roaming are still complex, but Pricing practices of roaming are still complex, but

things are improving.things are improving. Many companies offer different kind of roaming Many companies offer different kind of roaming

solutions for operators.solutions for operators. By centralizing all the financial aspects of roaming in a By centralizing all the financial aspects of roaming in a

single place, operators can achieve competitive single place, operators can achieve competitive advantage and flexibility.advantage and flexibility.

Roaming prices depend on three things: the home Roaming prices depend on three things: the home network, the visited network and the destination of network, the visited network and the destination of the call.the call.

There are thousands of possible variants of There are thousands of possible variants of international retail roaming charges in Europe alone.international retail roaming charges in Europe alone.


Pricing practices of Pricing practices of roaming cont.roaming cont. Consumers are demanding greater transparency in Consumers are demanding greater transparency in

international retail roaming prices.international retail roaming prices. The level of service transparency varies depending on The level of service transparency varies depending on

the roaming agreement between the home and the the roaming agreement between the home and the visited network operators.visited network operators.

Many operators have already launched single-rate, zone-Many operators have already launched single-rate, zone-based roaming tariffs.based roaming tariffs.

The purpose is to simplify operators’ offerings.The purpose is to simplify operators’ offerings. Some operators charge monthly fees, which reduce Some operators charge monthly fees, which reduce

costs.costs. Some say that these new pricing practices do not bring Some say that these new pricing practices do not bring

anything new.anything new. The finding of the best deal is left to the consumer.The finding of the best deal is left to the consumer.


AgendaAgenda





Marketing practices of Marketing practices of roamingroaming Marketing practices of roaming services need Marketing practices of roaming services need

improvements.improvements. Roaming customers very seldom know how much Roaming customers very seldom know how much

roaming costs. It is argued that only 10% know the price.roaming costs. It is argued that only 10% know the price. Detailed information about the prices can be found from Detailed information about the prices can be found from

the operator websites.the operator websites. Information about the pricing of roaming services is Information about the pricing of roaming services is

mostly received from the mail sent by the operators.mostly received from the mail sent by the operators. In Finland Ficora and Consumer Agency would like to see In Finland Ficora and Consumer Agency would like to see

the awareness of roaming prices among consumers the awareness of roaming prices among consumers increasing.increasing.

More information about how to save in roaming charges is More information about how to save in roaming charges is also needed. 33% do not try to save at all.also needed. 33% do not try to save at all.


Marketing practices of Marketing practices of roaming cont.roaming cont. Some roamers do not even think about different Some roamers do not even think about different

issues related to roaming.issues related to roaming. It is not always clear what network should be chosen.It is not always clear what network should be chosen. 80% of roamers use the network, which is 80% of roamers use the network, which is

automatically selected by the mobile phone.automatically selected by the mobile phone. People are satisfied to the functionality, but very People are satisfied to the functionality, but very

unsatisfied to the price levels of using mobile phone unsatisfied to the price levels of using mobile phone abroad.abroad.

Operators could increase their roaming revenues, if Operators could increase their roaming revenues, if the issues mentioned would be solved.the issues mentioned would be solved.


AgendaAgenda





Roaming contracts Roaming contracts between operatorsbetween operators Operators have more than 20,000 roaming agreements.Operators have more than 20,000 roaming agreements. Elisa has roaming partners in 160 countries, with 300 Elisa has roaming partners in 160 countries, with 300

operators.operators. Finnet has partners in 120 countries, with 200 operators.Finnet has partners in 120 countries, with 200 operators. Sonera has partners in 172 countries, with 269 operators.Sonera has partners in 172 countries, with 269 operators. Operators can to some extent differentiate them from Operators can to some extent differentiate them from

rivals by having extensive roaming agreements.rivals by having extensive roaming agreements. Operators are constantly finding new roaming partners Operators are constantly finding new roaming partners

and new roaming agreements are quite common.and new roaming agreements are quite common. Roaming agreements are based on business issues.Roaming agreements are based on business issues.


AgendaAgenda

Introduction to roamingIntroduction to roaming Share of roaming traffic of operator revenueShare of roaming traffic of operator revenue Pricing practices of roamingPricing practices of roaming Marketing practices of roamingMarketing practices of roaming Roaming contracts between operatorsRoaming contracts between operators Influence of international consolidation Influence of international consolidation

of operatorsof operators Impact of MMS, Internet access and broadcasting Impact of MMS, Internet access and broadcasting




Influence of Influence of international international consolidation of consolidation of operatorsoperators Mergers and acquisitions (M&A) have been very common Mergers and acquisitions (M&A) have been very common

activities in the telecommunications industry.activities in the telecommunications industry. Alliances, fusions and purchases are almost a weekly thing.Alliances, fusions and purchases are almost a weekly thing. 3G is an important reason for the increase of consolidation.3G is an important reason for the increase of consolidation. Consolidation does not help the industry and operators Consolidation does not help the industry and operators

automatically.automatically. Consolidation and integration need to be well managed.Consolidation and integration need to be well managed. There are discussions whether the increased consolidation There are discussions whether the increased consolidation

could enable a global billing architecture.could enable a global billing architecture. Possible cost reductions could have an impact on roaming Possible cost reductions could have an impact on roaming

charges.charges. Huge companies like Vodafone offer good coverage almost Huge companies like Vodafone offer good coverage almost

anywhere.anywhere.


AgendaAgenda

Introduction to roamingIntroduction to roaming Share of roaming traffic of operator revenueShare of roaming traffic of operator revenue Pricing practices of roamingPricing practices of roaming Marketing practices of roamingMarketing practices of roaming Roaming contracts between operatorsRoaming contracts between operators Influence of international consolidation of operatorsInfluence of international consolidation of operators Impact of MMS, Internet access and Impact of MMS, Internet access and

broadcasting (DVB-H) services to broadcasting (DVB-H) services to roamingroaming

How to (de)regulate roaming in Europe more How to (de)regulate roaming in Europe more efficiently?efficiently?

ConclusionsConclusions


Impact of MMS, Internet Impact of MMS, Internet access and broadcasting access and broadcasting (DVB-H) services to roaming(DVB-H) services to roaming These new services will have an impact to roaming.These new services will have an impact to roaming. MMS is becoming more and more popular.MMS is becoming more and more popular. MMS could shrink the share of traditional postcards.MMS could shrink the share of traditional postcards. People would use these new services more frequently People would use these new services more frequently

when traveling, if the prices are better known.when traveling, if the prices are better known. It is important that the new services are easy to use.It is important that the new services are easy to use. Operators today mostly compete on value and quality Operators today mostly compete on value and quality

in their core services and by offering innovative in their core services and by offering innovative services in newer areas.services in newer areas.

Terminals are becoming more advanced.Terminals are becoming more advanced. Pricing practices and usability could be the Pricing practices and usability could be the

bottlenecks.bottlenecks.


AgendaAgenda


(DVB-H) services to roaming(DVB-H) services to roaming How to (de)regulate roaming in Europe How to (de)regulate roaming in Europe

more efficiently?more efficiently? ConclusionsConclusions


How to (de)regulate How to (de)regulate roaming in Europe more roaming in Europe more efficiently?efficiently? The European Commission (EC) is planning to regulate The European Commission (EC) is planning to regulate

international roaming in Europe.international roaming in Europe. The proposal has already met resistance from the The proposal has already met resistance from the

GSMA.GSMA. The EC should avoid the unwanted consequences.The EC should avoid the unwanted consequences. Negative outcomes would have long term, negative Negative outcomes would have long term, negative

effect on jobs, competitiveness and investment in the effect on jobs, competitiveness and investment in the European telecommunications industry.European telecommunications industry.

The big question is that whether the increased The big question is that whether the increased competition is enough to drive the international competition is enough to drive the international roaming prices down or is some regulation by the EC roaming prices down or is some regulation by the EC needed and what is the right balance between needed and what is the right balance between regulation and deregulation.regulation and deregulation.


How to (de)regulate How to (de)regulate roaming in Europe more roaming in Europe more efficiently? cont.efficiently? cont. The EC’s viewpoint is aiming for greater consumer The EC’s viewpoint is aiming for greater consumer

surplus.surplus. Operators’ investments would be dangerously harmed.Operators’ investments would be dangerously harmed. Investing in innovations is one important way to Investing in innovations is one important way to

differentiate from rivals in the mobile market.differentiate from rivals in the mobile market. International roaming is not an exception.International roaming is not an exception. The continuous fierce battle in the European The continuous fierce battle in the European

telecommuni-cations industry is forcing operators to be telecommuni-cations industry is forcing operators to be highly innovative and to offer new services and different highly innovative and to offer new services and different price tariffs to consumers.price tariffs to consumers.

Operators are benefiting from the increased number of Operators are benefiting from the increased number of international travelers and mobile phone users, but face international travelers and mobile phone users, but face challenges as users find ways to reduce costs and the challenges as users find ways to reduce costs and the general cost of telephony is declining.general cost of telephony is declining.


ConclusionsConclusions

We are living exciting times.We are living exciting times. Consumers are demanding more and their awareness of Consumers are demanding more and their awareness of

the issues related to roaming is constantly improving.the issues related to roaming is constantly improving. The EC is not happy with the current price levels of The EC is not happy with the current price levels of

roaming.roaming. Retail roaming prices declined 8% last year.Retail roaming prices declined 8% last year. The European mobile market is highly competitive.The European mobile market is highly competitive. Regulation could seriously harm the entire business.Regulation could seriously harm the entire business. Thorough studies are needed before any regulation is Thorough studies are needed before any regulation is

accepted.accepted. The importance of roaming is increasing.The importance of roaming is increasing. With right decisions and favorable developments, the With right decisions and favorable developments, the

future of roaming will be bright.future of roaming will be bright.


Keep on roamingKeep on roaming

Thank YouThank You

Time for the opponent Time for the opponent

Questions and discussionsQuestions and discussions

20.4.2006 helsinki university of technology 1 regulation of roaming services by kristian dahlgren...

Documents

international roaming

gsm roaming

global roaming

gprs roaming

mobile roaming services

regulation of roaming

prices of roaming services

intertechnology roaming