International roaming means that a subscriber uses their mobile telephone abroad, outside their operator’s network and area of coverage, that is to say when the subscriber is a visitor within another network abroad. Mobile operators conclude ‘roaming contracts’ between themselves in order to provide opportunities for making calls and receiving calls from abroad, and in this way the operators can charge the call on the ordinary telecom bill without the foreign operator needing to send any bill to the end user. Roaming contracts govern, among other things, the compensation the operators charge each other for allowing other operators’ foreign subscribers to use mobile telephones in their own network.
When Swedish customers use mobile telephones abroad, other prices and conditions apply than if the mobile telephone is used in the network at home in Sweden. For instance, a customer who is located abroad pays for a particular part of the cost for calls received, that is to say when the customer is located abroad and is called by someone else. Calls to one’s own voice mailbox from abroad are also charged as a call to Sweden and normally cost many times more than a domestic call.
Diagram 15 International roaming[28]
International roaming became technically possible in the early 1990s as of the launch of GSM though, for roaming to function in practice, economic agreements are required between the operators in the form of roaming contracts. Neither the establishment nor content of roaming contracts is currently governed by any national authorities, but the operators’ cooperating organisation, the GSM Association (GSMA), has produced rules of conduct for international roaming.
4.1 Current and future regulation within the EU
The European Commission has on several occasions urged mobile operators to voluntarily reduce roaming charges for voice calls, but without success.[29] In order to reduce roaming charges, the Commission therefore imposed a Regulation that was almost unanimously approved by the European Parliament in May 2007 and thereafter entered into force on 30 June 2007. In January 2008, the supervisory authorities of EU States confirmed that the Regulation has been implemented without problem throughout the EU.
Besides roaming charges, the Regulation governs the means of providing information about price details so that they can become more easily accessible and clearer for consumers. The operators are liable to provide free information about roaming charges through a text message when one enters another EU country, and customers can also receive free information about roaming charges via telephone or SMS.
The European Parliament[30] approved in April 2009 a broader and extended Regulation, which entered into force on 1 July 2009 and ceases on 30 June 2012. The latest Regulation also covers SMS and data.
4.1.1 The Eurotariff for voice calls is gradually reduced over a five-year period
According to the Regulation, roaming charges at the wholesale and end-user level may not exceed a certain price level, the ‘Eurotariff’. In this way the Eurotariff functions as a price ceiling under which the operators compete with each other for the most beneficial bundled prices. The Eurotariff has different prices for calls made and received respectively, and these prices are to reduce gradually according to Table 3.
Table C Eurotariff, planned reduction
|
Charge ceiling (euro per minute, excluding VAT) |
From 30 Aug 2007 |
From 30 Aug 2008 |
From 1 July 2009 |
From 1 July 2010 |
From 1 July 2011 |
|
Calls made from another EU country |
0.49 |
0.46 |
0.43 |
0.39 |
0.35 |
|
Calls received in another EU country |
0.24 |
0.22 |
0.19 |
0.15 |
0.11 |
According to the proposed Regulation, which it is assumed will enter into force on 1 July 2009, mobile operators should charge users for each second of the duration of a call, but it will continue to be allowed to have an overall charge for the first 30 seconds of the call, a ‘connection charge’. Today, users in the EU pay 25 per cent more than the minutes they actually use when they call and 19 per cent more when the receive calls.[31]
Nor will subscribers after 1 July 2010 have to pay to receive voice messages in their mailbox when they roam, as they cannot control the length of these messages in the same way as traditional calls.
4.1.2 Eurotariff for SMS introduced 2009
Roaming costs for SMS will be regulated as of and including 1 July 2009 so that EU citizens travelling in other EU countries should not need to pay more that 0.11 euro (excluding VAT) for each SMS they send, which can be compared with the current EU average of 0.28 euro per SMS. In the future it may also be free to receive SMS. SMS price regulation shall also be combined with a ceiling of 0.04 euro at operator level, that is to say for the charges that the operators charge each other when subscribers send SMS between their networks. In the same way as for the Eurotariff for voice traffic, the operators will be urged to compete with prices that lie under these ceilings.
4.1.3 Wholesale price ceiling introduced for data roaming 2009
Besides voice and SMS traffic, the European Commission also wishes to achieve more transparent pricing for surfing and downloading data with mobile telephones and computers via mobile networks abroad. The aim of this is to protect consumers who are used to having less expensive data services at home against shocking bills for roaming abroad, which can sometimes amount thousands of euro. In contrast to roaming call services and SMS roaming services, there is here some competitive pressure at the retail level, as roaming customers can gain access to data services in more ways than via mobile networks, for example via public wireless networks that are connected to the Internet.[32]
End users shall also, as regards data roaming charges, receive an automatic message with data roaming charges when they are located in a country with the Eurotariff. As of and including March 2010, consumers shall, according to the Regulation, be able to state in advance how high an amount their roaming bills may be before the service is disconnected.
According to the proposed Regulation, a ceiling will be introduced for the wholesale price for data roaming on 1 July 2009, and after that date the price ceiling for 1 Mbyte will be 1 euro. The price ceiling will then be reduced gradually to 0.5 euro per Mbyte of data on 1 July 2011. The price ceiling refers to wholesale prices, but the Commission hopes that this will also result in lower prices for the consumer.
4.2 Current situation in Sweden
PTS and the other European regulatory authorities in this area of regulation have compiled data quarterly on the assignment of the European Regulators Group (ERG). Some of the information collected is reported below at an aggregated level for the Swedish market, for the period second quarter 2007 to first quarter 2009.
The prices below are stated in euros (€) excluding VAT although the operators in the Swedish market charge their subscribers in Swedish kronor (SEK) including VAT. Variations in rates of exchange may thereby be one cause for prices having fluctuated.[33]
Diagram 16 Average price per minute excluding VAT
Before the Regulation entered into force, the average price for Swedish subscribers who made calls from countries subject to the Regulation was 0.60 euro per minute charged. The corresponding price for calls that were received within these countries was 0.36 euro. The development of this price is shown in Diagram 16. One year after the Regulation entered into force, these prices had reduced to 0.40 and 0.19 euro per minute charged respectively.
As regards calls that were made or received in countries outside Europe, Swedish subscribers were charged on average 1.39 and 0.92 euro respectively during the second quarter of 2007, that is to say before the Regulation was introduced in the European market. However, it is somewhat misleading to study the average prices for calls made and received in all countries outside the EU in one and the same call post, as there are great variations between the countries in rates of exchange and prices. The statistics also show higher average prices during the winter half-year than the summer, which can partly result from Swedes then to a greater extent visiting countries that are, from the perspective of roaming, more expensive, such as Thailand and Egypt. Notwithstanding this, we can see that average prices have reduced during the summer months over the last year, while they have increased slightly during the winter months. Even if the material is a little unclear, there is a sign that the Swedish operators charge more in the unregulated markets.
The average price per SMS sent has reduced from 0.22 to 0.17 euro between the second quarter of 2007 and the third quarter of 2008, but this increased then to 0.25 euro during the first quarter of 2009. The corresponding figures for countries outside the EU show a reduction from 0.32 to 0.25 euro and then an increase to 0.30 euro per SMS. The variation in average prices for SMS in the most recent quarters can to a large extent be explained by one stakeholder having included a large amount of telematics-related SMS at a very low tariff, which influenced the low average. The operation no longer forms part of that operator’s activities and consequently nor is it reported.
The average prices for transferred Mbyte of data have also reduced in recent years although there has not yet been any price regulation for mobile data traffic. The average price per Mbyte has reduced from 6.76 to 3.36 euro for mobile data traffic within the EU countries and from 13.56 to 11.34 euros for countries outside the EU.[34] Certain operators with networks in several countries charge a national tariff for mobile data traffic regardless of whether the user travels between countries where the operator is established. Such an example is the operator Tre, who in its network has a harmonised price for mobile data traffic in Sweden and Denmark, which in this context results in low average prices of 0.07 euro per Mbyte.
As regards the number of SMS sent and call minutes generated by Swedish subscribers abroad, the information base does not show any definite increases or reductions. The volume of traffic varies over the year as there are probably more Swedes who make use of roaming during the summer half-year. The volume of data traffic generated by roaming measured as Mbyte is, however, constantly increasing and there has been a sixfold increase from the last quarter of 2007 to the first quarter of 2009.
4.2.2 Swedish behavioural patterns
More than half of Swedes (61 per cent) who use mobile telephones for private purposes stated in the autumn of 2008 that they had travelled abroad during the last year. Most of these use the mobile telephone to make and receive calls, and even more usually send SMS (80 per cent, see Diagram 17). Every fourth Swede who travelled to a country within the EU uses MMS often or sometimes. Swedes use mobile telephones significantly more when they travel within the EU than outside, but 66 per cent claim that they have never surfed on the Internet, downloaded data or sent or received e-mail. This proportion is the same size for travellers within and outside Europe.
The result does not take into account whether the journey was made for business or vacation purposes, which may entail differences. Nor are travel patterns taken into account, for example the number of journeys in the last year or proportion of journeys within or outside the EU.
Diagram 17 Use of mobile telephone abroad
In the case of travel within the EU, mobile operators are liable to send an SMS to the owner of the mobile to inform them of the price that applies in that country. This is an obligation that rather many people are probably still unaware of or quite simply do not think about. In 2008, only 16 per cent said that they had received information about the price that applied abroad via an SMS from their operator, and the year before the corresponding figure was 9 per cent.[35]
Of the Swedish population that travelled abroad during the last year, approximately one-third studied the prices for various mobile operators in some way before they travelled (see Diagram 18).
Diagram 18 Awareness of tariffs for mobile telephone use abroad
4.3 Sweden compared with other countries
This section is based on data that has been gathered quarterly by PTS and the other European regulatory authorities.[36] The information gathered has been compiled regularly and published in reports from the ERG. The latest report was published in January 2009, and it is expected that the next report will be published in July 2009.
4.3.1 Number of traffic minutes
The ERG report states both the number of minutes that the operators within the EU charge with the Eurotariff and the actual number of minutes called. These volumes differ from each other as the end user is normally charged for more minutes than they call (see Diagram 16). The difference between charged and actual minutes is governed by the charging interval length – the longer the charging interval applied, the greater the gap between the number of minutes for which end users are charged and the number of actual call minutes. On average, the number of minutes charged for outgoing calls is 25 per cent more compared with the actual number. The corresponding figure for calls received is 19 per cent more minutes.
The information from Sweden shows that corresponding figures for the Swedish operators lie somewhat lower owing to the Swedish operators charging for 22 per cent more minutes than those that are actually called and 12 per cent more minutes than those that are received. This difference probably results from the Swedish operators having shorter charging intervals. The average price for calls charged according to the Eurotariff is 0.42 euro per minute charged and 0.51 per actual minute for calls that were made during the first quarter of 2009. The corresponding price for calls that were received was 0.18 euro per minute charged and 0.20 per actual minute.
Swedish operators have distinguished themselves by charging their customers the comparatively lowest average price per SMS. For Swedish consumers, during the third quarter of 2008 the average price for sending an SMS from countries that apply the Eurotariff was 0.17 euro and from other countries 0.25 euro. The average price for sending an SMS from countries with the Eurotariff was 0.28 euro.
Diagram 19 Average price for SMS from countries with Eurotariff
One of the
Swedish operators asked has a large volume of telematics-related
SMS that were charged at a very low rate. This may explain why Sweden had such
low average prices for SMS in the comparative statistics. However, the operator
in question divested its telematics operations to a
separate company during the second half-year of 2008, and according to the
information collected for the first quarter of 2009, the average price per SMS
sent rose to 0.25 euro.
ERG’s report[37] also shows that the Swedish operators are among those who charge most per SMS sent from other operators in the EU. They charge over 0.20 euro per SMS, while the average for the EU lies at 0.15 euro.
There is a great difference between the prices of various countries for data roaming. However, Sweden’s operators lie approximately around the average as regards the price per Mbyte for roaming with other operators outside their own group. The average revenue charged for a Mbyte of data has reduced by one-third, from over 6 euros during the last quarter of 2007 to less than 4 euros one year later. The average revenue per Mbyte transmitted may, however, be greater. Precisely as in the case of call traffic, the charging interval for data traffic is a key factor for understanding the operators’ total traffic revenues. A charging interval of 100 Kbits generates for example higher revenues than one for 1 Kbit.
However, Sweden and Denmark distinguish themselves with a low average price as regards roaming within the same operator group. This results from two of the operators applying a flat rate for data traffic, which also covers roaming within certain operators’ networks in other countries. This pricing results in high volumes but low revenues for international data roaming.
[28] Diagram from GSM Europe, www.roaming.gsmeurope.org
[29] See for example http://ec.Europe.eu/information_society/newsroom/cf/itemlongdetail.cfm?item_id=4242, http://Europe.eu/rapid/pressReleasesAction.do?reference=IP/07/870&format=HTML&aged=0&language=EN&guiLanguage=en, http://ec.Europe.eu/information_society/newsroom/cf/itemlongdetail.http://ec.Europe.eu/information_society/newsroom/cf/itemlongdetail.cfm?item_id=2971 and http://ec.Europe.eu/information_society/newsroom/cf/itemlongdetail.cfm?item_id=2560.
[30] At the time of writing, the Council of Ministers has not yet approved the Regulation, but this is planned to take place in June 2009.
[31] ERG (09) 01 International Roaming Report 090107.
[32] WLAN services are not as mobile as roaming services.
[33] For the period 2007 Q2 to 2008 Q3, the rate € 1= SEK 9.2525 was used when reporting to the ERG. For the period 2008 Q4 to 2009 Q1, the rate € 1 = SEK 9.45 was used.
[34] However, prices vary greatly depending upon which operator and price plan the consumer chooses. It is necessary in most cases to buy special add-on packets adapted for foreign traffic in order to benefit from lower roaming prices from the Swedish operators.
[35] Subject to reservation for a direct comparison and that this response alternative was reworded slightly.
[36] ERG (09) 01 International Roaming Report 090107, published on 12 January 2009. A new report will be published in July 2009 on ERG’s website at www.erg.eu.int.
[37] ERG (09) 01 International Roaming Report 090107, Diagram 11.