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Article
Publication date: 12 March 2018

Simon Forge and Lara Srivastava

Tariffs for international mobile roaming (IMR) are often viewed by governments as an additional tax on international trade and on tourism. IMR customer bills may appear to be…

Abstract

Purpose

Tariffs for international mobile roaming (IMR) are often viewed by governments as an additional tax on international trade and on tourism. IMR customer bills may appear to be arbitrary and sometimes excessive. The purpose of this paper is therefore to set out a pragmatic approach to assessing international charges for mobile roaming, making use of a realistic cost model of the international roaming process and its cost elements, at a level that is useful to regulatory authorities and operators.

Design/methodology/approach

The discussion presented is based on industry practices for handling voice calls and data sessions with the mobile network operators (MNOs) business model, based on industry sources. The basic mechanisms use two common constructs from business analysis – business processes and use-cases – to provide a simplified form of activity-based costing. This provides a model suitable for national regulatory authorities to move towards cost-based IMR tariffs.

Findings

Using a perspective on costs based on a bottom-up survey procedure for elucidating the key information, the paper presents the cost elements for the various IMR network components and business processes, with an approach suitable for analysing both wholesale and retail pricing.

Research limitations/implications

The method is specifically designed to overcome the key problem of such approaches, the limitations set by differences in network technologies, network topology, operational scale and the engineering, as well as MNO business model and accounting practices, which otherwise would preclude the method presented here from being vendor neutral.

Practical implications

Vendor and network engineering neutrality implies the approach can be used to compare different MNOs in terms of the validity of their IMR charges and whether they are cost based.

Social implications

Impacts on society of so-called “bill-shock” have become quite common, increasingly for data sessions. The cost model presented here was developed with the intention of improving the accountability and transparency of the mobile roaming market. It thus assists in the introduction of cost-based tariffs over an economic region, such the European Union.

Originality/value

The paper examines the practical implications of building large-scale cost models for assessing the real IMR costs, a modelling exercise that has not been seen elsewhere in terms of its approach and neutrality as to MNO structure and assets.

Details

Digital Policy, Regulation and Governance, vol. 20 no. 2
Type: Research Article
ISSN: 2398-5038

Keywords

Article
Publication date: 29 June 2010

Ewan Sutherland

This paper aims to examine international mobile roaming in the Caribbean.

Abstract

Purpose

This paper aims to examine international mobile roaming in the Caribbean.

Design/methodology/approach

This paper examines first, the question of the number of mobile phones and revenues; then secondly, it examines the background to the roaming issue as it emerged in Europe. Thirdly, it looks at regulatory initiatives in the Americas. Fourthly, it looks at issues related to tourists, including those on cruise ships. Fifthly, it examines commercial initiatives to offer roaming without surcharges. Sixthly, it examines possible regulatory measures to achieve policy goals. Finally, conclusions are drawn and future research topics identified.

Findings

The public policy goals are clear – to ensure competition, to achieve affordable prices and universal access. The challenge is to translate these into specific measures for international mobile roaming.

Originality/value

There appear to be two retail markets, one for IMR as part of a post‐paid mobile service and the other a pre‐paid offer.

Details

info, vol. 12 no. 4
Type: Research Article
ISSN: 1463-6697

Keywords

Article
Publication date: 26 June 2009

Morten Falch, Anders Henten and Reza Tadayoni

The purpose of the paper is to analyze the need for regulation of international roaming within EU beyond 2010.

Abstract

Purpose

The purpose of the paper is to analyze the need for regulation of international roaming within EU beyond 2010.

Design/methodology/approach

The paper analyzes roaming costs, market conditions and present regulation. On this basis, future prospects for competition in international roaming are discussed.

Findings

Market developments indicate that regulation of international roaming charges will be needed for some time, before competition can ensure that roaming charges are at a level that reflects the underlying costs.

Research limitations/implications

The paper limits its analysis to roaming of voice services, and excludes analysis of roaming of data service services.

Originality/value

The paper contributes to the ongoing discussion on the need to regulate international roaming charges.

Article
Publication date: 10 May 2011

Alison Gillwald and Muriuki Mureithi

The purpose of this paper is to understand the conditions that enabled the end of roaming charges in East Africa in 2006, achieving in weeks what European regulators had struggled

Abstract

Purpose

The purpose of this paper is to understand the conditions that enabled the end of roaming charges in East Africa in 2006, achieving in weeks what European regulators had struggled with for nearly a decade. To do so it aims to explore the factors that drove marginalized operator Zain to seize the competitive advantage created by it having licenses in three adjoining markets.

Design/methodology/approach

The paper draws on the theory of disruptive competition and innovation pioneered by Clayton Christensen to explain the innovative and disruptive nature of the Zain business model. It is drawn on to explain why, despite Zain being unable ultimately to dominate its competitors, it had a sustained disruptive effect on the entire market. This provides a theoretical lens through which to view the empirical evidence acquired through in‐depth interviews and market analysis. This is used to develop a detailed case study on the dropping of roaming charges in East Africa.

Findings

The case study demonstrates the importance of an enabling policy and regulatory environment, which allowed operators to integrate historically separate national networks into cross‐border operations, undermining roaming markets in the region and ending roaming charges in East Africa forever. With the high price of communications in East Africa and the premium charges placed on international mobile roaming, the effect of this move was to compel other regional operators to follow suit, and further, to institute various other pricing strategies in an attempt to retain or recover their dominant positions. As a result, not only did roaming charges disappear across major networks, but the prices of various other mobile services also fell as subscriber numbers soared.

Research limitations/implications

Research in this area is severely constrained by the inability to access pricing, traffic and revenue data from operators that is regarded as competitively sensitive. As a result it is often difficult to assess the immediate gains and losses of competitors and failure to get consistent data over time, the ability to assess lags and long‐term positions. A longer term review of the impact of these developments on pricing and the dynamics of the East African market in future would provide valuable insight into the longer term effects of these developments.

Practical implications

As policy makers and regulators elsewhere in Africa start to emulate European “best practice” regulation, despite the difficulties mature and resourced regulators in the European Union face in instituting legally binding maximum tariffs for roaming, a valuable alternative policy and regulatory strategy exists in the creation of enabling competitive environments in which incentives to reduce to eliminate roaming charge, rather than retain environments in which international call termination on roaming phones can be arbitraged.

Social implications

Even though ultimately Zain was not successful as a disruptive competitor, it forced the dominant operators to reduce their roaming charges that resulted in sustained welfare gains.

Originality/value

This paper provides both novel theoretical insight and empirical evidence to explain the end of roaming charges in East Africa. It nuances perceptions in the popular and technical press that this was purely a market strategy that could be emulated anywhere else. It highlights the necessary enabling policy and regulatory environment that needed to be created and provides empirical evidence of the impact on competition in the market and analyses the outcomes of Zain's short term business strategy, against the longer term disruptive effect on the market.

Details

info, vol. 13 no. 3
Type: Research Article
ISSN: 1463-6697

Keywords

Article
Publication date: 1 March 2013

Richard A. Cawley

This paper aims to examine the recent performance of European Union (EU) telecommunications policy in the context of the policy aims set out in the original green paper of 1987

Abstract

Purpose

This paper aims to examine the recent performance of European Union (EU) telecommunications policy in the context of the policy aims set out in the original green paper of 1987. It also aims to consider some problems encountered in applying the regulatory rules to interconnection, mobile roaming and broadband.

Design/methodology/approach

The paper draws on economic and institutional analysis undertaken in 2007, complemented with monitoring of the EU policy response and empirical evidence until 2012.

Findings

The paper finds that, despite the success of the regulatory reform of 2003, the EU has encountered problems in dealing with a few “big ticket” policy items via its market reviews. The difficulties stem from a mix of factors, including poor methodological design and an erroneous assumption that effective competition is feasible in all market segments. Three main avenues for improvement are suggested, whilst retaining the basic structure of the cycle of market reviews.

Originality/value

The paper draws on theory, as well as empirical and institutional evidence over two decades, to highlight some flaws in dealing with some key telecommunications policy issues in the EU. It is of value to policy makers, industry analysts and academics.

Article
Publication date: 11 May 2010

Ewan Sutherland

The purpose of the paper is to review the progress made with the EU Roaming Regulation and to identify policy options from the review that the EC must now undertake.

Abstract

Purpose

The purpose of the paper is to review the progress made with the EU Roaming Regulation and to identify policy options from the review that the EC must now undertake.

Design/methodology/approach

The paper presents a review of the development of the two regulations, of the market developments in the EU and beyond, and an identification of the policy and regulatory options.

Findings

The new Commission is constrained by the decision not to use a competition law approach and the lack of a robust market definition, and thus a further period of price controls seems unavoidable.

Research limitations/implications

Key documents and data are not available, making analysis of certain constraints and revenue flows between operators impossible to evaluate.

Practical implications

The EC will have to craft a new set of price controls and develop a pathway towards the use of the directives to regulate roaming charges.

Originality/value

The paper is a first attempt to identify options and constraints for the future regulation of international mobile roaming charges.

Details

info, vol. 12 no. 3
Type: Research Article
ISSN: 1463-6697

Keywords

Article
Publication date: 25 January 2008

Ewan Sutherland

The purpose of this paper is to review the effectiveness of the various initiatives taken to regulate international mobile roaming over the last decade.

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Abstract

Purpose

The purpose of this paper is to review the effectiveness of the various initiatives taken to regulate international mobile roaming over the last decade.

Design/methodology/approach

The paper is an analysis of the policies and the measures and their effects on prices and industry dynamics.

Findings

The paper finds that economic approaches through both competition law and the current European Union regulatory package failed. However, an ad hoc political initiative by a determined European Commissioner did finally work.

Research limitations/implications

Lack of industry data, disaggregated for roaming, makes it difficult to determine the eventual effects on operators. Further data on revenues and on any increase in demand from price reductions would greatly help understanding.

Practical implications

In this paper the use of a relatively crude policy instrument raises concerns about the use of more sophisticated economic approaches in difficult cases.

Originality/value

The paper reviews the sequence of efforts and the problems encountered.

Details

info, vol. 10 no. 1
Type: Research Article
ISSN: 1463-6697

Keywords

Article
Publication date: 1 February 2000

Kidnapillai Selvarajah

Contends the best strategy for facing up to the growing demand for services in mobile communications is to learn from the experience of other countries around the globe. Addresses…

Abstract

Contends the best strategy for facing up to the growing demand for services in mobile communications is to learn from the experience of other countries around the globe. Addresses the key role of regulation, formulating policy framework, overcoming incumbents’ resistance and public scrutiny. Summarizes that the mobile communications sector is the fastest growing area within telecommunications.

Details

info, vol. 2 no. 1
Type: Research Article
ISSN: 1463-6697

Keywords

Article
Publication date: 3 June 2014

Torsten J. Gerpott and Nima Ahmadi

International roaming (IR) makes it possible to conveniently use mobile communication services (MCS) such as MI access abroad without switching providers, devices or subscriber…

Abstract

Purpose

International roaming (IR) makes it possible to conveniently use mobile communication services (MCS) such as MI access abroad without switching providers, devices or subscriber identity module (SIM) cards. To increase the intensity of competition in the intra-European Union market for IR services, customers will be enabled to buy IR voice and MI access services separately from their existing domestic MCS, as of July, 2014. Specifically, for separated international MI services providers can choose from three different charge types (use-dependent, flat and combination of flat and use-dependent). The purpose of this paper is to empirically examine customer preferences regarding these tariff types for separated international MI services.

Design/methodology/approach

Six research questions concerning antecedents of tariff type preferences for separated international MI access services are derived from a literature review. They are empirically addressed by analyzing survey responses obtained for a sample of 496 German-speaking MCS users.

Findings

Customers who actively seek for IR price information, consider IR services to be useful, exhibit high use intensities of MI services, do not restrict their MI usage when travelling abroad and tend to prefer flat rates to other pricing schemes. In contrast to these rather “active users”, customers favoring strictly use-dependent tariff plans exhibit significantly lower IR price information seeking efforts and comparatively low use intensities of MI services. Pricing schemes with MI allowances are especially liked by customers who are well-informed regarding and satisfied with IR prices, report above average use intensities of MI services, restrict their MI use abroad, are more likely to switch providers and use MCS mainly for job-related purposes.

Research limitations/implications

The study is based on a German-speaking sample, which deviates from the German adult population. Additionally, the analysis is limited to stated instead of behaviorally revealed preferences for cross-border MI tariff types. Price thresholds influencing whether a cross-border MI tariff is entered into a consumer’s relevant set of offerings are not examined.

Practical implications

The research suggests that mobile network operators are well-advised to offer a clearly structured menu of a limited number of tariffs directed to the three profiled customer segments. Notwithstanding the advantages of such a set of rate plans, international MI tariff schemes with a data volume allowance appear to be generally beneficial both from a provider and an end-customer perspective.

Originality/value

To date, little is known about customer preferences concerning the three rate plan categories and on antecedents of such preferences in the field of MI access abroad. The present study takes a first step to narrowing this knowledge gap.

Article
Publication date: 1 June 2003

Alexandre de Streel

The regulation of electronic communications has been recently reformed in Europe. One striking feature of the review was to base most of the economic regulation – the so‐called…

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Abstract

The regulation of electronic communications has been recently reformed in Europe. One striking feature of the review was to base most of the economic regulation – the so‐called significant market power regime – on antitrust principles. In particular, the regulated markets have to be defined according to competition law methodologies. This paper describes this approach and studies in detail the recently adopted Commission recommendation “on relevant markets susceptible to ex‐ante regulation”. The paper concludes with three policy recommendations. First, as regulation is more flexible and more complex, national regulators should co‐operate among themselves and national courts should only reform regulatory decisions in case of manifest error. Second, as regulation is not any more justified by the “original sin” of the previous monopolists, but by the inefficiency of antitrust to control market power, NRA should be cautious not to overly expand their intervention. Third, as ex ante market definitions are aligned on antirust principles, authorities should make sure that market definition is not a goal in itself but only a means to achieve the policy objectives of the sector‐specific regulation.

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