For Official Use DSTI/ICCP/CISP(2014)6/REV2

Organisation de Coopération et de Développement Économiques Organisation for Economic Co-operation and Development 04-Sep-2015 ______English - Or. English DIRECTORATE FOR SCIENCE, TECHNOLOGY AND INNOVATION COMMITTEE ON DIGITAL ECONOMY POLICY For Official Use DSTI/ICCP/CISP(2014)6/REV2

Cancels & replaces the same document of 18 May 2015

Working Party on Communication Infrastructures and Services Policy

MONITORING THE COUNCIL RECOMMENDATION ON INTERNATIONAL MOBILE ROAMING SERVICES

This Cancel and Replace has been done to incorporate footnote 7. Nothing else has been amended from the original version. This document is now superseded by DSTI/ICCP/CISP(2014)6/REV3.

Sam Paltridge, Tel: +33 1 45 24 93 79, E-mail: [email protected]

English English JT03381266

Complete document available on OLIS in its original format -

This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of English Or. international frontiers and boundaries and to the name of any territory, city or area.

DSTI/ICCP/CISP(2014)6/REV2

Background

The Council adopted, at its 1256 Session on 16 February 2012, a Recommendation on international mobile roaming (the Recommendation) [C(2012)7 )]. The Recommendation provides a set of policy principles to ensure effective competition, consumer awareness and protection, and a fair price level in international mobile roaming services and requested the Committee on Digital Economy Policy (CDEP, former Committee for Information, Computer and Communications Policy) to report back to Council within three years to assess progress in this area and monitor implementation of the Recommendation. The review commenced in 2014 and was completed in 2015. [At its June 2015 meeting, the CDEP approved the report set out in the Annex of this document and agreed to its transmission to the Council for declassification [DSTI/ICCP/CISP(2012)6/REV2].]

The background report for the review was discussed by the Working Party on Communication Infrastructures and Services Policy on 9-10 December 2014. The Working Party also provided further information on Member country initiatives on roaming as well as views on the continued relevance of the Council Recommendation and whether further action was needed in this area via a questionnaire (Annex 2).

Summary and Conclusions

The results of the review are presented in the background report [DSTI/ICCP/CISP(2012)6/REV2] and in its Annex 2 which provides a summary of the responses received to the questionnaire. The report concludes that OECD countries which have adopted or are adapting policies to ensure effective competition or, in its absence, regulation addressing challenges in this area have found the Recommendation to be timely, useful and that it is still relevant. The large majority of countries explicitly referred to the positive influence of the Recommendation, which they used as a reference in developing practical approaches to increasing competition or pro-competitive regulation.

Significant progress has been made in reducing international mobile roaming prices since 2012, either by ensuring effective competition or, in its absence, applying regulation. Of note, since the adoption of the Council Recommendation are offers from some mobile network operators of 'Roam Like at Home' (RLAH) plans which do not require purchasing 'add-ons' and rather use the subscriber's domestic mobile package. This could, if such offers develop more widely, help in resolving the problem of high mobile roaming prices. These offers are more prevalent in markets with four rather than three mobile network operators (MNOs), which is likely the result of the additional competition provided by more players. Many mobile network operators have introduced specific roaming packages as 'add-ons' to existing subscriber contracts, in particular for mobile data roaming, but prices still remain high and industry consolidation, in some countries, may reduce the competitive discipline from having a greater number of mobile network operators.

In responding to the questionnaire, many European Union member states noted that the European Union roaming regulations had gone significantly further than the OECD Recommendation. However, many European Union countries also noted that for non-EU roaming destinations the OECD Recommendation was still valid. Some countries view that market forces, including technological solutions, will over time reduce high international roaming prices.

Several new bilateral agreements, which have been concluded or are in the process of finalisation among OECD and non-OECD countries should lead to price reductions and also provide a paradigm for other countries to follow suit where there is insufficient competition. Some of these bilateral agreements have also been undertaken between countries with free trade arrangements and could provide a framework to follow for other regions with free trade arrangements. This could help alleviate some concerns that

2 DSTI/ICCP/CISP(2014)6/REV2 bilateral or regional agreements may have to be opened up to third parties as part of most favoured nation obligations.

Finally, the review has demonstrated that there were two main views on the need for a modification or further monitoring of the Recommendation. Some countries believe that the Recommendation has or is meeting its objective and does not require modifications. Others, mostly but not entirely members of the European Union, believe that if any modifications were made, they would either involve further clarification or be in the form of an update subsequent to any changes made by the European Union to ensure harmonisation. Most countries believe further monitoring to be beneficial though some of these feel that this could be more effectively done through the biennial Digital Economy Outlook. For those that would like further developments to be reported back to Council they differ on the appropriate period though the majority felt two to three years to be suitable.

Proposed Action

In the light of above, the CDEP could:

a) agree to the transmission of this report to the Council

b) propose that the CDEP recommend to the Council to approve the inclusion of a question on progress on International mobile roaming in the 2016 questionnaire for the 2017 Digital Economy Outlook. This would invite member countries to indicate if any modifications to the Council recommendation were required and if so what they should be. In addition, the Committee should use the Digital Economy Outlook to provide an update on pricing trends and other relevant developments going forward.

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TABLE OF CONTENTS

Main Points ...... 5 Introduction ...... 7 Recent Developments in IMR markets ...... 8 Prices ...... 10 Tariffs ...... 14 Roam Like at Home Pricing ...... 16 Price trends for data ...... 20 Improving awareness and transparency ...... 29 Wholesale and retail price regulation ...... 33 Assessment of costs and benefits ...... 36 Are the dynamics of the international roaming market changing? ...... 37 ANNEX I. RECOMMENDATION OF THE COUNCIL ON INTERNATIONAL MOBILE ROAMING SERVICES ...... 42 ANNEX II. QUESTIONNAIRE REGARDING THE IMPLEMENTATION OF THE COUNCIL RECOMMENDATION ON INTERNATIONAL MOBILE ROAMING SERVICES ...... 46

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MONITORING THE COUNCIL RECOMMENDATION ON INTERNATIONAL MOBILE ROAMING SERVICES1

Main Points

The OECD Council adopted a Recommendation on international mobile roaming in 2012 and requested the Committee on Digital Economy Policy to report back to Council within three years to assess progress in this area and monitor implementation of the Recommendation. The objective of this document is to provide an overview of progress made in the implementation of the Recommendation in Member countries and to determine whether any further action is necessary in this area. The document was discussed by the Working Party on Communication Infrastructures and Services Policy on 9-10 December 2014. The Working Party also provided written comments on the report and responded to a questionnaire aimed at providing further information on Member country initiatives on roaming as well as views on the continued relevance of the Council Recommendation and whether further action was needed in this area (Annex 2). This document takes into account views expressed by the Working Party.

Significant progress has been made in reducing international mobile roaming prices since 2012, either by ensuring effective competition or, in its absence, applying regulation. Of note, since the adoption of the Council Recommendation are offers from some mobile network operators of 'Roam Like at Home' (RLAH) plans which do not require purchasing 'add-ons' and rather use the subscriber's domestic mobile package. This could, if such offers develop more widely, help in resolving the problem of high mobile roaming prices. These offers are more prevalent in markets with four rather than three mobile network operators (MNOs), which is likely the result of the additional competition provided by more players. Since 2012, examples in countries with four MNOs include those in , , Japan, , , and the United States, while , and were exceptions with offers in markets with three players.

Many mobile network operators have introduced specific roaming packages as 'add-ons' to existing subscriber contracts, in particular for mobile data roaming but prices still remain high and industry consolidation, in some countries, may reduce the competitive discipline from having additional mobile network operators. Competition provided by more MNOs is also key to a competitive contribution from Mobile Virtual Network Operators (MVNOs). Since 2014, some MVNOs in countries such as the , the United Kingdom and the United States have begun to offer RLAH offers covering continents – Europe, in the case of the Netherlands, and most of North and South America in the case of the United States, as well as one MVNO data RLAH offer announced in April 2015, for over 120 countries for users travelling from the United States

In the absence of sufficient competition, however, authorities have applied regulation in the European Union and European Economic Area. The European Union (EU) regulatory initiatives in the international

1 This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. The statistical data for are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

5 DSTI/ICCP/CISP(2014)6/REV2 mobile roaming market have provided a benchmark for many countries outside the EU, both OECD and non-OECD and has shown the role that regional bodies can play in significantly reducing prices and creating competition in IMR services. Outside of the EU there have been few specific regulatory initiatives to reduce roaming prices to competitive levels, though a consideration of competition dynamics is inherent in any review of industry consolidation or the introduction of new MNOs. In responding to the questionnaire as to the continued relevance of the Council Recommendation many European Union and European Economic Area countries noted that the European Union Regulations had gone significantly further than the OECD Recommendation. However, many also noted that for non-EU roaming destinations the Recommendation was still valid. Some countries view that market forces, including technological solutions, will over time reduce high international roaming prices.

Several new bilateral agreements which have been concluded or are in the process of finalisation among OECD countries and non-OECD countries should lead to price reduction and also provide a paradigm for other countries to follow suit where there is insufficient competition. Some of these bilaterals have also been undertaken between countries with free trade arrangements and could provide a framework to follow for other regions with free trade arrangements and could help alleviate some concerns that bilateral or regional agreements may have to be opened up to third parties as part of most favoured nation obligations.

Since 2012 when the Council Recommendation was adopted transparency of roaming prices has improved considerably resulting from regulatory initiatives and increased sensitivity of mobile network operators to the problem of bill shock. In addition, measures to protect consumers when roaming and increase their awareness of high roaming prices have also helped reduce bill shock.

While there has been increased recognition of the need for regional and bilateral initiatives to lower high roaming prices, there is also acknowledgement that it is necessary to create competition in the international mobile roaming market (IMR), which can be sustained without recourse to continuing and intrusive regulation. Structural measures, as is the case of the EU Regulation III, maintaining a sufficient number of players to enable wholesale competition for MVNOs and technological change, may help such competition emerge and may provide the basis to reduce the need for regulation in the future. Obtaining further transparency on inter-operator tariffs and the benefits of doing so would also facilitate discussions on how to move forward in creating further IMR market competition.

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Introduction

1. The OECD Council adopted Recommendation C(2012)7 on international mobile roaming in February 2012 (see Annex I) and instructed the Committee on Digital Economy Policy (then the Committee for Information, Computer and Communications Policy) to report to Council within three years of its adoption to monitor implementation of the Recommendation and to assess progress made in this area. The purpose of this document is to provide an overview of progress made that will serve as background for gathering Members' input on the implementation of the Recommendation in their respective countries and for determining whether any further action is necessary.

2. The Council Recommendation was based on several reports undertaken by the CISP over 2009- 2010 which examined and analysed international mobile roaming (IMR) service market developments, retail pricing and, where available, wholesale prices, and international mobile data roaming. Two reports benchmarked retail and wholesale charges for voice roaming services and SMS and data roaming services.2 They concluded that price levels for international mobile roaming services were unreasonably high.

3. The causes for high roaming prices included the non-competitive characteristics of the roaming market which led to high wholesale charges and, in turn, high roaming retail charges. For example, in some cases the wholesale rates charged by foreign operators could account for up to three quarters of the retail rate. Other factors leading to high retail roaming prices included the fact that consumers did not take into account roaming services when choosing a bundled mobile offer, lack of market contestability and low consumer awareness of roaming prices.

4. Although substitutes have developed many require that subscribers change their mobile number, or do not provide mobility (e.g. they require the use of Wi-Fi for voice in the event a number can be forwarded). The implications of taxation on the cost of roaming was also highlighted resulting, in some cases, from instances of probable double taxation, including authorities from some jurisdictions taxing the tax applied by authorities in foreign countries. A follow-up report provided an analysis of options available to policy makers in order to lower prices and increase transparency for end-users and put forward a set of recommendations that could be implemented by governments, should it be necessary, after assessing the specific situation in a given country.3

5. The Council Recommendation put forward a set of measures (Box 1) aimed at ensuring effective competition, consumer awareness and protection and a fair price level in international mobile roaming service markets.

2 DSTI/ICCP/CISP(2009)8/FINAL, International Mobile Roaming Charging in the OECD Area, December 2009; DSTI/ICCP/CISP(2010)12/FINAL, International Mobile Data Roaming, May 2011. 3 DSTI/ICCP/CISP(2009)12/FINAL, International Mobile Roaming Services: Analysis and Policy Recommendations, March 2010;

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Box 1. Council Recommendation: Set of Measures for establishing or reviewing roaming services policies

 Promoting transparent information on roaming services  Promoting awareness of roaming prices and substitutes  Facilitating trans-national networks and alliances  Transparency of Inter-Operator Tariffs  Facilitating access to wholesale mobile services on local terms and conditions

 Wholesale price regulation  Retail price regulation  Assessment of costs and benefits

Recent Developments in IMR markets

6. In the period since the Council Recommendation was adopted in 2012 there have been a marked reduction in international roaming prices and a range of new service offers, in particular for mobile data roaming, by mobile network operators (MNOs) that have aimed at responding to the demand of roaming customers. Mobile subscribers, to a large extent, have become more aware of high roaming prices and, therefore, more cautious when roaming adjusting their consumption to limit expenditures and increasingly following procedures to limit mobile data consumption. Nevertheless, there still remain a number of cases of "bill shock". Increased awareness of problems raised by high roaming prices has also stimulated further action by the relevant authorities and engendered wider public discussion of the issue. In turn, this has placed pressure on MNOs to reduce prices. Transparency of roaming prices has also improved considerably over the last few years although there is room for improvement.

7. Despite the reduction in prices, however, roaming prices in many countries are far from competitive. In many regions the perception is that price reductions have been insufficient and this has been reinforced by the fact that domestic mobile (and fixed) prices have fallen considerably in competitive markets. In several countries, a number of mobile network operators are offering domestic monthly packages which include unlimited calls to fixed and mobile phones, unlimited SMS and generous mobile data packages. These price reductions in national mobile markets have led to considerable changes in consumption patterns for services.

8. Mobile data traffic already accounts for a large majority of traffic in terms of volume. Estimates for the United States, for example, indicate that mobile data traffic accounted for 99.1 percent of total national mobile traffic in volume terms in 2012 and will increase to 99.5 percent by 2016.4 The growth in the use of mobile data for the European Union states and countries of the European Economic Area (EEA) is shown here (Figure 1). Recent estimates of global traffic indicate that data traffic almost doubled between 2012 and 2013 while the increase in voice traffic during the same period was two percent.5 Projections by Cisco, which monitors such traffic, are for a compound growth in mobile devices over 2013-18 of 11.6 percent in North America and 9.7 percent in Western Europe resulting in a 7.6 and 7.5

4 Analysys-Mason, http://www.analysysmason.com/About-Us/News/Insight/USA-voice-data-Oct2013/ 5 Ericsson Mobility Report, http://www.ericsson.com/res/docs/2013/emr-august-2013.pdf

8 DSTI/ICCP/CISP(2014)6/REV2 fold increase in mobile data traffic respectively in those regions. The average mobile traffic per user is also predicted by Cisco to increase tenfold over 2013-18.6

9. This significant shift toward the use of mobile data services poses a further challenge to international mobile roaming policy. The significant reductions in domestic price for mobile data have not been reflected in international mobile data roaming prices even though it is recognised that roaming implies some specific costs different from domestic services. .At the same time, users, whose demand for mobile data services has increased, do not always fully adjust their consumption of mobile data roaming services when roaming to take into account higher prices.

10. Growth in mobile data is driven by the availability of higher speeds as subscribers adopt smartphones and move to connections. In turn, higher speeds have led to a rapid development and diffusion of a range of applications for use on mobile devices. Many of these applications have become commonplace and are used on a daily basis. There is a demand by international travelers to continue using these applications as they roam in other countries. In many cases, access to mobile data is necessary when roaming, for example, to check email, obtain information on transport and reservations, online banking and, increasingly, will be necessary for mobile payments. Many mobile applications also remain active when roaming as a result of automatic updates, obtaining location data, and so forth. In so doing they generate, unknown to many subscribers, more mobile data traffic adding to the subscriber's bill.

Figure 1. Volumes of retail data in Q1 2014, prepaid + postpaid, Index (Q1 2008 = 100)

Source: International roaming BEREC benchmark data report April 2013 – September 2013, BoR(14)16, http://berec.europa.eu/eng/document_register/subject_matter/berec/reports/4246-international- roaming-berec-benchmark-data-report-april-2013- 8211-september-2013 Note: see footnote 7

6 See, Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2013–2018, http://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index- vni/white_paper_c11-520862.html

7 The information in this document with reference to « » relates to the southern part of the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. recognizes the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of United Nations, Turkey shall preserve its position concerning the “Cyprus issue”.

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Prices

11. Since the adoption of the Council Recommendation the European Union members, including the European Economic Area have made significant reductions in international mobile roaming (IMR) prices, both wholesale and retail. Wholesale price data are not available across the OECD to judge whether similar reductions have taken place, however, while retail prices may have declined in other countries the depth of price cuts has not been as significant as in in the EU/EEA region, except where ‘Roam Like at Home’ (RLAH) offers have been introduced by some MNOs. The evident need for regional co-operation on this issue led the European Commission to directly intervene in this area working closely with the national regulatory authorities of Member States starting in 2007 with the adoption of a Roaming Regulation, which was subsequently amended in 2009 and further amended in 2012. 8 The European Union, in its third Roaming Regulation, agreed that the average mobile termination rate for mobile network operators provided the most appropriate benchmark for wholesale roaming call origination and termination on mobile networks. The glide path followed by the European Union in reducing both wholesale and retail voice roaming charges is shown here (Figure 2). The wholesale caps imposed on all roaming services by the different European Union Roaming Regulations are also set out (Table 1). Benchmarking by BEREC (as of March 2014) indicate that retail prices for voice services are close to the regulated caps despite a significant margin between the retail caps and wholesale prices.9 The EEA average retail price for voice (making calls) is 86 percent of the cap whereas the average EEA wholesale price is 60 percent of the wholesale cap for voice. There is a much larger margin between the regulated caps for mobile data services and the data wholesale caps. This is viewed by some as the beginning of wholesale competition in the EU/EEA market.

12. Despite these extensive mobile roaming price reductions in the European Union since 2007, surveys indicate that prices are viewed as too high by many European subscribers. For example, a European Commission survey in early 2014 found that 94 percent travelling outside their home country limit their use of services, and approximately 25 percent of subscribers switch off their mobiles when travelling.10

8 Regulation (EC) no 717/2007 of the European Parliament and of the Council of 27 June 2007; Regulation (EC) No 544/2009 of the European Parliament and of the Council of 18 June 2009; Regulation (EC) No 531/2012 of the European Parliament and of the Council of 13 June 2012. 9 International roaming BEREC benchmark data report April 2013 – September 2013, BoR(14)16, http://berec.europa.eu/eng/document_register/subject_matter/berec/reports/4246-international- roaming-berec- benchmark-data-report-april-2013-8211-september-2013 10 See, http://europa.eu/rapid/press-release_IP-14-152_en.htm

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Figure 2. European Union glide path, wholesale and retail roaming voice charges

Source: Extracted from BEREC, International Roaming BEREC Benchmark Data Reports, http://berec.europa.eu/eng/document_register/subject_matter/berec/reports/

13. As the OECD recognised in its earlier document the international roaming market is not contestable in that the current structure of the international mobile roaming market does not lend itself to the creation of long-lasting competition.11 This is because IMR services are part of the bundle offered by the mobile operator and the primary consideration of a subscriber is the relative cost of the domestic package. In this context the European Commission considered that structural measures would be required for competition to emerge. Without such measures the EU considered that regulatory price caps would remain necessary. The third Roaming Regulation, adopted in 2012 by the European Union, was significant since it recognised that structural measures may be required in the IMR market to create meaningful competition and avoid the need for ongoing price regulation.

14. The key changes, which became effective in the European Union, from 1 July 2014, provide subscribers with an option to find an alternative roaming provider while still keeping their home mobile number - essentially decoupling home services from roaming services. In addition, there is a requirement that subscribers should not be prevented from accessing data roaming directly from an alternative provider when roaming in a visited country (referred to as Local Break-out) without the need to change SIM cards. Moreover, MVNOs and resellers can have regulated access to MNO networks throughout the EU/EEA region. By decoupling the roaming data market from the home provider the aim is to generate new service providers who will provide mobile data access, and other mobile roaming services, at competitive prices. However, in September 2013, the European Commission tabled legislative proposals on international roaming as part of its “Connected Continent” legislative package whereby mobile operators would be able to obtain an exemption from the decoupling measures under certain circumstances, mainly related to the phased introduction of RLAH tariffs. On 3rd April 2014, the European Parliament adopted its first-reading resolution on the "Connected Continent" proposal. This Resolution includes eliminating roaming surcharges by 15 December 2015. According to the European Parliament's first-reading Resolution, as of that date, any roaming service offered by a mobile network operator would not be charged more when roaming within the European Union area than on the mobile operator's own network, provided the consumption of roaming services does not exceed fair use criteria to prevent anomalous or abusive usage of retail roaming services.

11 See, DSTI/ICCP/CISP(2009)12/FINAL.

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Beyond fair use limits, operators could charge the ‘eurotariff’ defined in the 2012 European Union Roaming Regulation currently in force. The European Parliament's first reading proposal would thereby create a RLAH market structure. The concept of RLAH is being defined with reference to fair use criteria.

15. On 4th March 2015, the Council of the European Union adopted a negotiation mandate for the Council Presidency on the Commission's "Connected Continent" proposal. The Council Presidency mandate involves a transitional period whereby a basic volume of roaming consumption would be priced to the consumer at domestic level (i.e. with no roaming surcharge), and a small retail surcharge, not higher than the current wholesale roaming cap level, would be applied beyond the basic volume. According to the Council proposal, this transitional regime would apply until wholesale roaming prices fall to a level that allows the provision of roaming services at domestic level, either through market forces or another regulatory intervention after the necessary wholesale review has been conducted. Since the end of March 2015, starting from their respective proposals, the European Parliament and the Council have been negotiating in order to elaborate a common text for the “Connected Continent” legislative package.

16. It is difficult to predict the outcome of the structural measures, in particular given the continued legislative uncertainty over the two RLAH proposals referred to above and whether they will in fact be passed out or become redundant under a new roaming settlement, but, if they were to result in increased competition and lower prices in the absence of RLAH it would be likely that MNOs would significantly reduce their prices in order to maintain their existing subscribers as roaming clients. The development of resellers or regional MVNOs may depend on the volume of roaming traffic in a particular country and the extent to which MNOs reduce their roaming charges below regulated prices. In order to create a separate IMR market, regulatory initiatives need to be implemented and, while wide-ranging, in the long term they can ensure that the IMR market will no longer be subject to regulation. As an example, the 2012 European Union Regulation requires MNOs to provide wholesale access and to publish a reference offer, including a service level agreement with respect to IMR markets. It is also envisaged that MNOs provide the authentication and billing information necessary to provide retail roaming services (as part of their service level agreement) to MVNOs. In Mexico, mobile operators designated as having preponderant market power are obliged to provide MVNOs with wholesale access to international roaming services.

Table 1. European Union wholesale caps for mobile roaming within EU & EEA (Euros)

Effective 30.07.2007 30.08.2007 01.07.2009 01.07.2010 01.07.2011 01.07.2012 01.07.2013 01.07.2014 from Outgoing 0.3 0.28 0.26 0.22 0.18 0.14 0.10 0.05 calls to any EU/EEA number Inbound Same as termination of a non-roaming call on the visited network calls Outgoing Not regulated 0.04 0.03 0.02 SMS to any EU/EEA number Incoming Not regulated Free SMS from any number Data Not regulated 1.0 0.8 0.5 0.25 0.15 0.05 transfer Note: EU average termination rate was Euro 0.0357 per minute in 2012; EU average termination rate was Euro 0.032 per SMS in 2012 Source: European Commission Digital Agenda for Europe – Telecom rules, (http://ec.europa.eu/digital- agenda/en/telecoms-rules)

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17. The European Union's wide ranging initiatives on mobile roaming prices are unique within the OECD area and globally. There have been, nevertheless, other initiatives aimed at reducing prices. Australia and New Zealand agreed in February 2013 to regulate high trans-Tasman mobile roaming rates through a bilateral agreement and released a joint report which recommended that the regulators in both countries be provided with sufficient powers allowing them to co-operate and to intervene in the IMR market. These powers would allow the regulators to apply price caps on wholesale and retail roaming charges and a regulated terms of access and mobile-local access services. 12 The agreement requires legislative change which is presently underway.13 Legislation would allow the national regulatory bodies to impose retail and wholesale price caps on MNOs and require wholesale access obligations. The threat of future action led to some adjustments in roaming prices in both countries by the main mobile operators. For example, Telstra (Australia) now offers a range of mobile roaming data bundles to meet customer demand and New Zealand provides an offer which allows a subscriber to use their existing plans voice, text and data at domestic prices for an additional charge of USD 3.88 (NZD 5) per day.

18. Other bilateral agreements with OECD members include an agreement in December 2012 between Israel and , and a Memorandum of Understanding between Israel and also in December 2012. Both agreements cover prices and will use the European Union tariffs as 'benchmark rates' for ongoing negotiations. The agreements are still under negotiation and have yet to effect prices. Israel is also examining structural solutions to reduce roaming charges. In September 2014, the Israeli Ministry of Communications announced a consultation procedure proposing that it would allow mobile network operators, as well as other telecommunication service providers, to offer roaming as a separate service to the customer of another mobile subscriber without the need to change the number of the subscriber.14 This would be similar to the decoupling requirement adopted by the European Union. The Ministry also proposes to require one second billing for voice and 1KB billing for mobile data as a way to reduce prices.15 In 2014, the Norwegian mobile operators signed an MoU with Russia with the aim to reduce roaming charges between the two countries. Denmark and China have signed a bilateral agreement aimed at reducing roaming prices between the two countries, as have Russia and Argentina.16 Japan and Australia have also begun discussions aimed at reducing roaming prices between the two countries.17

19. Chile and Argentina are working towards eliminating roaming charges between the two countries following an agreement by the Presidents of these countries taken in May 2014. Chile is also discussing with Peru the possibility of reducing roaming charges between the two countries. Chile has also required

12 Trans-Tasman roaming, Final Report, February 2013, http://www.dbcde.gov.au/__data/assets/pdf_file/0003/161274/TTR_Final_Report.pdf 13 The Australian Parliament is considering the Legislation Amendment (International Mobile Roaming) Bill 2014 (the IMR Bill) which, if approved, would empower the Australian Competition and Consumer Commission to, where necessary and where bilateral agreements have been entered into, take coordinated action pricing action with other countries. This need for this draft legislation is being considered in the context of recent market trends, with an initial focus on the Trans-Tasman roaming environment. 14 See, http://www.moc.gov.il/sip_storage/FILES/5/3765.pdf and http://www.globes.co.il/en/article-overseas- roaming-reform-in-6-months-1000963374 15 See, http://www.globes.co.il/en/article-overseas-roaming-reform-in-6-months-1000963374 16 The Danish Ministry of Business and Growth, “China and Denmark sign agreement on lower mobile prices”, 8 April 2014. https://www.evm.dk/english/news/2014/08-10-14-china-and-denmark-sign-agreement-on-lower- mobile-prices and Ministry of Telecom and Mass Communications of the Russian Federation, “Russia and Argentina Signed Memorandum on Decrease of Prices in Roaming”, 21 April 2015. http://minsvyaz.ru/en/events/33066/ 17 Adam Bender, “Australia and Japan talk mobile roaming at first ICT summit”, Computerworld, 16 February 2015

13 DSTI/ICCP/CISP(2014)6/REV2 that voice roaming must be billed on a per second basis and data roaming per 1KB.18 Colombia has entered into an agreement with Peru with the aim to reduce roaming prices and is in the process of negotiating a regional agreement with Mexico, Peru and Chile aimed, inter alia, to promote the contestability of the international mobile roaming market in the region and reduce wholesale roaming charges.

20. The Colombian regulator, CRC, has indicated that as a result of measures taken to protect consumers (see section below) roaming prices declined between 2013-14, on average, by 26 percent for outgoing voice calls, 31 percent for incoming voice calls and 52 percent for mobile data services (Figure 3).19 Chile is also discussing with Peru the possibility of reducing roaming charges between the two countries. has engaged in talks to reduce roaming tariffs with the Russian Federation and the Republic of , resulting in tariff reductions with the Russian Federation between 15–25 percent and tariff reductions with the Republic of Belarus between 35–55 percent.20

Figure 3. Colombia, reduction in international roaming

Tariffs

21. Countries outside the OECD area have also been active in trying to reduce international mobile roaming prices. The Gulf Cooperation Council (GCC) had implemented an agreement using price caps with price reductions staggered over 2010 and 2011. 21 The agreement, which was fully implemented by February 2012 and which only covered outgoing roaming calls, resulted in price reductions of up to 70 percent. The GCC Roaming Working Group is proposing to extend the existing regulation to cover

18 Resolution No. 3685 of 2012, issued by the Department of Telecommunications of Chile (SUBTEL) 19 Comisión de Regulación de Comunicacione, http://www.crcom.gov.co/?idcategoria=66089 20 The following agreements were signed: Protocol of Co-operation on International Roaming Tariffs Reduction between the Republic of Latvia and the Russian Federation (25.04.2012.); and Protocol of Co-operation between the Ministry of Transport of the Republic of Latvia and the Ministry of Communications and Informatization of the Republic of Belarus on International Roaming Tariffs Reduction (06.12.2012.) 21 The six GCC countries entered into a free trade agreement in 1981 which calls for greater integration of telecommunications and improving economic efficiency in this area.

14 DSTI/ICCP/CISP(2014)6/REV2 incoming calls, SMS and mobile data roaming. 22 The proposed changes would also cover wholesale and retail roaming prices. In addition, it is proposed to require per second billing for outgoing and received calls after a flag-fall charge of 30 seconds.

22. Wholesale and retail roaming rates between Singapore and Malaysia have been reduced by up to 30% for voice calls and up to 50% for SMS over two phases starting 1 May 2011. Brunei Darussalam and Singapore also agreed, in June 2012, to reduce roaming rates for SMS and data roaming charges and further reduce the price of voice calls by the first quarter of 2013. As part of the agreement both the wholesale inter-operator wholesale charges and retail charges were reviewed.23 A further agreement has been reached to reduce prices form the 1st January 2015 up to 10 percent for voice and up to 50 percent for messaging, video calls and data. The arrangement is covered under the ASEAN Framework Agreement for Services (AFAS). The AFAS is a regional free trade agreement notified under and likely consistent with GATS Article 5, which should cover any most favoured nation departure. Similar to the foregoing, Singapore and Malaysia, following their 2011 bilateral agreement reduced roaming voice prices between 30 to 50 percent between 2011-2012.24 In the context of the Trans-Pacific Partner Agreement the nine countries are also addressing the high cost of international mobile roaming.25

23. In September 2014, Turkey, , , Kosovo*26, , and agreed to examine how to create a roaming free zone covering all countries. In advance, Serbia, Montenegro, Bosnia and Herzegovina and the Former Yugoslav Republic of Macedonia have signed an agreement on lowering mobile roaming charges with a view to lowering prices to the same level as the European Union within three years.27 This agreement sets maximum wholesale and retail prices of roaming services over three periods: from 30 June 2015 to 30 June 2016, from 1 July 2016 to 30 June 2017 and from 1 July 2017 onwards. From 30 June 2015, the maximum retail price of an outgoing call will be EUR 0.29/minute (a 50% reduction on average prices); incoming calls will be priced at EUR 0.08/minute (a 70% reduction); text messages will be priced at EUR 0.09 and data services EUR 0.70/MB (respectively a 50% and 70% decline).

24. In Africa, the Economic Community for the West African States (ECOWAS) has improved regional roaming arrangements, through intra-operator agreements. The agreements allow roaming subscribers to receive calls, without additional charges, when roaming and pay local rates for outgoing calls.28 The arrangements, however, are not generalised in that they only cover specific networks and do

22 See, TRA releases consultation on international mobile roaming for the GCC, 7 September 2014, http://www.tra.gov.ae/consultations.html 23 The Info-communications Development Authority of Singapore and the Authority for Info-communications Technology Industry of Brunei Darussalam were charged with examining roaming charges between the two countries and reaching an agreement with the operators on lower charges. 24 See, Infocomm Development authority of Singapore, https://www.ida.gov.sg/About-Us/Newsroom/Media- Releases/2011/Singapore-and-Malaysia-to-Reduce-Mobile-Roaming-Rates 25 The countries are: Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and the United States. 26 *This designation is without prejudice to positions on status, and is in line with United Nations Security Council Resolution 1244/99 and the Opinion of the International Court of Justice on Kosovo’s declaration of independence. 27 Deal On Reduction Of Roaming Fees Signed, 29 September, 2014, see , and http://www.balkans.com/open- news.php?uniquenumber=201919 28 International Telecommunication Union, West African Common Market Project: Harmonization of Policies Governing the ICT Market in the UEMOA-ECOWAS Space Interconnection, 2004, http://www.itu.int/ITU- D/treg/projects/itu-/Ghana/modules/FinalDocuments/Interconnexion.pdf

15 DSTI/ICCP/CISP(2014)6/REV2 not apply completely to all ECOWAS countries. The East Africa Community29 (EAC) plans to eliminate roaming charges for the region by adopting a 'Roam Like at Home' framework and the Southern Africa Development Community (SADC) Ministers agreed in November 2014 that the region should adopt a " Roam Like at Home framework and approved a glide path to reduce retail and wholesale roaming tariffs for the region.30

25. The increased business and consumer awareness of high international roaming prices, together with the public debate this has engendered, and a number of high profile cases of 'bill shock' have played a role in leading MNOs to reduce their prices. In addition, downward pressure on IMR prices has come from subscribers demanding more reasonable roaming data prices and from roaming substitutes that provide some competition especially in the roaming data market. While some attribute the improved offers to operators, acting ahead of regulatory intervention, it is nevertheless the case that some offers have gone far beyond those suggested by authorities. In the European Union area, for example, a number of European MNOs have gone beyond the requirements of the European Union Roaming Regulations. Examples include offers that allow subscribers to use their mobile services in a number of visited countries without any extra charges i.e. ‘Roam Like at Home’ (subject to a limited time frame).

26. Since first seen, in 2013, the key difference with RLAH offers, as opposed to others, is that they involve services being included in a customers bundle without additional charges or being necessarily “on- net” with foreign MNOs sharing the same ownership. While there had been some earlier examples of such offers in Africa, the Middle East and Europe they were limited to on-net roaming or required additional charges.

27. A recent OECD report has attributed these developments to more competition existing in markets with four or more MNOs as opposed to those with three MNOs where, to date they are much less prevalent.31 This includes countries that have increased the number of MNOs from three to four and countries that have rejected mergers or other developments that would have resulted in a reduction of players from four to three.

Roam like at home pricing

28. At the time of the OECD Council Recommendation on International Mobile Roaming, in February 2012, no mobile operator in an OECD country included a 'Roam Like at Home' service as an integral part of their offer. While similar services were on offer consumers needed to purchase these roaming services at an additional charge to the price of their regular bundle. In addition, these services were only valid for on-net roaming, that is the user had to roam in a visited country where there was an affiliate of their domestic mobile network operator. This limited the international coverage of these roaming packages and required that a roaming user in a visited country ensured that their mobile terminal connected only on the affiliate's network. Pricing international mobile services separately should be unproblematic, particularly for on-net services for the same company, in practice this had led to unreasonable mark-ups compared to services purchased as part of a bundle.

29. Since 2012, the first offers from MNOs that include international mobile roaming, as an integral part of their bundles, have been made almost entirely in OECD countries with four or more operators. Such offers have largely not yet emerged in countries with three operators. One exception is Portugal where one

29 Member countries are Burundi, Kenya, Rwanda, the United Republic of Tanzania, and Uganda. 30 Media statement on the Meeting of SADC Ministers responsible for communications, postal and ICTs. Mangochi, Malawi, 21st November 2014 , http://www.sadc.int/ 31 See, OECD, Wireless Market Structures and Network Sharing”, DSTI/ICCP/CISP(2014)2/FINAL

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MNO offers roaming as an integrated part of a premium offer for up to 15 days, as well as with other offers requiring an additional charge per day for a number of countries in Europe (Table 2). The other country is Switzerland, where one MNO’s offers include between 30 to 360 days of roaming in the European Union and Western European countries.32

30. While some offers are still restricted to on-net roaming (e.g. Sweden), what is striking is the first off-net offers for international mobile roaming from operators based in France, Israel, Luxembourg, the United Kingdom and the United States. Moreover, these offers include not only off-net international mobile roaming but also roaming in some countries where these operators do not have a network with shared ownership. Most of the networks that have launched off-net international mobile roaming, to date, are those with the smallest market shares suggesting they view this as a strategy to gain customers. At the same time, some of the owners of these operator’s own networks in countries with three MNOs or are incumbents but have not launched similar offers.

31. While having four or more operators has not necessarily led to the integration of international mobile roaming in all countries, it has improved non-integral offers in countries with those numbers of players, such as Canada. Nonetheless, when the smallest players launch integral offers their larger rivals, as occurred in France, Israel and Luxembourg, sometimes follow them. Outside the OECD area, the smallest players in markets with four MNOs are also adopting elements of the RLAH strategy. In 2014, in Malaysia, for example, “U Mobile” the smallest player in that country, began to offer 50 MB per day to roamers in countries in Southeast Asia as well as Australia.33 It was the first company in Malaysia to make such an offer.

32 Swisscom, “Unlimited surfing and mobile calls and texts to all networks”, 13 June 2012. https://www.swisscom.ch/en/residential/mobile/subscription-tariffs/infinity.html#interesse 33 Keep Connected with Free Internet Roaming While Travelling Overseas, Only with U Mobile” Kuala Lumur, 18 November 2014. https://www.u.com.my/press-release/4206

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Table 2. Challenger brands influence in international mobile roaming.

MNOs* International Roaming Challenger Countries covered included in Bundle** MNO offering services Australia 4 to 3 No 4 to 3 No Denmark 4 Yes (May 2014) Hi3G Austria, , Ireland, , , Luxembourg, Netherlands, , , Sweden, Switzerland, United Kingdom and Hong Kong (China) France 3 to 4 Yes (Apr 2013) Free Austria, , Canada, Czech Mobile*** Republic, French West Indies and Guiana, Germany, , Ireland, Israel, Netherlands, Poland, Portugal, and . Israel 4 to 5 Yes (September 2014) Golan Mobile , France, Germany, *** Greece, Ireland, Netherlands, Rumania, , Italy, , New Zealand, Portugal, Spain, South Africa, Turkey and the United Kingdom Japan 4 Yes (September 2014) Softbank United States Luxembourg 3 to 4 Yes (Jan 2014) Join European Union Experience*** Netherlands 3 to 4 Yes T-Mobile European Union Portugal 3 Yes (Mar 2013) Vodafone 19 European countries Red Top**** Sweden 4 Yes Hi3G Denmark Switzerland 3 Yes Swisscom European Union and Western Europe United 4 Yes (Aug 2013) 3-UK*** Australia, Austria, Denmark, Finland, Kingdom France, Hong Kong, Indonesia, Ireland, Israel, Italy, Macau (China), Norway, Sri Lanka, Sweden, Switzerland, and the United States. United States 4 Yes (Oct 2013) T-Mobile More than 100 countries US*** Notes: * Changes between 2012-2015. ** Roaming services included as part of a bundle for which no additional or metered charges are incurred. ***MNOs selected have the smallest nationwide market share in those countries except for Swisscom which is the incumbent in Switzerland. ***The companies have off-net international mobile roaming. **** With this offer no additional or metered charges are incurred for 15 days/year after which users pay 2.99€/day. Source: OECD

32. In 2013, for example, Iliad (Free) in France introduced a RLAH plan for its customers roaming in a number of countries in the European Union and expanded this offer to include Canada and Israel. It is limited to a period of 35 days for any single country, i.e. during this period a subscriber can use his or her mobile service to make local calls in the visited country, receive calls at no cost and access data on the same terms as at home (e.g. 3GB for coverage). A call back home would be priced at the same rate as if the subscriber were at home, that is, there would be no charge. The market has shown a dynamic trend in offering such roaming services. Another company in France, Bouygues, has followed with bundles which include, when roaming in Europe, unlimited voice (limited to the calls to France) and text and up to 3GB of data (depending on the bundle). The new fourth mobile network operator in Luxembourg offers a RLAH subscription covering all of Europe without the need for flat rate across Europe without the need for add on charges or limited by number of days. For EUR 29.95 (USD 38) a subscriber obtains 200 minutes of voice and 400 SMS which can be used either at home or across Europe. The package provides 1GB of mobile data but only 100 MB can be used outside of Luxembourg at no extra charge. In the Netherlands, following

18 DSTI/ICCP/CISP(2014)6/REV2 the introduction of a fourth operator, T-Mobile introduced an offer which allows customers to use minutes from their domestic bundles when roaming in the EU (up to a limit of 120 minutes per month) and incoming calls as well as SMS are not charged. This offer, introduced in January 2015, does not include data.34

33. In September 2014, Golan Telecom in Israel, introduced a similar offer to that of Free in France.35 The plan includes unlimited calls (domestic and fixed lines in 55 countries) and SMS, along with 6GB of data, priced at USD 27 per month (NIS 99). When roaming there are no additional charges with the service being valid for 30 days. Golan Telecom's current customers with the Golan Telecom Unlimited Plan at NIS99 per month received the service automatically. This announcement was followed by larger rival Pelephone Communications launching, for the same price, its own service in 87 countries with a limit of 100 MB per day.

34. In the United Kingdom, Hutchison 3G UK (“Three”) announced its so called "Feel at Home" offer for seven countries around the world on 30 August 2013. The offer was later expanded to 16 countries. While the Three offer includes voice, text and data, voice calls and SMS messages are only included when they are made back to the customer’s home country. In earlier years, Three had offered an on-net roaming service on MNOs in the same group but this had been withdrawn. One of the reasons given for its withdrawal had been that customers roamed onto other networks, without being necessarily aware of the change, and this led to “bill shock”. Some MNOs still require that the user remain on the network of MNOs in the same group or partner networks. Telia Denmark, for example, offers a RLAH plan for the Nordic and Baltic countries although this is subject to the subscriber remaining on the networks of preferred partners when roaming and does not cover mobile data services. Finland has a bilateral Memorandum with Russia concerning actions to decrease roaming pricing. It does not include any detailed price limits but expresses in general terms the political will to reduce the level of roaming tariffs in both countries and the mobile operators in the two countries commit themselves to negotiate with one another. The Memorandum was signed in 2011 and since then roaming prices in Russia have decreased. The largest Finnish operator Elisa has the same Russian and EU-area roaming charges but two other operators maintain higher roaming prices in Russia than in EU countries. Also in Finland, TeliaSonera offers a subscription (Sonera Sopiva) which includes calls, SMS and data in Baltic and Nordic countries with the same tariffs as domestic traffic when roaming on its own networks.

35. In 2013, T-Mobile (US) introduced an international roaming offer which does not incur an extra charge and provides unlimited 2G data access and text messaging to 120 countries at no extra charge, and roaming voice calls for USD 0.20 per minute. This compares to USD 0.24 for intra-European Union roaming voice calls. There is no action the customer needs to take to avail themselves of these services.

36. An example where cross-border investment has led to lower IMR charges is in Japan where Softbank recently introduced a roaming plan for the United States providing unlimited calling and data within the United States, but limited to customers using the iPhone 6 and who have a domestic subscription providing flat rate calling and data. The offer is on Sprint, an MNO in the United States for which Softbank is the largest shareholder.

37. It needs to be recalled that IMR prices in the past were extremely high and, in many cases, still remain high despite significant reductions. The examples below are indicative of some of the reductions that have taken place.

34 Telecompaper, “T-Mobile Netherlands adds 'roam like home' to postpaid plans”, 12 January 2015 http://www.telecompaper.com/news/t-mobile-netherlands-adds-roam-like-home-to-postpaid-plans--1059001 35 https://www.golantelecom.co.il/web/news5.php

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Price trends for voice and SMS

38. As indicated above the most significant reductions in international mobile roaming prices have been associated with bundles that include RLAH offers and elements. How much a consumer benefits depends on their usage pattern but some examples can be given. From 2009, when the OECD reviewed all international roaming prices between OECD countries for voice and text service, the following examples can be highlighted:36

 A user in France travelling to Israel and making a three-minute call home would have paid USD 11.14. Following the entry into the French market by Free (Iliad) at the beginning of 2012 and inclusion of Israel in Free’s RLAH bundle the same call for one of their customers would incur no additional charge. The cost of two three-minute calls from Israel to France in 2009 was equivalent to the price of a mobile monthly bundle of a Free subscriber.  A user travelling from Israel to Germany or Italy would have paid USD 5.40 and USD 7.46 respectively to make a three-minute call home. In 2014, both calls would be included in their bundle with Golan Telecom. A Golan Telecom user now pays the same amount for their entire monthly bundle of services as a single roaming call from Italy to Israel for 11 minutes in 2009.  A user travelling from Japan to the United States would have paid USD 4.04 for a call home. Following Softbank’s RLAH offer they would pay no charge over and above their regular monthly bill for such a call. To receive a call from home they would have paid USD 5.66 in 2009 compared to no charge in 2014.  A user traveling from the United Kingdom to Australia would have paid USD 3.87 for a three-minute call back to the United Kingdom. For the same user travelling to the United States they would have paid USD 5.92 for the equivalent call. Following the introduction of 3G-UK’s RLAH offer they would not pay any additional charge.  A user travelling from the United States to an OECD country would have paid an average of USD 0.55 per SMS. Following the introduction of the RLAH offer from T-Mobile (US) such a text would not incur any additional charge. T-Mobile (US) still bills per call but the price would have reduced from an average USD 5.16 for a three-minute call home from another OECD country to USD 0.60.

Price trends for data

39. In 2011, in the lead up to the Council Recommendation, the OECD surveyed the prices for data roaming.37 The OECD compared a variety of data roaming plans based on the amount of data users could send or receive when abroad. For 1Mb of data, for example, the equivalent of sending 10 photos, the average price by country across the OECD was USD 9.48 (based on purchasing power parity). Canadians travelling abroad paid the most (USD 24.61), followed by people from the United States (USD 22.06) and Mexicans (USD 19.85). Greeks abroad paid the least (USD 4.17), followed by subscribers from (USD 4.42) and Luxembourg (USD 4.46). The wide difference in prices, according to the report, could be explained either by Greek mobile phone companies being charged less by wholesale operators than

36 See, op.cit., OECD, International mobile roaming charging in the OECD area. 37 See, op. cit., OECD, International mobile data roaming.

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Canadian operators and passing those savings onto customers. Or it could have reflected greater competition in the Greek retail roaming market than in Canada.38

40. In 2014, it is possible to compare some recent international roaming offers for data introduced over the past three years with the rates gathered in 2011. While no RLAH offer has yet emerged there have been substantial changes especially for offers involving the United States.

41. Given that Canadian’s paid the highest charges for international roaming in 2011 it is worth noting these developments. Mention was made earlier of the packs sold by Bell and Rogers that provide lower data roaming prices in the United States than in the past. One of the more striking offers has been made by Wind Mobile, which in August 2014 reduced rates for roaming in the United States by 95 percent. Following the change a Canadian Wind customer could pay USD 0.038 per MB while in the United States. The changes since 2011 are even more striking and support the efforts by policy makers in that country to increase competition, in particular by creating policies to facilitate new MNOs in the market. In 2011 a subscriber in Canada paid USD 27.34 (PPP) for 20 MB whereas today the subscriber could pay USD 0.76 (PPP). Alternatively the same subscriber could pay USD 11.36 (PPP) for unlimited data access.

42. For the RLAH offers the savings for data roaming are also striking. In 2014, customers in all the selected operators could pay for their entire monthly subscription just on the savings for 20 MB of international mobile roaming data at the 2011 rates. To appreciate such a change from a different angle a customer of Softbank would pay off the price of a new iPhone 6 (16 GB) from the equivalent savings on 60 MB of international roaming data in the United States at 2009 rates.

38 In Greece, although voice services were, in 2011, subject to EU regulations this was not the case for mobile data which became subject to regulation in July 2012.

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Table 3. Recent price changes for data roaming

Operator USD PPP 2011 2014 2011 2014 used for Note 2014 Home Roaming in: 1 MB 1MB 20 MB 20 MB Country *Unlimited subject to USD PPP 11.36 (USD United 0* or 0* or Canada 10.02 27.34 Wind Mobile 13.2) or USD 0.038 States 0.038 0.76 PPP (USD 0.044) per MB Denmark See Table 2 5.54 0 93.31 0 Hi 3G France See Table 2 5.24 0 27.2 0 Iliad Free Golan Israel See Table 2 15.15 0 130.4 0 Telecom United Users need an iPhone Japan 13.44 0 198.16 0 Softbank States 6 Europe Limit of 100 MB for Luxembourg 4.46 0 49.86 0 Join Union Europe on basic plan 19 European 15 days for a “Red Portugal 6.45 0 82.55 0 Vodafone Countries Top” subscription Sweden See Table 2 6.35 0 127.02 0 Hi 3G Switzerland See Table 2 6.92 0 65.16 0 Swisscom United 16 countries 6.02 0 99.23 0 3G-UK Includes 4G roaming Kingdom Over 120 T-Mobile 2G Edge speeds United States 22.06 0 155.71 0 countries (US) unless upgraded.** Notes. For 1 MB in one session - average price by country of origin of the traveller - intra EU/EEA routes excluded. For 20 MB in one session, average price by country of origin of the traveller, price of the least expensive destination of the traveller. The data for 2011 are only indicative as they involve different operators and destinations. The 2011 data are from “OECD “International Mobile Data Roaming”, May 2011. 39 For T-Mobile customers who require higher speeds, the carrier offers Speed Passes for 3G HSPA+ network access. The plans range from 100 MB for one day at USD 15 to a two-week, 500 MB pass for USD 50. Source: OECD

Caveats on above price trends

43. As might be expected the changes made to international mobile roaming offers have substantially influenced the behaviours of customers and their usage patterns. For example, T-Mobile (US) reports its customers make three times more calls, sent seven times more SMS texts, and used 28 times more data than they did under the previous plans when roaming.40 Strikingly, 53% more of its customers now roam on cellular in supported countries than prior to the price changes. For its part, 3G-UK says it experienced a “1000x” increase in data usage by its customers in Australia in the first three months following its RLAH offer.41

44. While the changes to the international roaming market are very propitious, for countries where RLAH or similar offers have emerged, the price comparisons exemplified here are still the exception rather than the rule. Outside these countries prices remain high unless curbed as a result of regulatory intervention, such as in the European Union but only for intra-European traffic. Moreover, it can be noted that RLAH offers have mainly emerged in countries with four or more MNOs and arguably, there is a possibility that

39 International Mobile Data Roaming, May 2011. http://www.oecd.org/internet/broadband/48127892.pdf 40 Sarah Reedy, “T-Mobile: 2G's Good Enough for Global Travel”, 11 June 2014, http://www.lightreading.com/mobile/4g-lte/t-mobile-2gs-good-enough-for-global-travel/d/d-id/709411 41 Gordon Kelly, “5 Reasons Three UK Just Changed the Global Wireless Market”, 4 December 2014, http://www.forbes.com/sites/gordonkelly/2013/12/04/5-reasons-three-uk-just-changed-the-global-wireless- market/

22 DSTI/ICCP/CISP(2014)6/REV2 the momentum for such developments could be substantially reduced in those countries that have experienced or are witnessing mergers. The extent of price reductions shows that either the previous prices had little relationship to cost or that costs have decreased allowing for price reductions. However, if the latter is the case one would expect a more widespread reduction in retail prices across the market if there was some semblance of competition. For this trend to continue it is important that regulators ensure that sufficient competition continues developing in mobile markets.

Add on roaming packages

45. Strictly defined the concept of 'Roam Like at Home' (RLAH) implies that mobile subscribers, when visiting another country, can use their mobile phone as if they were in their home country without incurring any extra charges. That is, they can make a local call in the visited country, call back home, call a third country, access mobile data and use SMS on the same commercial terms as their home mobile subscription incurring no extra charges. If any charges were involved they would occur if usage, when roaming, went beyond their allocation of minutes and/or data of their monthly subscription and these charges would be at the same level as if the subscribers were in their home country. In many cases MNOs have advertised RLAH tariffs but these have required subscribers to pay an extra surcharge either on a daily, weekly or monthly basis. In other cases so-called RLAH offers have been limited to only a few mobile services, e.g. calls back home are not charged and sending and/or receiving SMS is not charged or RLAH offers only apply if subscribers in visited countries use networks of MNOs affiliated with their home country MNO. They rarely include calls to third countries. Some say the limitations in the ability to offer RLAH are due to differences in cost structures in the two countries involved (i.e. negotiated wholesale rates between home and visited networks not being conducive to such offers).

46. Some examples that diverge from a strict RLAH definition include Japan's Softbank offer, which requires roaming on specific networks. The operator , where the number of MNOs is being reduced from four to three, also offers a plan advertised as a RLAH plan to five European countries and Hong Kong, China, and subject to the subscriber using MNOs in the Hutchison group.42 The offer requires an extra payment to roam on these networks rather than being inclusive in the customer's existing bundle, except for incoming text messages (customers on an unlimited plan also obtain 2GB of data).

47. One difference that sets apart Three's (Ireland) offer from 3G (UK) or T-Mobile (US) is that to qualify customers need to pay for an add-on in Ireland even if on prescribed networks. While add-on packages are available for 3G or 4G data for different prices depending on the period of time and how much data is required for a company such as T-Mobile (US) the baseline offer does not impose an extra cost for a customer. In other words, the customer does not need to sign up for anything that is not already included in their regular plan or take any action to benefit when roaming.

48. Several other operators have launched plans which are referred to as Roam Like at Home, but require extra outlays by the subscriber. For example, in the United Kingdom, Vodafone has an add on roaming offer requiring a per day payment supplement for its Vodafone Eurotraveller or Vodafone Worldtraveller options allowing the subscriber to use their United Kingdom minutes, text and data, and 02 offers data roaming add-ons to its pay monthly and pay-as-you-go customers. In Australia and New Zealand, Vodafone has offered daily roaming plans to specific countries for an additional charge (e.g. for New Zealand USD 4 per day) allowing subscribers to use their existing bundles). In Canada, Rogers also advertises RLAH plans to allow their customers to use their Canadian minutes, text and data, but also requires signing up for additional per day, week, or month fees.

42 https://apps.three.ie/roaming/pages/display/three-like-home

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49. In the United States, AT&T has an add on roaming package for travellers in Europe and for the rest of the world which cover roaming voice services at a 33 percent discount compared to the 'pay per use' rate but requires a one-off charge of USD 30. Data packages are also available.43

50. While many MNOs have introduced new offers, lowered prices and provide roaming data packages as an add-on, prices still remain high. The intra-European retail price for mobile data has been capped at USD 0.26 per MB (without VAT), which is substantially higher than the average negotiated wholesale rates for data reported in recent BEREC roaming data benchmark reports (for example, the 12th international roaming BEREC benchmark report covering the period October 2013 to March 2014 states that the average EEA wholesale roaming inbound cost for data per MB (prepaid and post-paid) was 0.042 euro cents in Q1 2014 compared to the applicable wholesale cap of 0.15 euro cents.44 However, while EU MNOs cannot exceed this rate for data roaming within the EU, they can, and do, exceed the rate for data roaming outside the European Union. For example, one United Kingdom MNO charges USD 1.30 for data roaming outside the EU compared to USD 0.31 (including VAT) within the European Union. In comparison one US MNO charges USD 1 per MB when roaming internationally and an overage charge of USD 10 per MB, an Australian MNO charges USD 0.26 per MB for its low roaming data pack, and a New Zealand MNO charges USD 0.81 per MB for data roaming.

Substitute services and pricing

51. Roaming prices across the OECD remain sufficiently high as to continue to provide arbitrage opportunities for substitute service providers to enter the market. Although the Council Recommendation stressed the importance of increasing awareness of substitutes only some regulatory bodies mention the availability of substitutes on their web sites. Increased public awareness of substitutes has come mainly from media attention rather than from explicit action by government authorities.

52. Substitute roaming providers offer a range of services and prices which, at times, may be difficult for the average person roaming to decipher and decide which is the best buy. Some substitutes require inserting a new SIM card and, therefore, losing the home mobile number while roaming. Other substitutes require a monthly subscription, or a 30 day subscription, which for the occasional roamer or for short periods of travel, increases rather than reduces the cost of roaming. They often require the use of a smartphone, with various levels of inconvenience and technical proficiency as well as some not offering all services (e.g. voice without SMS or data without voice). The most economical alternative roaming package may depend on the length of the period that a subscriber expects to roam, the number of times in a year that the subscriber roams and the countries visited. Some, by far from exhaustive, examples can be given here:

Roam Mobility (Canada) caters to Canadians roaming in the United States and offers a daily plan, which requires using the company's SIM card. The plan costs USD 3.56 and offers unlimited calls within the United States, unlimited calls back to Canada, unlimited SMS and 300MB of mobile data.45 The price and offer compare extremely favourably to those charged by the largest MNOs in Canada: Bell offers unlimited voice and text in the United States for USD 30 per month, and a 200MB data plan for USD 20 and a 500MB for USD 50. TELUS also offers a range of add on plans for United States roaming, all of which include unlimited text and voice. The most basic plan offer 150MB of data for three days for USD 25, and the largest plan offers 1GB of data for 30 days for USD 80. Rogers in Canada offers their customers the ability to use their domestic voice, text, and

43 For example, a monthly charge of USD30 obtains 120MB of mobile roaming data. 44 Figure 36 of BOR(14)115: International Roaming BEREC data Report, October 2013 – March 2014 45 There is a one-off charge to purchase the SIM card.

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data allotments in the United States. for USD 5 per day. Wind Mobile, a small challenger MNO in Canada, has an add on plan that provides unlimited voice, text, and data in the United States for USD 15 per month.

Roamer: The Latvia and United Kingdom based company offers users the ability to download an app for iOS and Android smartphones. A user then purchases a local SIM card with the app enabling them to use it in conjunction with their regular telephone number (this number is “parked” before the user leaves their home country of origin and forwarded). A user from the United States roaming in France would pay USD 0.028 to call a fixed or mobile number in the United States.46 They could receive calls for USD 0.019 per minute while in France. Added to these costs are those for purchasing a local SIM card. The system, which relies on call back for outgoing calls, does not enable SMS.47 There are also a number of smart-phone apps that provide access to VoIP services such as Viber. Viber uses the consumer’s regular mobile telephone number as the ID for the service.48 This enables the roamer to purchase a local SIM card or use Wi-Fi to make and receive VoIP calls.

Cell Buddy: This Israeli company has developed a wireless identification technology based on the GSM encryption algorithm which makes it possible for mobile network providers to check the authenticity of user identities.49 This means users can travel without having to change their SIM card to switch from one operator to another. The accompanying app enables a user to select the local plan that best suits them in the country where they are roaming. Customers use a universal SIM card provided by Cell Buddy. They turn on their unlocked smartphones and launch a Cell Buddy app once they reach their destination. The app finds local carriers and lets a user compare prices, data packages, download speeds and other factors. A user is assigned a local phone number and can continue to use their regular phone number back home, at regular prices, using the same SIM card. The service, in effect, eliminates roaming charges to the home carrier with Cell Buddy acting as an intermediary, between SIM card resellers and customers, also charging USD 5 per day.50

53. In 2011, the OECD proposed that:

"Further liberalisation, in wireless markets, could enable M2M-users to buy wholesale access to mobile networks, to change mobile networks without switching SIM-cards and to directly negotiate national and international roaming. This would, however, involve changes to current numbering policies regarding IMSI-numbers for SIM-cards and telephone numbers, so that not only traditional telecommunication companies, but also M2M-users could access these numbers. Such changes

46 https://roamerapp.com/en/rates/ 47 Marcus Yam “Roamer: Use Your Phone Abroad Without Crazy Roaming Bills”, 27 February , 2014, http://www.tomshardware.com/news/roamer-app-phone-roaming-data,26176.html 48 https://support.viber.com/customer/portal/articles/1379334-using-viber-while-abroad#.VQLu70KjLS4 49 Cell Buddy takes first place at the 4YFN start up competition during MWC 2014, Barcelona. http://www.cell- buddy.com/?p=1356 50 “Israeli start-up seeks to end roaming charges”, 13 December 2013. http://gadgets.ndtv.com/apps/news/cell- buddy-seeks-to-end-roaming-charges-by-turning-any-smartphone-local-458343

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could lead to a more dynamic market for mobile wholesale access, mobile roaming and a strengthening of competition between mobile network operators."51

54. The Netherlands has reformed regulations allowing private companies to have access to IMSI number ranges without the intervention of a MNO allowing businesses more flexibility on how to provide (non-public communication services) across borders.52 Other countries, such as Germany and Ireland, have launched inquiries in this area.53 The Council Recommendation deals with services provided by mobile network operators, namely voice, SMS and mobile data. Increasingly, however, automobiles and consumer electronic devices (e.g. e-books, GPS devices, etc.) use SIM cards and require access to networks when outside the home country. A range of businesses use SIM cards in products (e.g. containers) and for the provision of transformer services. The wider scope of roaming has becoming increasingly important as the "Internet of things" develops. High roaming charges will slow innovation in these areas.

55. In April 2015, the Belgian and Luxembourg telecommunication regulators BIPT (Belgian Institute for Postal services and Telecommunications) and ILR (Institut Luxembourgeois de Régulation) concluded an agreement that makes it possible to link a Belgian mobile number to a Luxembourg network, while these are in principle nationally segmented. This enables operators to offer mobile calling, texting and data in each country at the same rate on both sides of the border, thereby clearing the way for operators to eliminate roaming charges should they so wish to do so (i.e. an RLAH offer).54 The agreement between the two regulators makes it possible to link a Luxembourg IMSI-number to a Belgian mobile number, while these are in principle nationally segmented. JOIN Experience, a new Luxembourg MNO, proposes to provide services directly to Belgian users based on its existing roaming agreements concluded in Luxembourg. In addition, BIPT reports that a Ministerial Order was adopted in order to make extraterritorial use of IMSIs possible according to the International Telecommunication Union (ITU) guidance and based on reciprocity. This means that, conversely, Belgian operators also get the same rights in Luxembourg.

56. Mobily (Kingdom of Saudi Arabia) offers a roaming service (Mobiliy Roamtalk) with no add-on charge, which allows roamers to call home at local call rates and receive calls and SMS at no charge. It also provides and innovative service allowing subscribers unlimited access to Facebook when roaming for SAR5 (USD1.33) per day including viewing videos and with no limit on the data volume used.

MNO self substitutes

57. Some mobile network operators have also begun to offer substitutes. For example, KDDI of Japan has offered a limited package to its users by providing Wi-Fi access for smartphones across 100 countries also with iPass.55 SFR (France) has an agreement with Fon allowing SFR customers access to

51 DSTI/ICCP/CISP(2011)4/FINAL, Machine-to-Machine communications: Connecting billions of devices, page 5, http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=DSTI/ICCP/CISP(2011)4/FINAL&docL anguage=En 52 The IMSI number is the unique number of a SIM card and consists of a mobile country code, mobile network code and phone number. 53 BNetzA has received feedback from different stakeholders and is currently evaluating those statements. See the following link in German: http://www.bundesnetzagentur.de/cln_1411/SharedDocs/Downloads/DE/Sachgebiete/Telekommunikation/Unt ernehmen_Institutionen/Nummerierung/Technische%20Nummern/IMSI/Mitteilung819_2014.html?nn=268376 54 BIPT, “Bilateral agreement between Belgian and Luxembourg telecoms regulators clears the way for calling, sending SMS messages and surfing between both countries without roaming costs.” http://www.ibpt.be/public/pressrelease/en/95/EN_Persbericht_BIPT-ILR.pdf 55 http://www.ipass.com/press-releases/kddi/

26 DSTI/ICCP/CISP(2014)6/REV2 eight million Fon hotspots across the globe (and Fon clients can use SFR hotspots in France).56 AT&T and Boingo Wireless also agreed in 2013 to a reciprocal Wi-Fi roaming deal giving AT&T subscribers access to Boingo's global Wi-Fi hotspots while Boingo customers travelling to the United States obtain access to AT&T's Wi-Fi hotspot network.57 Meanwhile NTT DoCoMo, KT and have announced a new partnership on both Wi-Fi and NFC roaming plans across their respective countries using EAP-SIM for seamless authentication for their customers roaming on each other’s networks.58

MVNOs and pricing

58. Increased regulatory recognition of the role that MVNOs can play in stimulating national mobile competition has been facilitated by regulations in some countries that require MNOs to allow MVNOs to connect to their network. However, to date MVNOs have largely not played a notable role in international mobile roaming although many do offer stand-alone substitute services. MVNOs could also be expected to play an increased role if structural measures in the European Union begin to develop. One example of an MVNO offering a competitive service is the Netherlands where a new fourth MNO will launch a 4G network in 2014. It is notable, ahead of that launch, MVNOs offers are becoming more competitive and, in one case, included European wide roaming for consumers as part of a bundle.59 Such a development depends on a competitive wholesale market as MVNOs are often reliant on the roaming agreements of MNOs. In 2015, , an MVNO, which operates in the United Kingdom under the brand ‘iD’, began an offer, which included RLAH for 18 countries, such as Indonesia, Israel and New Zealand.60

59. In February 2015, in the United States, ‘Univision Mobile’, an MVNO using T-Mobile (US), launched a bundle that includes roaming, in a group of mostly Hispanic speaking countries, at no additional charge.61 Customers of Univision Mobile can roam (for voice and text) while in Argentina, Brazil, Canada, Colombia, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Peru, Spain, and Venezuela. Usage is deducted from their allowance at standard long distance rates to fixed or mobile lines making this a RLAH offer.62 By way of example, a call to a Mexican landline while roaming is USD 0.03 per minute and for Spain the equivalent is USD 0.029 per minute while for Canada USD 0.033 per minute.

60. In April 2015, in the United States, Google announced it intended to luanch an MVNO using T- Mobile and Sprint as wholesale providers.63 Google’s so called Project Fi offers unlimited voice and text services domestically for USD 20, together with blocks of data at USD 10 for 1 GB. International texts are included in the bundle to more than 120 countries. In addition, when travelling in those countries, data

56 http://corp.fon.com/blog/#.UfasEo03B8E 57 http://www.boingo.com/pr/articles/?a=2013-04-09-boingo-announces-global-wi-fi-roaming-agreement-with- atandt&id=871&date=2013-04-09 58 http://thenextweb.com/asia/2013/02/25/docomo-china-mobile-and-kt-partner-on-wi-fi-and-nfc-roaming- schemes-for-japan-china-and-korea/ 59 ChoozzeBright costs EUR 35 per month for unlimited calls, SMS and data in the Netherlands and the rest of European Union. “Choozze launches freemium mobile offer in Netherlands”, 19 August 2014. http://www.telecompaper.com/news/choozze-launches-freemium-mobile-offer-in-netherlands--1031861 60 Rich Trenholm, “Carphone Warehouse launches mobile network iD, with free roaming”, CNET, 23 April 2015. http://www.cnet.com/uk/news/carphone-warehouse-launches-mobile-network-id-with-free-roaming/ 61 “Univision Mobile Adds International Calling, Texting and Roaming at No Extra Charge”, 3rd February 2015. http://newsroom.t-mobile.com/news/univision-mobile.htm 62 https://en.asistencia.univisionmobile.com/articulos/asignacion-internacional 63 https://fi.google.com/about/plan/

27 DSTI/ICCP/CISP(2014)6/REV2 usage costs the same USD 10 per GB as it does in the United States (data speed is limited to 256kbps/3G and users need to use a Nexus 6). Roaming calls are USD 0.20 per minute, together with the same unlimited international texts back to the United States or the other countries covered. In terms of data, Google’s proposed tariffs are effectively an RLAH offer but with the added advantage of them being charged only for the data they use. In other words, if a user purchased 2 GB of data for a month for USD 20, on top of the base fee of USD 20, and used MB 500 domestically and 1 GB roaming they would be refunded USD 5 for the unused MB 500.

Roaming MVNOs

61. A number of MVNOs specialise in providing roaming services, either with the full range of service or only mobile data services. One thing that sets these “Roaming MVNOs” apart is that they do not provide their customers with their regular domestic service, such as an MVNO like Univision Mobile. Some of these MVNOs only offer services between two countries while others are 'global MVNOs'. By obtaining access to local mobile and fixed networks in several countries and paying local wholesale termination rates, MVNOs can by-pass high IOTs. An example of a company specialising in one market is Roam Mobility. Based in Canada it offers roaming for Canadians visiting the United States and provides a United States number to customers and unlimited calls and text to Canada and the United States for a fixed per day charge.64 In France, Virgin Mobile, a MVNO, offers a monthly package including unlimited voice for 67 roaming destinations in addition to unlimited SMS and Internet for roaming in week-ends in Europe.65

62. An example of a more global company is Woolworths Mobile Global Roaming (Australia) which provides customers with a global SIM covering over 200 countries. The SIM comes with a United Kingdom local number and the subscribers home mobile number can be diverted to receive calls on the global SIM. Local landline numbers can be bought for other countries. The cost for a SIM, which is valid for one year, is USD 25 which includes a USD 9 credit. Data rates for destinations such as Japan, Europe and the United States were charged at USD 0.39 per MB -- though USD 0.69 for New Zealand.66 By way of comparison Telstra Australia offers data packs for USD 2.61 per MB.67 This is between 125 to 441 times Telstra’s domestic prices for mobile data.68 This underlines the differences between even a less expensive brand such as Woolworths compared to domestic prices.

63. Roaming One (France) offers plans for data roaming covering 160 countries. For Europe it charges USD 0.21/MB compared to the regulated retail cap of USD 0.26/MB. Dataroam (United Kingdom) offers a prepaid data SIM for USD 24.50 for 50MB which can be used in 40 countries at a flat rate. Other companies include data only roaming for specific regions including Ukko Mobile (Europe) or selected countries around the world such as Goodspeed which requires the purchase of a device.69

64 http://www.roammobility.com/ 65 http://www.virginmobile.fr/offre-mobile/forfaits-sans-engagement 66 http://www.woolworthsglobalroaming.com.au/Info/CompareRates.aspx 67 http://www.telstra.com.au/mobile-phones/international-roaming/data-packs/ 68 In October 2014, Telstra domestic mobile data prices ranged from USD 0.02 to AUD 0.005 per MB depending on volume, http://www.telstra.com.au/broadband/mobile-broadband/plans/ 69 Dmitri Sarle, “One Sim Card To Rule Them All: Ukko Mobile From Helsinki Eliminates Data Roaming Forever”,March 27, 2013, and https://goodspeed.io

28 DSTI/ICCP/CISP(2014)6/REV2

Improving awareness and transparency

64. There has been considerable progress in member countries in promoting awareness of roaming prices. Much of this has come about as a result of improvements in transparency. In addition, as already noted, high mobile roaming prices have become a public issue in the last few years and the discussion of the issue, by policy makers and in the media, has helped improve the awareness of customers of the pricing issue. As noted earlier few national regulators provide information on substitutes.70 At the same time there has been increased recognition by mobile network operators of the need to meet the demands of subscribers for clearer and more accessible access to roaming prices and tools needed to help them limit consumption when roaming and manage their bills.

65. This has led many mobile operators to inform customers that they need to limit their usage when roaming, in particular for mobile Internet access, as well as providing information on best practices which should be followed when roaming to ensure that there is no "bill shock" when returning to the home country. In addition, the ability of smartphone users to access apps provided by over-the-top entities or others offering alternative roaming have proliferated.

66. Transparency requires that price and other relevant information on roaming is readily available and can be clearly understood by a user. Much effort has been taken since the Council Recommendation at the international, regional and national level to put forward best practice procedures to protect and empower consumers. In September 2012, the International Telecommunication Union approved a new recommendation (ITU) D.98 on charging in international mobile roaming service. 71 Section 4 of this recommendation contains principles for lowering IMR rates including empowering consumers (see Box 2).

Box 2. Excerpt from ITU Recommendation D.98 Charging in International Mobile Roaming Service

Empowering consumers:

1. Transparent information on IMR retail rates and structure before users roam internationally; 2. Usage alerts when users start to roam; 3. Warning alert when a certain cost has incurred; 4. Roaming cost caps; 5. Special user protection measures for inadvertent roaming in border regions; 6. User choice of visiting network; Source: ITU, Telecom Standardization Bureau, new Recommendation ITU-T D.98, Charging in International Mobile Roaming Service, www.itu.int/ITU-T/recommendations/index_sg.aspx?sg=3

67. The main provisions of the European Union's Roaming Regulation III adopted in June 2012 can be highlighted here (Box 3). This regulation built on the previous two European Union’s Roaming Regulations by increasing transparency for mobile subscribers as well as introducing additional measures to protect subscribers. Earlier measures also aimed at reducing "bill shock" by introducing a cut-off mechanism once a data roaming bill had reached 50 euros. Mobile operators are also required to send an

70 The Hong Kong (China) Communications Authority has a web page providing detailed information on substitutes to consumers, http://m.mobilenet.gov.hk/en/consumer_tips/substitutes_for_mobile_voice_roaming_services/index.html 71 http://www.itu.int/en/ITU-T/studygroups/com03/Pages/results.aspx

29 DSTI/ICCP/CISP(2014)6/REV2

SMS message to subscribers once they have reached 80 and 100 percent of the 50 euro limit.72 Once the 100% limit is reached, operators must stop charging for data unless the customer consents to lifting the limit. The European Union Roaming Regulations apply to roaming services made within the European Union, however, the transparency requirements and cut-off limits apply both for services within the European Union and outside the European Union. An important transparency initiative on the part of the European Union has been the publication by BEREC of a number of reports on wholesale and retail prices. These reports provide information on the development of retail and wholesale charges for voice, SMS and data roaming and help in formulating regulatory decisions.73 BEREC has also published a "Report on transparency and comparability of international roaming tariffs"74 aimed at assessing the availability for customers of clear information on roaming prices and the ability for customers to compare different price offers allowing them to choose the best offers for their use. In the United Kingdom, has published a consumer guide on using a mobile phone abroad supported by a range of associations, including links to related guides and various tips including advice on password protecting smartphones and on how consumers can switch off data if they do not want to use it when roaming.75 In Australia the Australian Competition and Consumer Commission (ACCC) provides guidance to mobile roaming users on how to reduce their bills (Box 4).76

72 Consumers can select a different cut-off limit or opt out of this bill shock safeguard entirely. Operators will be obliged to send a message (SMS, e-mail or pop-up message) to customers informing them of how much it will cost to surf the net via their mobile devices when they use roaming services in addition to the alert message warning customers when they have used 80% of their agreed limit. 73 See, for example, International Roaming BEREC Benchmark Data Report April 2013 – September 2013, BoR(14)115, http://berec.europa.eu/eng/document_register/subject_matter/berec/reports/4622-international- roaming-berec-benchmark-data-report-april-2013-8211-september-2013 74 BoR(14)170, http://berec.europa.eu/eng/document_register/subject_matter/berec/reports/4787-report-on- transparency-and-comparability-of-international-roaming-tariffs 75 http://consumers.ofcom.org.uk/phone/mobile-phones/mobiles-abroad/check-your-phone-before-you-roam/ 76 https://www.accc.gov.au/consumers/internet-phone/using-your-mobile-overseas

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Box 3. Consumer protection: main provisions of the EU Roaming Regulation III

 An obligation for operators to automatically provide customers - via a messaging service - with basic personalised information about roaming tariffs for voice, data or SMS when they enter another EEA country or a country outside the EEA;

 The obligation for roaming operators to offer customers, free of charge, a service providing information on the accumulated consumption of roaming data which guarantees that the accumulated expenditure on that service does not exceed a specific monetary limit (EUR 50 by default per month excluding VAT by default applied to all roaming services whether within or outside the EEA area) after which the service is no longer provided;

 Customers should be billed on a per-second basis for all calls subject to a euro-voice tariff subject only to the possibility to apply a minimum initial charging period of no more than 30 seconds for calls made;

 Customers should not have to pay for receiving voice mail messages on a visited network while in EEA countries (they can be charged for listening to such messages);

 Customers should pay on a per-kilobyte basis and only for data services actually consumed.

 Customers are further protected by price caps in the form of ‘euro-tarrifs’ that limit the amount that operators can charge customers for making and receiving calls, for sending text messages and for using data.

 Customers are nevertheless able to choose alternative products to the euro-tariffs.

 Operators should take reasonable steps to protect their customers from paying roaming charges for inadvertently accessed roaming services, and they should make information available to their customers on how to avoid inadvertent roaming in border regions.

Source: http://ec.europa.eu/information_society/activities/roaming/regulation/archives/current_rules/index_en.htm

Box 4. ACCC advice to minimising roaming bills

 buy a SIM card that is aimed at overseas travellers. There are many international roaming or global roaming SIMs available

 use SMS rather than phone calls to keep in contact with people

 turn off any voicemail services or diversions you have  turn off data roaming or buy a pre-paid data pack  download a mobile phone usage app so that you can keep track of how much you are spending while overseas

 change your mobile phone settings to minimise the amount of data you use. For example, turn off features on your mobile phone or tablet that automatically use data, like ‘push’ notifications and automatic software updates

 try to avoid using mobile networks to access data. Instead try and use WiFi services where possible  tell family and friends that contacting you on your phone will be expensive, and that different ways of communicating, like email, may be better.

Source: https://www.accc.gov.au/consumers/internet-phone/using-your-mobile-overseas

68. In 2012, in the United States the CTIA, the industry wireless association, offered a series of commitments that would help eliminate the problem of bill shock by April 2013. The commitment

31 DSTI/ICCP/CISP(2014)6/REV2 included alerts when the devices of consumers without an international roaming plan register abroad, and thus charges for international usage may be incurred. All the major MNOs now provide alerts. The FCC also provides a guide for international roaming.77

69. Following up on the APEC “Guidelines for the Provision of Consumer Information on International Mobile Roaming”, the Asia Pacific Telecommunity (APT) International Mobile Roaming Working Group also developed guidelines in 2012 for regulators and for operators aimed at enhancing transparency of information.78 APT also adopted Guidelines for Regulators to Provide Information on International Mobile Roaming (IMR) Services aimed at suggesting what type of information regulators should make available to the public including informing consumers of the high cost of IMR and providing information on alternatives to IMR services. The guidelines also suggested that regulators should have a dedicated page on their website on IMR issues. A similar set of Guidelines for Operators to Provide Information on International Mobile Roaming (IMR) Services emphasised similar requirements to improve transparency by providing subscribers with information. The guidelines also suggested that operators provide subscribers with information highlighting differences in charging structures between IMR services and domestic mobile services, and how subscribers can deactivate part or all of the IMR services. The African Union, in September 2013, adopted guidelines which address transparency, bill-shock and substitutes for IMR services.79

70. Regional bodies, such as the Southern Africa Development Community adopted transparency guidelines in June 2013 for their member countries aimed at improving consumer protection and increasing the transparency of roaming prices through SMS notification when travelling.80 The MNO industry group, the GSMA, in June 2012, obtained agreement in Asia among 24 members to enhance transparency for customers when roaming. This initiative is limited to data roaming and includes sending SMS to customers to remind them of data roaming charges when they arrive in a foreign country, implementing a data spending limit and sending alerts when that limit was reached and temporarily suspending data services when the limit was reached.81 In Latin America the GSMA, working with 40 MNOs agreed in 2012 to implement by mid-2013 mobile transparency measures which included sending text messages to subscribers to inform them of data tariffs, implementing a spending limit and sending alerts when this limit has been attained.

71. In addition to the European Union's roaming regulations a number of OECD regulatory authorities have begun to provide information on their websites aimed at enhancing consumer awareness of high IMR prices and the steps they should take to prevent 'bill shock'. For example, OFCOM in the United Kingdom, has a page providing consumers with advice on roaming. 82 In 2013 Australia enacted the Telecommunications (International Mobile Roaming) Industry Standard which places obligations on MNOs to help prevent bill shock.83 MNOs are required to send an SMS warning to customers when arriving in another country. The SMS should contain roaming price information. Roaming customers must

77 http://www.fcc.gov/guides/wireless-world-travel-made-simple 78 APT Working Group Report, 15 May 2012, http://www.apt.int/sites/default/files/2012/05/APT_IMR_Working_Group_Report_Final.pdf 79 See, http://www.itu.int/en/ITU-D/Regulatory- Market/Documents/Roaming/AU_IMR_Guidelines_Regulators_FINAL.pdf 80 Transparency on Roaming Services Guidelines, http://www.crasa.org/tempex/doc_pub_eng86.pdf 81 http://www.gsma.com/newsroom/gsma-launches-data-roaming-transparency-initiative/ 82 OFCOM, http://consumers.ofcom.org.uk/phone/mobile-phones/mobiles-abroad/check-your-phone-before-you- roam/ 83 http://www.comlaw.gov.au/Details/F2013L01301

32 DSTI/ICCP/CISP(2014)6/REV2 also be warned once they have incurred AUD 100 (USD 87) of charges for IMR services. Customers with add-on roaming packs must be notified once the customer reaches 50 percent, 85 percent and 100 percent of the included value.

72. In Canada the regulator (CRTC) recently adopted a Wireless Code which contains provisions to protect and increase the awareness of subscribers of their data consumption when roaming. The Wireless Code requires MNOs to notify subscribers when they roam of associated roaming prices. MNOs also need to provide tools to customers to monitor roaming data usage and to suspend international data roaming once the bill has reached CAD 100 (USD 88), unless a customer explicitly consents to pay additional charges.84 Japan is tackling the issue of high roaming rates experienced by visitors to that country in a unique way. The aim is to promote access to mobile services in Japan by visitors on the same terms as Japanese subscribers. For example, through simplification of procedures to obtain Japanese SIM cards, providing information to foreigners on free Wi-Fi hotspots and facilitating access to free Wi-Fi. Japan has also revised the guideline that specifies that Japanese mobile operators basically have to unlock all smartphones and tablets sold from May 2015 if users request it and at no cost to users. This means that users who would previously have been tied to a specific mobile operator have the option to insert another mobile operator’s SIM cards such as the SIM card of a local operator in a visited country.

73. Chile has taken a different approach to consumer protection by requiring that international roaming needs to be explicitly enabled by a subscriber. When subscribers log on to activate international roaming the MNO is required to send a message confirm activation of roaming and providing roaming prices. In addition, the MNOs should inform users of data usage when roaming.85 Other initiatives by OECD national regulatory authorities include a 'roaming calculator’,86 by ComReg in Ireland, allowing users to calculate roaming costs before going abroad and many regulators have web pages providing advice to subscribers so that they are aware of high roaming charges and steps which should be taken to reduce roaming costs.87 Colombia has also adopted a regulation requiring an MNO to obtain the consent of the subscriber to activate roaming and is required to send an SMS to the subscriber proving information on the consumption of data services when roaming. MNOs can either provide subscribers a data plan with consumption limits or a fixed price plan valid for a period of time (daily, weekly and so forth) and must warn subscribers when they have consumed 80 percent of their data allocation.88

74. Many mobile operators have also reacted to the increased concern with high IMR prices to improve awareness of roaming costs and information on how to limit these costs as well as improving access to price information. For example, several MNOs provide 'data calculators' (e.g. AT&T, Telstra) to allow customers to estimate their likely data consumption before roaming in order to purchase the package which meets their requirements. Nevertheless, a number of MNOs have yet to improve transparency by facilitating access to roaming prices on their web sites or providing clear information on the potential data consumption of different applications and their cost.

Wholesale and retail price regulation

75. The earlier work by the OECD on international mobile roaming, as well as the work that has been undertaken by other organisations, regional bodies and countries have all reached similar conclusions,

84 See, CRTC, http://www.crtc.gc.ca/eng/info_sht/t14.htm 85 See, http://www.leychile.cl/Navegar?idNorma=1059429En 86 http://www.callcosts.ie/mobile_phones/roaming_calculator.293.LE.asp 87 See, for example, the Austrian regulatory authority, RTR, https://www.rtr.at/en/tk/RoamingAllgemein 88 CRC, Resolution 4424 2014. https://www.crcom.gov.co/resoluciones/00004424.pdf

33 DSTI/ICCP/CISP(2014)6/REV2 namely that retail prices for IMR are very high and bear little relation to the cost of the provision of these services.89 In addition, there has been general agreement that the high wholesale prices in many countries, the inter-operator tariffs (IOTs), are for the most part responsible for high prices. This seems not to be the case for the European Union, where data gathered by BEREC shows a certain level of competition on the wholesale market, though this follows regulatory intervention. There has also been recognition that a national regulator can only take limited measures to create effective competition in the market. Regulating IOTs, which national MNOs charge foreign MNOs, would have little or no effect on roaming prices faced by residents of that country in foreign markets. There is no incentive for a regulator to take such action unless the regulator in a visited country reciprocates.

76. The national regulator can intervene to reduce the retail prices charged by its national MNOs for IMR services provided in a visited country. This could provide an incentive for the national MNOs to try and negotiate better wholesale prices, in particular because lowering retail rates may subject them, as the Council Recommendation warns, to a price squeeze. The level of roaming wholesale charges, and the complexity or inability in many countries to reduce these charges through a competitive market process, while allowing for the recovery of roaming-specific costs, is one of the key issues facing policy makers for IMR charges. For this reason the European Union decided that it was necessary to institute regulated caps for roaming wholesale rates (IOTs), which appears to have contributed to some degree of competition as actual prices are below regulated caps.

77. There is insufficient transparency, however, on the wholesale IOT tariffs. The IOTs are transparent to the mobile operators but not to the regulators, so that they are unable to determine the evolution of the roaming market in terms of competition without access to wholesale rates.90 The work by the Body of European Regulators of Electronic Communications (BEREC), which provided the basis for European Union Roaming Regulations, helped shed light on roaming wholesale rates, including through the publication of data. The bilateral work by Australia-New Zealand on roaming also provided further information on wholesale rates and, as noted above, the CRTC in Canada is starting a process to collect wholesale rate information. The CRC in Colombia has begun to collect on a quarterly basis data from MNOs including IOT rates for voice, SMS and data, revenues of billed roaming traffic, the outgoing and incoming volume of roaming traffic and the volume of roaming by users.

78. In the past, for international long distance calls, transparency of international accounting rates played an important role in fostering competition and reducing prices for international long distance calls in the fixed voice market. The OECD, at that time, had played an important role in improving transparency of accounting rates. More recently these data, which are today only made public by the FCC, provide a key indicator to monitor the competitiveness of a market for consumers in the United States.91

79. Similarly, it has been common practice by telecommunication regulators to make public wholesale rates (interconnection/termination rates) and this has helped drive the process of creating more effective competition. Transparency of IOTs needs to be further promoted. As stated in the Australia-New Zealand Trans-Tasman Roaming Report "The information disclosed [i.e. wholesale rates] could “name and

89 Retail prices for IMR have not been subject to any regulation in the past so that there has been no cost orientation requirement imposed on retail prices. 90 The Global System for Mobile Communications Association (GSMA) has Standard Terms for International Roaming Agreement (STIRA) under which wholesale international roaming services are to be charged on a non-discriminatory basis and are transparent to all GSMA members on a confidential basis. In practice there is less transparency due to bilateral volume discounts, traffic redirection, shared billing platforms and so forth. 91 http://oecdinsights.org/2014/06/13/time-to-terminate-termination-charges

34 DSTI/ICCP/CISP(2014)6/REV2 shame” operators into more competitive offerings. It could also provide the Governments and regulators with information they may use to decide whether consideration of further intervention is necessary."92

80. As noted, retail prices have declined, in particular for IMR services within the European Union. However, for other roaming relations between OECD countries there is still scope for price reduction as there is for roaming between most roaming relations outside of the European Union region. Market dynamics have not been sufficient to lead to a reasonable level of prices. The existing regional (EU, GCC) and bilateral agreements on price regulation in other regions have been shown to be effective in lowering IMR charges and further agreements need to be encouraged where there is insufficient competition.

81. In the context of bilateral arrangements the CISP also prepared a paper which explored the principles that could form the basis for good practices in the establishment of international mobile roaming (IMR) agreements between two or more countries. 93 The report highlighted the need for bilateral agreements to include a mechanism to monitor compliance and enforcement, procedures for co-ordination and ensuring coherence in price reductions across participating countries.

82. A more efficient solution, however, would be a global agreement and, as argued in the OECD analytical paper the "...World Trade Organisation (WTO) framework could also be used to provide a cross- country legal framework for roaming services. Roaming services are arguably covered by the General Agreement on Trade in Services (GATS), since they are important for access to and use of public communications."94 The Council Recommendation invited member countries to liaise with the World Trade Organisation with respect to the trade implication of roaming services as well as with other international organisations with relevant interest or ongoing work on roaming services. In this context the Australian Mission to the WTO hosted a Symposium on International Mobile Roaming in March 2012 to provide WTO Members with more ample information on industry trends and possible regulatory solutions to address high mobile roaming charges. The OECD Secretariat participated in the meeting and presented the Council Recommendation.95 There has been no follow-up to the Australian initiative to date. The Secretariat also presented the Council Recommendation to the Internet Governance Forum, in Baku, in November 2012.

83. One of the Council Recommendations was to facilitate trans-national networks and alliances. The WTOs Basic Telecommunications Agreement has, as one mode of supply, commercial presence, which in principle should facilitate the setup of MVNOs in visited countries. Potentially, this would allow an MNO to bypass IOTs by terminating traffic within a visited country using that country's interconnection framework. At the same time, setting up alliances in a visited country could help reduce IOTs. This already occurs where multinational MNOs charge low roaming rates when traffic remains 'on-net', that is with an affiliates in a visited country. However, there is no need for such alliances to only be with affiliates. Such initiaitives would be in line with the Council Recommendation to facilitate access to wholesale mobile services on local terms and conditions. Examples given above in this document of the emergence of RLAH since the adoption of the Council Recommendation indicate that wholesale arrangements seem to be taking place which by-pass IOTs. The investment by Softbank of Japan in Sprint (United States) has also led to Softbank providing a limited form of RLAH.

92 Trans-Tasman roaming, Final Report, February 2013, page 52, http://www.dbcde.gov.au/__data/assets/pdf_file/0003/161274/TTR_Final_Report.pdf 93 OECD (2013), “International Mobile Roaming Agreements”, OECD Digital Economy Papers, No. 223, OECD Publishing. http://dx.doi.org/10.1787/5k4559fzbn5l-en 94 OECD, International mobile roaming services: Analysis and policy recommendations, DSTI/ICCP/CISP(2009)12/FINAL, March 2010. 95 http://www.wto.org/english/tratop_e/serv_e/sym_march12_e/sym_march12_e.htm

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Assessment of costs and benefits

84. In general it has become a well-established procedure for national regulatory authorities when taking action on IMR prices to assess the effects on MNOs and on subscribers of a number of policy options and to provide interested parties an opportunity to provide comments. The roaming initiatives that have been taken have followed this procedure before final decisions were taken. For example, the European Union prepared an assessment statement of the different policy options available and BEREC and the European Commission have conducted an impact assessment before each of the three Roaming Regulations.96 Further work was also undertaken to evaluate the costs and benefits of international mobile roaming by the European Parliament.97 BEREC, in December 2014, examined the risks and effects of the European Parliament's proposals on RLAH.98 The European Parliament's proposal made in April 2014 was to abolish retail roaming surcharges in order to allow customers to RLAH subject to a fair use limit. BEREC's conclusion was that the European Parliament’s proposals is not currently sustainable or feasible.

85. Monitoring price changes is a key element of the assessment of different approaches to the issues around international mobile roaming. This includes changes following regulatory intervention. The Council recommendation highlighted the need to assess “Potential effects on pricing behaviour, including possible waterbed effects or tariff rebalancing that may influence domestic mobile prices, or wholesale roaming prices faced by operators in countries without roaming price regulation;”. In Europe BEREC collects and publishes the average wholesale and retail prices for roaming calls made and received by EEA customers outside EEA. These data indicate a decline on average for this metric, most evident in the period from 2011-2012 onwards.99 At least for this single indicator it would seem that there has not been a waterbed effect. There are, however, examples of rising prices for this metric for some countries. In 2014, by way of example, Comreg reported that on average it cost EUR 1.34 per minute to make a call when roaming in non-EU countries, compared to just EUR 0.66 a year previous.100 The Irish regulator also found it cost EUR 0.77 per minute to receive a call, double the rate for the same time in 2013. Attributing such changes to a single factor is challenging. While some commentators look to a potential water bed effect others may note the proposed reduction from four to three MNOs in that market and the implications that has for competition.

96 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) 407 final}, Brussels, 6.7.2011, http://ec.europa.eu/information_society/activities/roaming/docs/impac_ass_11.pdf 97 How to Build a Ubiquitous EU Digital Society, http://www.europarl.europa.eu/RegData/etudes/etudes/join/2013/518736/IPOL- ITRE_ET(2013)518736_EN.pdf 98 BEREC, International roaming: analysis of the impacts of “Roam like at Home” (RLAH), BoR(14)209.http://berec.europa.eu/eng/document_register/subject_matter/berec/opinions/4826-international- roaming-analysis-of-the-impacts-of-8220roam-like-at-home8221-rlah, 99 Figure 24, BoR (15) 29, http://www.berec.europa.eu/files/document_register_store/2015/2/BoR_(15)_29_International_Roaming_BER EC_Benchmark_Data_Report_April-Sept.2014.pdf 100 Adrian Weckler, “Mobile operators hike roaming charges for Irish phones abroad”, 9 December 2014. http://www.independent.ie/business/technology/mobile-operators-hike-roaming-charges-for-irish-phones- abroad-30811246.html

36 DSTI/ICCP/CISP(2014)6/REV2

86. The Australia-New Zealand bilateral, as well, reviewed policies and their likely impacts.101 The GCC in considering extending its roaming regulation issued a consultation document examining various options and requesting comments.102 The CRTC in Canada undertook an assessment of domestic roaming arrangements in 2013 following this with a consultation procedure on whether there was unjust discrimination in wholesale wireless roaming.103

Are the dynamics of the international roaming market changing?

87. From 1 July 2014, as noted above, a mobile subscriber from a EU/EEA country visiting another EU/EEA country will be able to choose an alternative roaming provider in the domestic or visited country, if such offers are commercially available. There are two kinds of alternative roaming providers (ARPs) - those providing full services i.e. voice, text and data in the domestic country, and those local data roaming services (referred to as local breakout). The roaming subscriber would be billed directly by the ARP. This structural change has already started to have spill over effects outside the EU/EEA as Israel begins to examine structural measures.104

88. A significant commercial development, which also has the potential to change the dynamics of the international mobile market, is the introduction in October 2014 of a new range of iPads by Apple. These include a feature entitled “Apple SIM”. If obtained directly from Apple, this SIM-card enables consumers to choose, from the menu settings on their device, the mobile network they prefer to use for data. Consumers also have the option to purchase a carrier specific SIM-card from their operator, as they have always done, but these are not reprogrammable and changing a MNO would require inserting a separate SIM-card. In addition, carriers have the option of “locking” the Apple SIM-card” following a consumer selecting their network from the menu of participating MNOs. What sets Apple’s SIM-card apart, however, from one provided by an MNO or MVNO, is that it comes with a reprogrammable SIM-card that can be used, on unlocked iPads, to select a carrier of choice, together with whatever plans are offered by the participating carriers.

89. Apple’s approach could in the longer term provide consumers in all countries an additional option for mobile data roaming in that they could select a participating mobile network operator in a visited country and pay online for a short term roaming mobile data access without the need to change SIM-cards. At the time of launch, the choice of MNOs was limited to the United Kingdom's EE along with Sprint and T-Mobile from the United States, for SIM-cards obtained directly from Apple (Table 4). This means that an EE subscriber from the United Kingdom visiting the United States could either use EE to access mobile data when roaming or choose a short term service from one of the two United States MNOs. If more MNOs from different countries choose to support Apple's iPad SIM this could assist in fostering competition in the mobile data roaming market.

101 Trans-Tasman roaming, Final Report, op.cit., and Austrlian Governemnt, Department of Broadband, Communications and the Digital Economy, Regulation Impact Statement: Trans-Tasman Mobile Roaming, Public version, http://ris.dpmc.gov.au/files/2013/02/02-TTMR-RIS.doc 102 Consultation document concerning International Mobile Roaming (IMR) across the Gulf Cooperation Council (GCC) Region Issuing Party: Gulf Cooperation Council (GCC) Roaming Working Group, 04 September 2014,http://tra.bh/media/document/20140904%20- %20International%20Mobile%20Roaming%20%28IMR%29%20Consultation%20Document%20- %20vFBahrain.pdf 103 See, Telecom Notice of Consultation CRTC 2013-685, http://www.crtc.gc.ca/eng/archive/2013/2013-685.pdf 104 The consultation (in Hebrew) is here: http://www.moc.gov.il/sip_storage/FILES/5/3765.pdf and the accompanying documents (draft license amendments, service specifications, etc.) are here: http://www.moc.gov.il/44-he/MOC.aspx (last link on the page). An example of press coverage can be found here: http://www.globes.co.il/en/article-overseas-roaming-reform-in-6-months-1000963374

37 DSTI/ICCP/CISP(2014)6/REV2

Table 4. MNOs participating in “Apple SIM” at the time of launch

MNO Conditions

EE, SPRINT and T-Mobile (US) Customers obtaining the SIM-Card direct from Apple could swap between these MNOs in the United Kingdom and United States.

AT&T Available on the menu of providers from a SIM-card obtained directly from Apple but once activated the Apple SIM can only be used with AT&T and a new Apple SIM is required to change carriers in the future or when roaming.

Other MNOs in United Kingdom and Other carriers did not participate at the time of launch. United States

90. Non-United Kingdom or non-United States based consumers, with an iPad, can still use a physical SIM from the operator of their choice and when roaming can continue to use the services of their MNO or use a local SIM card in the visited country. Alternatively, iPad Apple SIM users, when visiting the United Kingdom or United States, can pay for data service from EE in the United Kingdom or one of the two United States MNOs with minimal switching costs and even the option to change between these operators as they see fit. As more MNOs sign on and participate on Apple's iPad, roaming data subscribers will effectively have access to a 'local breakout' service similar to that which the European Union regulations have put in place. Although, at the moment, the 'Apple SIM' is limited to data services, the widespread adoption and use of programmable SIMs on tablets, other wireless portable devices and eventually smartphones could result in a significant change in the roaming market. Such a change, given it results from a commercial rather than regulatory initiative, would also have the benefit in that it avoids intrusive regulation.

91. While price is only one factor used by consumers to assess carrier selection, it is one of the most important and having a menu of offers on a user’s device should make that element more transparent. The other major benefit for consumers is convenience. In many countries, consumers have to go through a series of steps to purchase a local SIM-card, which are not required if they roam with their home operator SIM-card or potentially through a reprogrammable SIM-card.

92. One way to look at the opportunity offered by the Apple SIM is that it empowers roaming subscribers in that they, rather than “home operators”, directly select the charges they pay for data roaming. In effect, consumers from both the United Kingdom and United States, when roaming in the other country, can disintermediate their home carrier such that the foreign operator treats them as one of their own customers instead of the customer of someone else. This disintermediation eliminates considerations between MNOs, such as the amount of traffic a foreign carrier can send to them, when negotiating wholesale rates. MNOs would have an incentive to compete for visiting roaming subscribers and their offers would be expected to closely mirror prices paid by domestic customers of that operator. They could also, however, introduce offers via the iPad menu. At the time of launch, for example, T-Mobile (US) offered a pre-paid USD 10 per 5 GB plan for use up to 150 days.105 This offer was only available via the Apple SIM-card and not the regular online store.

93. Although limited to two countries, at the time of writing, some examples can be given for potential price reductions. The very large price differences when using a local carrier in a visited country compared to a home network roaming plan are dramatic (Table 5). They underline the dysfunctional nature

105 http://i3.minus.com/jtvacK5701erq.jpg

38 DSTI/ICCP/CISP(2014)6/REV2 of the international roaming market and the issue that use of a technology, such as the Apple SIM may address. Some examples can be provided:

 A Sprint customer from the United States roaming in the United Kingdom could pay USD 40 for 40 MB of data and if they exceeded that amount and additional USD 10 per MB. The same user switching to a local offer from EE could use 1 GB for just USD 16. In other words, swapping carriers provides data at USD 0.016 per MB instead of USD 1 per MB.

 An EE customer from the United Kingdom visiting the United States would pay USD 5 or USD 16 for 20 MB or 100 MB respectively. On the other hand a prepay data option with Sprint of USD 15 would entitle them to the use of 1 GB. In other words, swapping carriers provides data at 0.015 per MB instead of USD 0.25 or USD 0.16.

Table 5. Prices for using local carrier instead of roaming

Domestic rates with local SIM-card Regular roaming Data Days Data Sprint Days Included Sprint Included Included EE (USD) (USD) included (MB) EE (USD) (USD) 30 100 MB 10 1 20 MB 5 30 1 GB 16 15 30 40 MB 40 30 3 GB 24 35 30 85 MB 80 30 6 GB 50 1 100 MB 16 30 12 GB 80 7 200 MB 32 7 500 MB 64 Source: Sprint and EE websites (22 October 2014)106

94. At present the Apple SIM-card is only available for data and only on the iPad (i.e. as opposed to also being on an iPhone for voice services). Nonetheless, a combination of over-the-top voice services and possibly devices (i.e. making and receiving calls over Wi-Fi) will likely add competitive pressure to the prices for traditional roaming via a home operator SIM-card.

95. This development also offers smaller networks and those operating in a single country an opportunity to overcome certain limitations. They no longer have to compete unevenly against players in their own market that can negotiate superior wholesale deals in foreign markets since they can provide their roaming customers with similar rates as paid by local consumers in a foreign market. This alone provides an incentive for the “challenger brands” or the single market players to enter into arrangements with companies, such as Apple and those that will likely follow. Meanwhile, by doing so, they place their offers squarely before customers, with iPad Apple SIMs, as they enter that country. This means they may give up little (i.e. high wholesale rates make them uncompetitive in foreign markets leading to low usage by their own customers of roaming) while potentially attracting new customers for their local services.

96. While Apple was the first manufacturer to include a reprogrammable SIM card in a tablet it has been rapidly followed by a number of other manufacturers including in smartphones. In December 2014, Huawei launched the “Honor 6 Plus”, a smartphone that includes a SIM card enabling access to data services in 18 countries without purchasing a local SIM card. The service enables users roaming from China to access unlimited data for USD 4.50 per day or USD 0.04 per MB for pay as you go (i.e. 20 MB blocks at USD 0.80). Meanwhile, in March 2015, Xiaomi introduced a “Roaming Card”, included in a smartphone, which also meant users did not need to purchase a local SIM in order to get cellular telephone

106 Sprint introduced new roaming offers in April 2015. http://www.sprint.com/landings/international-value- roaming/#!/ EE’s roaming information can be found at: http://explore.ee.co.uk/roaming

39 DSTI/ICCP/CISP(2014)6/REV2 and Internet services while abroad.107 At the time, Xiaomi Roaming Card was being tested by roamers in a number of OECD countries such as Canada, Japan, Korea and the United States.

97. The steps being taken my these Chinese smartphone manufacturers, in turn follow the integration of software defined SIM cards in small external devices by companies such as uCloudlink’s GlocalMe service, which was launched in May 2014.108 In this case, the device doubles as a reserve battery for a device such as a smartphone acting as a personal hotspot and connected to a cellular network when roaming. A roamer does not need to purchase a local SIM with the device determining which of 100 countries they are in at any given time and using a local cellular network. The device itself costs USD 129 after which GlocalMe says data can be up to 98% less than roaming rates. Customers can buy a pack for a specific country or a pack for countries on a pay as you go basis (Table 6).109 By way of example a user can roam in Chile or Luxembourg for USD 0.001 per MB or using a package in Korea at USD 0.013 per MB.

98. Apart from any differences in technology, the main thing that sets Apple’s approach apart from the one taken by the Chinese manufacturers is their business model.110 Apple’s approach enables MNOs to offer services at local rates and, therefore, for those MNOs to determine the prices for incoming roamers, with those being the same as local rates. Meanwhile, the Chinese manufacturers are acting as resellers applying whatever margin they add for retail services to wholesale rates. MNOs can, if they wish, not participate in Apple service but once they make wholesale offers to foreign MNOs these rates can be passed on to resellers. From a consumers perspective this enables the selection of a participating MNO in a foreign market using an Apple SIM. Alternatively under the approach taken by the Chinese suppliers, it enables the selection of a reseller that may be located in any country where MNOs have negotiated wholesale rates that permit competitive retail prices for roamers. Both possibilities hold out the potential to fundamentally change the international roaming market if these and other manufacturers build these capabilities into more smartphones and tablets.

99. Finally, Google’s Project Fi offers a further model where it is acting directly as an MVNO but enabling users to switch seamlessly between open Wi-Fi networks and the cellular networks of its two wholesale providers in the United States and MNO’s in other countries through roaming agreements. To achieve this functionality, Google has developed its own SIM-card, which can store 10 different network profiles for the Nexus 6.111 Project Fi will also store the telephone numbers of subscribers in Google’s data centres enabling them to be accessed on other devices besides smartphones when a user is roaming. When logged in they can send and receive texts, or make or receive calls, on computers, tablets or even other smartphones. With an effective rate of USD 0.01 per MB when roaming, Google’s price is competitive with or better than some MNO offers in visited countries, if a user purchased a local SIM, and much less expensive than the historical roaming fees when visiting those countries. While limited to 3G speeds this may be offset by the seamless nature of handoffs to open Wi-Fi networks when available.

107 Lin Li; translator: Thomas Hsu) ,“Xiaomi’s MIUI Now Features Virtual SIM Card for Overseas Travels”, 25 March 2015. http://technews.co/2015/03/25/xiaomis-miui-now-features-virtual-sim-card-for-overseas-travels/ 108 http://www.prnewswire.com/news-releases/glocalme-eliminates-international-data-roaming-charges- 259039241.html Other players offering a similar global roaming off includes Skyroam’s for USD 10 per day. http://www.skyroam.com/testen/product/default.shtml 109 http://www.glocalme.com/rate/showrate 110 See for example: http://glocalme.blogspot.fr 111 Michael Liedtke “5 things to know about Google's Project Fi”, The Associated Press, 4 May 2015. http://www.cbsnews.com/news/5-things-to-know-about-googles-project-fi/

40 DSTI/ICCP/CISP(2014)6/REV2

Table 6. GlocalMe rates for selected countries (USD, March 2015)

Pay as you go per Package 500 MB for 1MB price using 1MB 7 Days Package

Australia 0.054 13.07 0.026 Bangladesh 0.001

Canada 0.109 19.60 0.039 Chile 0.001

Costa Rica 0.001

Germany 0.054 16.34 0.033 Ghana 0.001

France 0.054 16.34 0.033 Italy 0.054 16.34 0.033 Japan 0.054 13.07 0.026 Korea 0.054 6.53 0.013 0.001

Luxembourg 0.001

New Zealand 0.109 19.60 0.039 Portugal 0.054 16.34 0.033 Spain 0.054 16.34 0.033 United Kingdom 0.054 10.89 0.022 United States 0.054 16.34 0.033 China and Hong Kong, China (3 GB 180 Days_ 29.16 0.009 Wordwide (1 GB 30 days) 31.32 0.031

Source: GlocalMe112

112 http://www.glocalme.com/rate/showrate and http://www.glocalme.com/package/showpackage

41 DSTI/ICCP/CISP(2014)6/REV2

ANNEX I. RECOMMENDATION OF THE COUNCIL ON INTERNATIONAL MOBILE ROAMING SERVICES

16 February 2012 - C(2012)7

THE COUNCIL,

HAVING REGARD to Article 5 b) of the Convention on the Organisation for Economic Co-operation and Development of 14 December 1960;

HAVING REGARD to the Resolution of the Council on the Seoul Declaration for the Future of the Internet Economy [C(2008)99] and the Recommendation of the Council on Broadband Development [C(2003)259/FINAL];

CONSIDERING that achieving a level-playing field for competition in communications markets and ensuring transparent and effective consumer protection and empowerment can bring significant benefits for consumers and businesses;

CONSIDERING the need, in the face of convergence across different technological platforms, to encourage effective use of broadband services in order to achieve effective competition in infrastructure, network services and applications;

CONSIDERING the need to enhance the awareness of consumers and businesses regarding the cost of international mobile roaming services, and the availability and benefits of substitute communication services and suppliers;

ACKNOWLEDGING that the measures implemented by Members will vary according to domestic circumstances;

ACKNOWLEDGING that any regulatory measures should take into account the principles of the Recommendation of the Council on Improving the Quality of Government Regulation [C(95)21/FINAL];

RECOGNISING the common challenges encountered by Members with regard to international mobile roaming services and the trans-national dimension of these services;

On the proposal of the Committee for Information, Computer and Communications Policy:

HAVING AGREED that, for the purpose of this Recommendation;

• “international mobile roaming services” (thereinafter “roaming services”) means the use of a mobile telephone or other device by a roaming customer to make or receive calls, to send or receive SMS messages, or to use packet-switched data communications, while in a country other than that in which that customer’s home network is located, by means of arrangements between the operator of the home network and the operator of the visited network; • “international mobile data roaming services” (thereinafter “data roaming services”) refers to the use of roaming services for the sole purpose of packet-switched data communications; • “mobile virtual network operator” refers to an operator that provides mobile communication services

42 DSTI/ICCP/CISP(2014)6/REV2

but does not have its own licensed frequency allocation of radio spectrum;

DETERMINED to take the necessary steps to ensure effective competition, consumer awareness and protection, and a fair price level in international mobile roaming services;

I. RECOMMENDS that, in establishing or reviewing their policies for roaming services, Members consider the following set of measures, which are presented from the least to the most interventionist:

Promoting awareness of roaming prices and substitutes

1. Members should promote awareness of consumers and businesses (thereinafter the “customers”) about the cost of roaming services and the availability of substitutes; and encourage them to compare the functionalities, limitations, distribution channels and cost of these various options.

2. Members should work with domestic communication providers to make this information easily available, particularly at the main points of entry and online.

Promoting transparent information on roaming services

3. Members should promote transparency of information provided to customers by international roaming providers regarding the use and billing of roaming services, through information provided at the point of purchase, personalised messages, general online information or any other cost effective means. In particular, customers should receive appropriate and timely pricing information.

4. Furthermore, data roaming customers should be provided with:

a) Information on the risk of automatic and uncontrolled data roaming connections and downloads and explanations about how to switch off these connections; b) Agreed financial limits, beyond which data roaming transmission would be stopped, unless the customer follows an indicated procedure; c) Where available, personalised notifications when data roaming services have reached a certain proportion of an agreed financial limit.

Facilitating trans-national networks and alliances

5. When assessing mergers and acquisitions in mobile markets, Members should examine the potential of trans-national networks to foster the emergence of roaming offers that could benefit customers. In the absence of wholesale regulation of international roaming markets, Members should also examine the potential of mergers to adversely affect the ability of mobile operators in other Members, to negotiate reasonable wholesale terms for roaming services.

6. With a view to promoting the overall interests of customers, Members should also assess and remove barriers that may prevent smaller players from competing with larger players to offer roaming services, in particular by forming trans-national alliances. In removing such barriers, Members should pay due attention that they do not protect inefficient operators, and that these alliances do not in fact reduce competition. Transparency of Inter-Operator Tariffs

7. Members should encourage discussions with the industry about the transparency of (headline or non- discounted) Inter-Operator Tariffs (IOTs) for international mobile roaming services in order to inform future or current regulatory proceedings in relation to these services. Members could consider collecting data on wholesale roaming rates (discounted IOTs) and publishing benchmarks of aggregate rates that preserve commercial confidentiality. If Members pursue such regulatory actions, consistent with the national approaches of each Member, and make wholesale price information public, Members should ensure that

43 DSTI/ICCP/CISP(2014)6/REV2 they neither reduce incentives for individual price cutting, nor foster parallel pricing behaviour.

Facilitating access to wholesale mobile services on local terms and conditions

8. Members should assess and remove barriers that may prevent mobile virtual network operators to have access to local wholesale mobile services for the purpose of offering roaming services on fair and reasonable conditions, bearing in mind the constraints for competition in domestic markets. They should also ensure, as appropriate, that mobile virtual network operators benefit from possible regulated wholesale roaming rates between operators in different countries when purchasing wholesale resale roaming in the home country, especially in those cases where mobile virtual network operators have to comply with regulated retail roaming charges.

Wholesale price regulation

9. Where possible, the determination of wholesale roaming prices should be left to the market. However, if Members determine that market dynamics are insufficient to produce reasonably competitive wholesale prices, they are encouraged to regulate wholesale roaming prices, including by reaching bi- or multilateral agreements between Members, as appropriate, and/or through the introduction of price caps based on commonly established principles. Members’ trade obligations, including WTO provisions and principles, should be observed when assessing the possibility of reaching agreements on wholesale price regulation.

Retail price regulation

10. If Members determine that market dynamics are insufficient to guarantee reasonably competitive retail prices they should, as a last resort, implement retail price regulation to protect customers from paying excessive prices for using roaming services. However, where possible, the determination of retail roaming prices should be left to the market.

11. Members should consider a wide body of evidence in setting the level of retail price caps and ensure that no margin squeeze arises as a result of regulated retail prices and high wholesale prices.

12. Those Members implementing wholesale price regulation in conjunction with retail price regulation should ensure the consistency of both approaches.

Assessment of costs and benefits

13. When assessing the appropriateness of introducing wholesale and/or retail roaming price regulation, Members should undertake an impact assessment which takes into account the following issues:

a) Potential effects on pricing behaviour, including possible waterbed effects or tariff rebalancing that may influence domestic mobile prices, or wholesale roaming prices faced by operators in countries without roaming price regulation; b) Elasticity assessment and overall net effect of imposing retail and/or wholesale price regulation; c) Likely benefits and drawbacks of such price regulation, including possible effects on investment, innovation and overall consumer welfare; d) Periodical review of the effects of the implemented measures, in order to adjust them accordingly.

II. INVITES:

1. Members to liaise with the World Trade Organisation concerning the trade implications of roaming services, as well as with other international organisations with relevant interest or ongoing work on roaming services.

2. Members to disseminate this Recommendation throughout the public and private sectors, including

44 DSTI/ICCP/CISP(2014)6/REV2 governments, businesses, consumer groups, civil society and other international organisations to encourage all stakeholders to take the necessary steps to improve the functioning of roaming services markets and empower and protect customers.

3. Non-Members to adhere to this Recommendation and collaborate with Members in its implementation.

III. INSTRUCTS the Committee for Information, Computer and Communications Policy to promote and monitor the implementation of this Recommendation and report to Council within three years of its adoption, and as required subsequently, to assess progress made.

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ANNEX II. QUESTIONNAIRE REGARDING THE IMPLEMENTATION OF THE COUNCIL RECOMMENDATION ON INTERNATIONAL MOBILE ROAMING SERVICES

Member countries responded to this questionnaire aimed at determining what actions have been undertaken, since 2012, which are relevant to the Council Recommendation. The questionnaire was considered in association with the main body of text in DSTI/ICCP/CISP(2014)6/REV1 which provides information on market developments and initiatives taken by member countries.

The Council Recommendation provided a menu of options for members to improve the situation, across the OECD area, after determining that price levels for international mobile roaming services were unreasonably high, particularly in view of the underlying costs. The causes for high roaming prices included the non-competitive characteristics of the roaming market which led to high wholesale charges and, in turn, in high roaming retail charges. The wholesale rates charged by foreign operators could account for up to three quarters of the retail rate. Other factors leading to high retail roaming prices included the fact that consumers did not take into account roaming services when choosing a bundled mobile offer, lack of market contestability and low consumer awareness of roaming prices. The document DSTI/ICCP/CISP(2014)6/REV1 highlights examples of new developments that deal with some of these issues against each of the menu tools in the Council recommendation.

The questionnaire was in two parts to minimise the burden. The first part dealt with general questions related to the Recommendation and the second part asked specific questions on each section of the Council recommendation. All delegations were requested to answer the first part of the questionnaire. Any country using any of the options from the menu of tools available, in the Council recommendation, was invited to provide further information based on the questions in the second part of the questionnaire.

A summary of the responses can be found below under each question. The full responses are in a spread sheet and available on the Clearspace site of the Working Party for Communication Infrastructures and Services Policy (CISP). Responses were received from 32 member and partner countries as well as the International Telecommunication Users Group. Also available on the CISP Clearspace site are the responses country-by-country for the Question on the use of principles in the Council Recommendation.

General Questions (please respond to all questions)

1. Is the Council recommendation still relevant?

The predominant view expressed was that the Council recommendation is still relevant with many countries simply responding “Yes” to this question -- for example Germany, Japan, Korea, New Zealand, the United Kingdom and the United States. A further example was Australia who said “Yes. Consumers increasingly expect a seamless transition between domestic use and international roaming, and international roaming charges can still be high compared to domestic fees.” Likewise Canada said “New regulation in Canada has improved the transparency and awareness of international roaming charges. Furthermore, a number of industry players have lowered prices and launched new offerings for international mobile roaming services. However, international roaming charges continue to be an area of concern for many consumers.” Denmark comments that the

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“OECD’s focus on roaming through the Recommendation and other documents has increased the focus on the global aspects of international mobile roaming; where it used to be discussed on a regional level (e.g. in the EU) it is now also treated as a global issue. We still find the Recommendation relevant.”

The Netherlands and Singapore said the Recommendation was relevant. Israel concurred saying: “Indeed, the Recommendation is still relevant. Despite the beginnings of “roam like at home” tariffs and the increasing importance of roaming substitutes, high roaming charges continue to be a barrier to trade and travel.” Colombia also responded: “Yes. Despite that IRS prices have been showing reductions progressively, the tools included in the Recommendations will continue to be relevant and the follow up of newer developments (i.e. unbundled contracts, RLAH plans and local breakout for data services abroad) will be very useful to the Members and non-Members, since these kind of solutions will help to deliver roaming services at fair and reasonable price levels.” Lithuania said, “Yes, the Recommendation is still relevant especially for promotion and encouraging operators from different countries (without prejudice to MVNO’s) to negotiate and reach competitive agreements on wholesale prices and to ensure retail price regulation between member states ensuring margin squeeze avoidance.”

In responding to the questionnaire as to the continued relevance of the Council Recommendation many European Union and European Economic Area countries noted that the European Union Regulations had gone significantly further than the OECD Recommendation. However, many also noted that for non-EU roaming destinations the Recommendation was still valid. commended: “In principle we believe that the Council Recommendation is a very useful tool in relation to all aspects of international mobile roaming service market although as regards Slovenian market the Regulation of the European parliament and of the Council on roaming on public mobile communications networks within the Union was adopted in June 2012 and includes the most topics from Council Recommendation.” Austria said, for example, “… the Recommendation is not that relevant, as there is a regulation (Roaming III Regulation) in place which covers the main points of the regulation for the EEA countries. Some of the requirements (especially the transparency measures) of the Roaming III Regulation are also applicable for roaming outside the EEA.” France said: “The EC Regulation (EU) No 531/2012 of 13 June 2012 on roaming on public mobile communications networks within the European Union (hereafter Roaming III) goes further than the OECD recommendation on international roaming regulation and imposes to European operators a series of wholesale and retail price obligations and transparency measures. As the situation has improved in Europe thanks to this Roaming Regulation, ARCEP considers that the OECD recommendation is still relevant and needs to be followed in the rest of the OECD area. In particular, the extra-EU roaming between EU operators and non-EU operators still needs to be improved.” Portugal commented: “The measures foreseen in the Recommendation were already covered by the EU legislation and were implemented in our country under the EU framework. Its relevance is therefore limited to the benefits that might arise from other non-EU countries implementing the measures in the Recommendation that have an impact on other countries, such as actions addressing bi- and multilateral agreements regarding wholesale price regulation between Members.”

Finally, INTUG said, “Yes. Roaming Charges continue to be a barrier to cross border trade and hence all countries should be encouraged to consider ways in which they can progressively reduce and then eliminate them.”

2. If still relevant, should the Recommendation nevertheless be modified and, if so, what issues should the revisions address?

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Respondents to this question fell into three broad groups. One group felt there was no need for any revision to the Council recommendation with others suggesting specific areas for changes or future work.

Australia said “No. The current menu of options are consistent with Australia’s approach of focussing on market solutions and increasing consumer awareness, with the option of direct regulation only if required.” Chile responded: “The main outlines established in the Recommendations are still relevant to date and are considered adequate, so that they don’t need to be modified.” The United States said: “No. We do not believe that it is appropriate for the OECD to address this issue again, as it has been thoroughly treated in a series of papers, and additional analysis would have low marginal value. We recommend, however, continued collection and publication of publically available wholesale and retail roaming voice and data charges in the OECD’s “Digital Economy Outlook.” Other countries that also considered no change was necessary included Latvia, Mexico, Switzerland, Turkey and the United Kingdom. Israel said they had no specific comment for change.

A number of EU and EEC countries, did not comment on this question including those that, under Question 1, said their primary reference point was EU regulation and that the OECD Council recommendation was consistent with the EU, implying they believed no change to be necessary (Austria, Czech Republic, Norway and Slovenia). Denmark more explicitly said: “The policy options in the Recommendation are in line with the ideas and principles behind the EU Roaming Regulation e.g. with regards to transparency measures and price regulations. In our view, these options are the most relevant. Thus, we do not see a need to modify the Recommendation.”

Finland used this question to reply to both Questions 1 and 2 highlighting that the EU regulation went further than the Council recommendation but did not recommend a change. Portugal did not recommend change but said if they were to occur they should be consistent with the EU framework. The Netherlands said “What changes would be necessary, are difficult to foresee. For all national regulation, the Netherlands follows the EU Roaming recommendation of 2011….”

A second group of countries suggested areas for future work though not necessarily changes to the Council recommendation. These included future work on an exchange in best practices in relation to alliances (Belgium); how increased transparency and new technologies can reduce retail prices as opposed to regulation (Hungary); potentially address the appropriateness of structural solutions (local break-out, decoupling) (New Zealand); and Singapore that guidance could be provided on how members can achieve recommendations in the area of IOT transparency and further consideration of “waterbed effects”. Sweden commented: “A lesson learned from the EU experience is that structural measures have a potential chance to create competition, but it must be based on transparent conditions and be given some implementation time.”

Japan said that only a small modification should be considered or set out for the subject of future work. It is related to wholesale regulation. In the Recommendation, it is mentioned that “However, .. Members are encouraged to regulate wholesale roaming prices on commonly established principles.” Japan says, however, that it is not clear what those “commonly established principles” are and there are no such principles so far. Therefore, they believe that the Recommendation should more emphasis on establishing such principles, and if possible, this should be clarified in any revision. Korea noted that “Regarding wholesale/retail price

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regulation, measures to address differences between countries with and without such regulation are necessary.”

Germany said “The Recommendation should be updated, i.e. take account of the latest legislative developments in the EU (i.e. the implementation of a roam-like-at-home regime etc.) as well as technological developments that have recently occurred and potentially creating competition.” Spain said that in its experience based on data collected by BEREC, for European operators, the wholesale prices being the main cause of high retail prices are no longer true and has to be updated accordingly. Lithuania contributed, “Today, as we know, in all EU countries, the only Lithuanian domestic operator is offering mobile data services using an LBO solution. In our opinion, to ensure member states to promote such availability of substitutes would be recommended, because of benefits it gives to customers.”

Italy commented: “In our view, any prospective review of the Council Recommendation should aim at covering the issue of data roaming traffic, taking into account the new emerging requirements stemming, inter alia, from the Internet-of-Things (IoT), as well as the need to support the permanently connected devices. In particular, connectivity for the IoT might be considered within the future roaming framework in order to address the so called permanent roaming and the change of the connectivity provider by means of the Over The Air SIM (Subscriber Identity Module) configuration as well as the Local data Break Out (LBO) techniques that enable the use of the same SIM and the provision of data roaming services directly on a visited network by an alternative roaming provider. Special consideration of global connectivity and procedures for the SIM configurations could also be addressed in this context (see “Machine-to-Machine Communications: Connecting Billions of Devices”, Digital Economy Papers, No. 192, OECD Publishing, 2012). In addition, the Council Recommendation may also address some of the implications of the current EU roaming Regulation, which results in imbalances in revenue streams and cost streams due to inbound and outbound roaming, preventing the implementation of more balanced offers as well as tariffs approximating the Roaming Like At Home behaviour.”

France commented: "On transparency measures on retail price, OECD could recommend that roaming providers provide the customer, automatically by means of a Message Service, when he enters a country other than that of his domestic provider, with basic personalised pricing information on the roaming charges that apply.” They added “OECD could recommend that in case of regulatory obligations wholesale caps should take into account underlying cost of provision. In particular, the levels of mobile termination rates in the area subject to the Roaming Regulation. Nevertheless, it should be mentioned there is no need nor relevant justification for strict cost orientation obligations, with tariff strictly set equal to the level of costs.” Finally they said “On assessment of costs and benefits, OECD could add that in case of wholesale price regulation underlying costs of provision need to be estimated to avoid loses for the visited operators. It would be helpful to develop a better understanding of current wholesale pricing schemes and competition dynamics at specific area level in order to better spot the competitive insufficiencies and identify the appropriate level of regulatory constraint to be used.”

3. If still relevant, should there be any further reporting back to Council on its implementation and, if so, under what timeline?

Several countries felt there was no need to report back to Council a further time including Chile, Mexico, Latvia, Switzerland and the United Kingdom. Spain said it was not a priority for them especially given the data made available by BEREC. The United States said there was no need to report back to Council and referred to their response under Question 2 to the effect that any

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monitoring could be done as part of the Digital Economy Outlook. Japan said there was only a need to report back if the Council recommendation was modified.

Countries that said further reporting to Council was welcome included Australia, Canada, Colombia, Denmark, Finland, France, Germany, Hungary, Israel, Italy, Korea, Lithuania, New Zealand, Portugal and Turkey. INTUG also expressed this as its preference. These countries had different preferences for the time periods for any reporting with the most common being a further three years.

Australia said, “Yes. The international mobile market continues to evolve with regards to consumer options and market competition, both retail and wholesale. In this context, reporting on at least a two yearly basis could be useful.” Canada said “To more fully understand the developments in the global telecommunications sector, further reporting should be made to Council on the implementation of the Recommendation. As the sector is dynamic, the three year timeline remains appropriate.” Finland noted: “This kind of reporting is ok. EU has several reports on roaming services.” France responded: “It is still relevant to have an update of roaming market situation in OECD members area and the implementation of OECD Recommendation. A period of 3 years after the new recommendation should be sufficient to analyse its effective implementation.” Denmark said: “The international mobile roaming market is a market that is developing rapidly. Therefore, we would like to see continued monitoring of the implementation of the Recommendation. A new report of the implementation in another three years time would be a reasonable timeline.”

Germany commented: “A further reporting back to Council seems to be an efficient instrument to monitor and evaluate the developments taking place in the international mobile roaming markets amongst the OECD members. As such, it provides a valuable overview and identifies worldwide trends and useful insights for policymakers and national regulatory authorities regarding the future way of international roaming. In the light of the discussions taking place on the most relevant European level around the possible introduction of a regulation enabling a “roam like at home” (RLAH) scenario a follow up on those (regulatory) developments seems worthwhile.” Hungary suggested to report/revise the Recommendation in every second/third year while Israel requested an annual report to Council. Italy said: “In view of the prospective review of the Recommendation, a periodical implementation report would be useful (e.g. a standard three years’ term, i.e. in 2015 could be appropriate); in taking stock of the implementation of the Recommendation, the relevant working group may usefully consider also any relevant developments relating to the roaming market regulation at EU level, i.e. any developments around the “Telecom EU Single Market” and, in the near future, the EU electronic communications regulatory framework review.” Korea contributed: Further reporting is required as many countries, except those in Europe, have not yet fully implemented the Recommendation, and the deadline can be extended by around two years.” New Zealand recommended reporting to Council every five years. Portugal highlighted wholesale agreements as an area of interest for reporting. Turkey said three years for reporting was appropriate while Lithuania prefers annual or half yearly reporting. Colombia said: “We consider that a report on the experiences regarding the development of any measure will be useful for those members that have not yet implement it; this is, a report on the main outcomes such as how the measure was implemented (regulation, self-regulation, etc.), copy of the documents and norms issued, timeframes, how to conduct impact assessment, main obstacles encountered, etc. This could be reported to Council quarterly or when a new development has taken place. It is of special interest and importance for Members to be aware of other members experiences, especially regarding assessment of cost and benefits (Recommendation No. 13). With the aim of making progress in wholesale and/or retail roaming price regulation assessments, we suggest that members’ findings (results of points a, b, c, d of this recommendations) on the subject should be reported to Council and subsequently shared with members and non-members.” Finally, INTUG replied “Yes. Council should be informed of the

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trend in roaming charges in OECD Member countries by a further analysis and data collection, which includes the impact on data volumes following reduction in Roaming charges.”

4. Can you indicate the most important developments in your country that made use of the menu of options?

Australia reported that they have “…put in place an international mobile roaming industry standard, requiring that providers of roaming services give consumers information upon arrival at their overseas destination and provide tools to allow them to monitor their usage and control their spending while roaming. In addition, to potentially address pricing and competition issues in international mobile roaming markets, the Australian Government is considering draft legislation. This draft legislation, if approved, would empower the Australian Competition and Consumer Commission (ACCC) to, where necessary and where bilateral agreements have been entered into, take coordinated action pricing action with other countries. This need for this draft legislation is being considered in the context of recent market trends, with an initial focus on the Trans-Tasman roaming environment." New Zealand commented: “In February 2013, the New Zealand and Australian governments agreed to introduce legislation that would give the two countries’ regulators additional powers in respect of international mobile roaming services, including the ability to impose wholesale and retail price caps.”

Belgium reported "Since the Roaming III Regulation was laid down; newspaper articles have contributed to creating more awareness of roaming prices and the measures that were taken by the EU to improve the transparency to the customer. The EU regulation facilitated improvements on many aspects within the EEA, of which: Promoting the awareness of roaming prices; Promoting transparent information on roaming services; Facilitating access to wholesale mobile services on local terms and conditions. As mentioned before, much is still much progress to be made when it comes to using roaming services outside the EEA. However, we believe that it is very drastic to impose price caps on the retail level."

Canada noted it had “…. introduced the Wireless Code in 2013 which includes stipulations that a service provider must notify the customer, at no charge, when their device is roaming in another country, and that the notification must clearly explain the associated rates for voice, text messaging, and data services. The Code also dictates that service providers must suspend national and international data roaming charges once they reach CAD 100 within a single monthly billing cycle, unless the customer expressly consents to pay additional charges.”113 Denmark said: “As a EU Member State, the most important development of roaming policies in the last years have been the third round of EU roaming regulations. As noted previously, the EU Roaming Regulation is in line with the OECD recommendation. For example, the current 2012 EU Roaming Regulation expanded the transparency measures so they now also apply outside the EU e.g. the cut-off data limit to prevent bill-shock. As you know, a new regulation to follow up on the 2012 regulation is being negotiated at this time in the EU. In October 2014, the Danish and Chinese governments signed a Memorandum of Understanding on lower roaming tariffs.”

Chile said “A new Regulation of Telecommunication was established, in which is several obligations associated with international roaming services were made, such as default blocking of mobile services, providing of accurate information of roaming prices, sending an alert message to inform users of roaming services when crossing national borders, among other.”

113 The Canadian Radio-television and Telecommunications Commission’s (CRTC) Wireless Code can be accessed at: http://www.crtc.gc.ca/eng/info_sht/t13.htm

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Germany responded: “The menu of options provided in the “Recommendation on international mobile roaming services” (C (2012)7 has mainly been implemented with the Regulation for roaming services inside the EU EEA area first introduced in 2007 (first roaming regulation) and with the revised roaming regulation of 2009 (second roaming regulation). Details of the current Regulation No 531/2012 of the European Parliament and of the Council that entered into force on 1st July 2012 (third roaming regulation).” Hungary said: “The Hungarian regulation fully complies with the rules in force of the EU on roaming (531/2012/EC). According to this, the Hungarian legislation facilitated the access of the wholesale mobile services with structural instruments, enhanced the transparency by publishing a tariff-comparison program on the NRA’s website (TANTUSZ)1, and regulated the rights of users in order to avoid the ’bill shock’. Furthermore, the NRA largely enforces wholesale and retail tariff caps regulated at EU level.”

Israel noted that “… has been active in signing memorandums of understanding with other governments to support paragraph #5, facilitating trans-national networks and alliances. In addition, the regulator has published for consultation a series of consumer protection measures designed to strengthen the points mentioned in sections 3 and 4.” Italy said: " The most important developments have been achieved on the following menu options: promoting transparent information on roaming services; wholesale price regulation; and retail price regulation. The enforcement of the EU Roaming Regulation has resulted into the following important developments: adoption of the EU tariff, automatic notification and tools for the reduction of in adverted roaming, anti-bill-shock notification, wholesale roaming access provisions, resale of wholesale roaming access provision (to support MVNOs), decoupling provisions, etc.." Japan said: “Promotion of providing information to customers who use roaming services. Based on the Telecommunications Business Act Article 26, obligations are imposed on telecommunications carriers etc. to explain an outline of the charges and other terms and conditions on telecommunications services including international roaming services that consumers should at least understand when they intend to conclude a contract or act as intermediaries. In addition, national companies’ voluntary action is also progressing (see “Promoting transparent information on roaming services” for more information).” Korean note: “Since roaming prices in Korea had been relatively low due to the requirement for domestic telecom service operators to obtain approval when entering into international roaming agreements, the government replaced the approval system with a notification system in 2014.” Mexico indicated it had not taken specific action to date and Portugal referred to its response to Question 1 on the implementation of EU regulation as did Spain and Sweden. The United Kingdom “…has taken a number of actions to implement the EU Roaming Regulation which are consistent with the items on the menu of options related to Promoting awareness of roaming prices and substitutes and Promoting transparent information on roaming services.”

Switzerland noted some reforms introduced in the lead up to the Council Recommendation: “First, mobile operators must notify their customers, in writing and in an understandable way, at the time of conclusion of the contract, how and where they can be aware of tariffs and tariff options available to reduce prices. Second, when passing over a mobile network abroad, they must inform their customers immediately, free of charge and understandably, the maximum cost of the following international roaming services: calls to Switzerland, incoming calls, local calls, sending SMS and data transmission.” They said since then there had been no major changes considered until very recently as it would have required a partial amendment of the Telecommunications Act, which had previously been considered unnecessary. They added: “Following the publication of the Federal Council (executive ie) in November 2014, a third report on the evolution of the telecommunications market and legislative issues that this raises, it was decided to revise the Telecommunications Act to include provisions that address the identified problems. The administration has been mandated to prepare a draft amendment to the law. Under current practices, it should analyse, albeit in simple terms, the economic impact of the proposed regulations.”

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The United States responded it: “…has not taken actions specifically in response to the Council Recommendation. The FCC has taken a series of actions related to roaming—primarily but not exclusively domestic roaming—over a number of years. Some of these predate the Recommendation, and others had an origin independent of it. However, certain FCC actions are consistent with “Promoting awareness of roaming prices and substitutes,” and “Promoting transparent information on roaming services.” In addition, the FCC routinely considers (domestic) roaming issues when evaluating proposed mobile mergers and acquisitions.”

Colombia said: “We have made developments in the following areas of the Recommendation: a) In promoting transparent information on roaming services: By issuing of the Resolution CRC 4424 in February of 2014, the regulator updated the rules and conditions of IRS and established new obligations for mobile operators to raise consumers awareness on the conditions and costs of international roaming services. b) Regarding transparency of information provided to customers: international roaming providers must provide accurate, timely and appropriate information on pricing and billing. Additionally measures has been introduced to implement financial limits, beyond which data roaming transmission would be suspended, unless specifically authorised by the customer, including personalised notifications when data roaming services have reached an agreed financial or consumption limit. c) In transparency of Inter Operator Tariffs: by, in a first stage, collecting data on wholesale roaming rates via Resolution CRC 4424 of 2014 in a quarterly reports. This information is under analysis together with information on traffic and users billing to estimate retail tariffs. d) In reaching bilateral agreements in the region oriented to reduce retail tariffs, as well as to gather mutual information to assess possible introduction wholesale and retail roaming prices.”

Latvia indicated: "1st option (Promoting awareness of roaming prices and substitutes) and 2nd option (Promoting transparent information on roaming services) of the Council Recommendation are defined in article 15 (Transparency and safeguard mechanisms for retail data roaming services) of the EU Regulation 531/2012. 3rd option (Facilitating trans-national networks and alliances) 4th option (Transparency of Inter-Operator Tariffs) and 4th option (Transparency of Inter-Operator Tariffs) of the Council Recommendation are no longer significant since the EU Regulation 531/2012 corrected the absence of wholesale regulation in particular article 7, article 9 and article 12 regarding wholesale charges for roaming calls, SMS messages and data roaming services. 5th option (Facilitating access to wholesale mobile services on local terms and conditions) of the Council Recommendation is determined in the article 3 of the EU Regulation 531/2012 where it is determined that mobile network operators shall meet all reasonable requests for wholesale roaming access. 6th option (Wholesale price regulation) of the Council Recommendation are determined in the article 7, article 9 and article 12 regarding wholesale charges for roaming calls, SMS messages and data roaming services of the EU Regulation 531/2012. 7th option (Retail price regulation) of the Council Recommendation is determined in the EU Regulation 531/2012 and in particular in article 8, article 10 and article 13 regarding retail charges for roaming calls, SMS messages and data roaming services. In the context of 8th option (Assessment of costs and benefits) of the Council Recommendation note, that before the adaption of the EU Regulation 531/2012 an impact assessment has been carried out."

Lithuania contributed: "One of our domestic operators started offering incoming call service free of charge in Baltic region countries and a fixed rate charge for data services. Customer gets amount of data that can be downloaded to his device and after specific amount of MB was reached, customer still can continue using data services and free of charge. The principle of this option is that customer pays one charge per diem for unlimited services. Services are offered by one domestic operator which belongs to the group of operators of the same shareholder. Another development is LBO solution already mentioned before, were cheaper services can be offered at the special rate per diem to customers despite the country of their domestic operator. "

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Singapore reported that measured had been implement by IDA, the communications regulator, in two areas of the Recommendation, namely on “Promoting awareness of roaming prices and substitutes and promoting transparent information on roaming services” and on “Wholesale price regulation and retail price regulation.” Finally INTUG said: “INTUG is an international association, but is aware of many developments globally, especially within the EU, where there was a commitment to eliminate Roaming charges within the EU by end 2015, although this may now be delayed.”

5. If not utilised can you point to developments, since 2012, that made it unnecessary to use the menu of options (e.g. first development of “roam like at home offers” or other examples mentioned in DSTI/ICCP/CISP(2014)6/REV1)?

Belgium indicated: “BEREC publishes a yearly report (link below) which collects information on the transparency and comparability of the different retail roaming prices that are offered by the operators. This report shows that much improvement has been made since the past two years. Most operators report that they provide extensive information on conditions and prices for each tariff on their websites and inform customers about tariffs. However, the responses indicate that a big number of operators do not inform their customers when they reach a time or volume limit and how services are charged when the usage has reached this limit. Once a customers get a ‘bill shock’, he/she will always be afraid to using roaming services in the future. It is very important to protect customers from high bills by obliging operators to send an SMS when a certain level of costs for roaming services is reached. Chile said: “The menu of options has been useful and utilised in our current regulations regarding International Roaming prices and services.”

France commented: “"The three successive Roaming Regulations in Europe have imposed a series of obligations on retail and wholesale levels to European roaming providers that go further than the OECD Council Recommendation. As it was observed a lack of competition on roaming wholesale markets, wholesale price cap regulation has been applied allowing operators to reduce their roaming- out charges in order to offer low retail roaming tariffs to their customers.114 But, due to the very low demand elasticity, lower wholesale caps did not result automatically in lower rates for retail customers. It is the reason why is was decided to also impose a retail price regulation. In Roaming III, the wholesale euro caps have been yearly reduced until 1st of July 2014. In particular, the step- by-step reduction of wholesale voice cap was allowed thanks to the imposition of pure LRIC mobile termination rates by European NRAs and the wholesale data cap by the decrease of costs per Mb resulting of the development and roll-out of 3G and 4G mobile networks. The difference between retail and wholesale caps was superior to 200% to allow economic space for decoupling obligation. Moreover, competitive dynamic has been increasing over the recent years on wholesale level at European level especially on data service. So the wholesale charges for French operators to provide intra-EU retail roaming services to their customers has decreased. So, thanks to this reduction of roaming charges and the level of competition at retail level, since January 2014, all the four metropolitan French operators and some full-MVNOs have started to include roaming volume in some of their offers and launched, therefore allowing their clients to “roam like at home” up to a certain volume. Nevertheless, the imposition of RLAH obligation at retail level raises many questions for the wholesale regulation (see BEREC Analysis of the impacts of “Roam Like at Home” (RLAH) - URL below). There are ongoing discussions at European Council on the Telecom Single Market proposal.”

114 http://berec.europa.eu/eng/document_register/subject_matter/berec/opinions/4826-international-roaming- analysis-of-the-impacts-of-8220roam-like-at-home8221-rlah

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Hungary commented: "The next milestone in the roaming regulation will possibly be the introduction of “Roam Like At Home” (RLAH) type of services, and if it is achieved, it will simplify the situation both of users and service providers. The issue of amending EU roaming regulation is still an ongoing process. The RLAH plays an important role in the preparation of the new legislation, but given that neither the text of the decree is finalized, nor its impact on the market is known, we think that the menu of options of the OECD recommendation is still relevant, and we would decide about the issue upon the next revision." Israel indicated: "Roam like at home services have begun to be offered in Israel.” Korea added: “Major telecommunications operators in Korea provide flat data roaming rates (e.g. SK telecom’s T-Roaming Data Unlimited One-Pass, KT’s Olleh Unlimited Data Roaming Service, and LGU+’s Unlimited Data Roaming Plan) and the per-day data roaming rates are between USD 8 and US$ 9. They also have limited data plans (e.g. 10, 20, 50, 100, 150, 300MB) and currently offer 10MB for about USD 9, 100MB for USD 27, and 300MB for USD 45.”

Portugal said: “The EU Regulation nº531/2012 on roaming within the Union (usually called RRIII) currently in force covers all the options listed in the OECD Recommendation and therefore the measures foreseen in the Recommendation have been implemented within the remit of the mentioned Regulation.” Denmark said: “Except for the signing of a Memorandum of Understanding with China, Denmark has not taken any unilateral actions with regards to roaming policy. However, the European Roaming Regulation applies in Denmark.”

The United Kingdom said that “Since the Recommendation, a greater range of mainly intra-EU mobile roaming offers have been introduced to the UK market, such as Three’s “Feel at Home” RLAH-like offer for data and voice calls and SMS back to the home Member State, and specific add-ons, e.g. by 02, EE and Vodafone, where customers can either purchase discreet bundles of roaming data or minutes or where, for a daily charge, they are allowed to use their domestic allowance for intra-EU roaming.”115

The United States said: “There is significant domestic roaming in the U.S. Retail prices have not been a problem, since typically there is no additional charge, but rather such roaming is treated like on-network activity and included in the on-network voice and/or data service bundle. The FCC has addressed wholesale domestic roaming disputes, however, in a number of orders, dealing with voice roaming and data roaming separately because of the differing legal foundations for regulating mobile voice and mobile data service in the U.S. In 2007, the FCC clarified that automatic voice roaming is a common carrier obligation, and must be provided to other carriers upon reasonable request, and on just, reasonable and non-discriminatory terms. It also found that there was insufficient evidence to justify regulating carriers’ wholesale roaming rates, however stated that if voluntary agreement was not possible it stood ready to resolve individual disputes case by case. In 2011, the FCC ruled that data roaming must be provided “on commercially reasonable terms and conditions.” And it clarified procedures under which it stood ready to resolve individual disputes that the parties could not resolve voluntarily. Finally, in 2014, the FCC provided additional guidance on how it would evaluate data roaming disputes. The FCC has not addressed, or as yet been asked to address, on whether there is an international roaming market failure, or whether any retail or wholesale regulatory remedies

115 O2 Travel and Vodafone’s Euro Traveller products were launched in the summer of 2012- they both allow consumers to use certain aspects of their domestic allowance abroad within the EU, although the charging structure is different for both. Three launched its “Feel at Home” plan at the end of 2013 and has widened the countries available several times since. EE launched a roaming add on to domestic allowances (increasing transparency of roaming) that allows consumers to make calls, text and use data from their UK allowance while they roam within the EU and in several other countries too. There are also a number of data and voice bolt ons, both for EU countries and outside and the number of countries covered has increased in recent years. Vodafone launched its World Traveller product in July last year and this also allows the consumer to use their domestic allowance in certain countries outside the EU.

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would be in the public interest. To date, the U.S. response to concerns about international roaming has been to focus on consumer information and protection. In a broad proceeding on bill shock, the FCC considered the issue of bill sock arising from international roaming specifically. This resulted in a voluntary commitment by the U.S. mobile operators to notify consumers without an international roaming plan whose devices have registered abroad that they may incur charges for international usage. In addition the FCC has posted on its web site various versions of a consumer tip sheet on international roaming.

Colombia indicated they “…consider that the set of measures in the council recommendations are all useful and should be adopted sometime in the roadmap to protect users, and progressively the structural solutions will become the final options.” Meanwhile INTUG noted that “Roam like at home options continue to be one mechanism for reducing the impact of Roaming charges, and Local Break Out, as required within the EU, could be considered as a form of this option.” And Finland said: “TeliaSonera offers one subscription (Sonera Sopiva) in Finland which includes calls, SMS and data in Baltic and Nordic countries with the same tariffs as domestic traffic. Here TeliaSonera utilised its own networks in these countries.”

6. Please provide any other comments you would like to make in relation to the Council Recommendation and developments in international mobile roaming in your country or internationally.

Australia commented: "The need for regulatory intervention in Australia, particularly at the retail level, has decreased as retail competition has driven down retail international mobile roaming pricing and had some impact on wholesale roaming pricing. For example, Australians can now access unlimited voice calls and SMS, and reasonable data allowances in New Zealand for as little as AUD 5.00 per day. Data prices per megabyte (MB) have dropped from AUD 3.00 and over per MB to AUD 0.10 or less per MB on some plans. In addition, there has been an increase in the availability of passes/packs and “roam like home” packages, particularly to post-paid consumers. The availability of alternative technologies to substitute roaming, including international WiFi access, has also increased."

Belgium said: “The work and monitoring of the Working Group is very useful, it is good to have an overview of roaming alliances and to share best practices amongst different regions and member states.” France noted: “Thanks to EU roaming regulation and wholesale competition, ARCEP notices a trends towards the inclusion of intra-EU roaming in mobile tariff plans. Nevertheless, as wholesale tariffs (IOT) between French or EU and non-EU operators are still high, it will be challenging for French operators to include extra-EU roaming in their offers. ARCEP is aware that these high tariffs are due to a number of factors as the level of international MTR, the cost of Mb and the lack of competition at international level.”

Germany added: “With regard to international roaming developments two main aspects can be identified occurring recently: First of all there is the aforementioned EU roaming regulation, which regulates the roaming services (voice, SMS, and data) across the EU EEA area. In this field a further decrease of prices on the retail and wholesale level have taken place (price cap regulation with a decreasing glide path) as well as provisions to protect end-users from high bills (e.g. transparency rules, mechanisms to avoid “bill shocks” etc.). Furthermore, the current roaming regulation provides for the possibility for consumers to select another provider for international roaming services than for domestic services. These so-called “structural measures” or “decoupling” allows operators to offer international roaming services separately from domestic services (Single IMSI). Another decoupling measure allows consumers to select an operator in a visited network for just data roaming. The latter is called local-break-out (LBO). These measures were meant to further foster competition

56 DSTI/ICCP/CISP(2014)6/REV2 in the international roaming market. Secondly, one can observe technological developments and innovations such as the “Apple SIM” (universal SIM card not connected to a specific operator) challenging the status quo of roaming markets and their players with the potential of eventually leading to a new competitive environment. Finally, more and more mobile operators introduce new tariff options offering “RLAH services” and in most cases these offers still a one-off or regular surcharge (e.g. daily/weekly/monthly flat fee). It is likely that operators in the EU EEA anticipate the possible introduction of a “roam like at home” scenario in the regulatory framework for roaming services at the European level (currently being discussed in the Council Working Group).”

Hungary stated: “If the EU regulation proves to be successful, we would consider to incorporate the main principles of RLAH regulation into the OECD recommendation.” Japan said: “In June 2014, Ministry of Internal Affairs and Communications of Japan announced an action plan aiming at realizing an ICT usage environment which is selectable, easy to use and high-quality to enable foreign visitors to use the world’s highest level of ICT in Japan smoothly. Based on this action plan, the Ministry started bilateral consultations to make international roaming rates cheaper with some countries.” Korea added: “International policy cooperation and coordination is needed for the development of international mobile roaming services as an individual country’ policy will likely be ineffective without cooperation between countries.”

Mexico noted that IFT is part of the project “Armonización Regional De Los Servicios De Roaming De Telecomunicaciones Móviles.” of the Latin American Forum of Telecommunications Regulators (REGULATEL). It noted that the predominant player needs to provide international mobile roaming for MVNOs.

Norway contributed: “Norway and the Norwegian mobile operators signed an MoU with Russia January 2014 with the aim to reduce roaming charges between the two countries.” Spain said: “The most interesting OECD input for us in the information of advances in non-European markets (implementation of RLAH tariffs by operators, use of reprogrammable and virtual SIMs ).” The United Kingdom contributed: “It should be noted that a large number of consumers do not travel abroad and therefore are not attracted by such roaming offers. In addition, Ofcom has been concerned by unexpectedly high bills caused by use of unauthorised use of lost/stolen handsets both domestically and internationally. We expect UK MNOs to establish a voluntary liability cap for unauthorised use (similar to the sort of protection that applies to unauthorised use of debit/credit cards), which would help to remedy this problem.”

Latvia said: “Currently, an ongoing work on the Telecommunications Single Market (TSM) regulation proposal is happening in the Council of the European Union. One of the elements of the proposal is abolishment of roaming surcharges. Latvian Presidency is currently working to find a compromise on the element on a technical level, which envisages significant reduction of roaming surcharges and would eventually lead to a complete abolishment of these charges, leading to a situation, when mobile service users will be able to use roaming services at domestic tariff.”

Lithuania said: “It is very welcome that Council recommendation promotes operators to negotiate in cooperation between members states for reaching competitive agreements between operators without distinction to MVNO’s. Also this recommendation is beneficial with its view to protect MVNO’s from predatory behaviour of united groups of operators.” Finally INTUG added: “M2M applications, such as connected cars and health monitoring devices in the Internet of Things, must be able to connect to any network via a soft SIM approach and not to be liable to Roaming charges.”

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Questions on the use of principles in the Council Recommendation. Delegations were asked to only respond where relevant to actions taken by their country and the responses are not repeated here but are available at the CISP Clearspace site.

Promoting awareness of roaming prices and substitutes

1. What measures have been taken in your country to promote awareness of consumers and businesses about the cost of roaming services and the availability of substitutes; and encourage them to compare the functionalities, limitations, distribution channels and cost of these various options.

Promoting transparent information on roaming services

2. What measures have been taken in your country to promote transparency of information provided to customers by international roaming providers regarding the use and billing of roaming services and to ensure that customers receive appropriate and timely pricing information on the price of roaming services.

3. Have any measures been implemented in your country, since 2012, to ensure that customers are provided with information on the risk of automatic and uncontrolled data roaming connections and downloads and explanations about how to switch off these connections? Have any measures been implemented which impose agreed financial limits, beyond which data roaming transmission would be stopped, unless the customer follows an indicated procedure and do these include personalised notifications when data roaming services have reached a certain proportion of an agreed financial limit?

Facilitating trans-national networks and alliances

4. In the course of assessing mergers and acquisitions in mobile markets, has your country examined the potential of trans-national networks to foster the emergence of roaming offers that could benefit customers? Has your country also examined, where relevant, the potential of mergers to adversely affect the ability of mobile operators in other Members, to negotiate reasonable wholesale terms for roaming services.

Transparency of Inter-Operator Tariffs

5. Has your country discussed with industry the issue of transparency of (headline or non-discounted) Inter-Operator Tariffs (IOTs) for international mobile roaming services?

Has your country collected data on wholesale roaming rates (discounted IOTs) and considered publishing benchmarks of aggregate rates that preserve commercial confidentiality?

Facilitating access to wholesale mobile services on local terms and conditions

6. Has your country taken any steps, where relevant, to remove barriers that may prevent mobile virtual network operators to have access to local wholesale mobile services for the purpose of offering roaming services?

Wholesale price regulation

7. Have any steps been taken to regulate wholesale roaming prices by your country in co-operation with other countries? Has your country participated in any initiative to reach bilateral or multilateral agreements between Members (or between Members and non-Members) with respect to international mobile roaming services?

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Retail price regulation

8. Has any consideration been given in your country to implement retail price regulation to protect customers from paying excessive prices for using roaming services?

Assessment of costs and benefits

9. If wholesale and/or retail roaming price regulation has been implemented in your country, has there been an impact assessment prior to the implementation of these regulations? If so did this assessment examine the potential effects on pricing behaviour that may influence domestic mobile prices, or wholesale roaming prices faced by operators in countries without roaming price regulation, and the likely benefits and drawbacks of such price regulation?

International implications

10. Has your country liaised with the World Trade Organisation concerning the trade implications of roaming services, as well as with other international organisations with relevant interest or ongoing work on roaming services?

11. What steps has your country taken to disseminate this Recommendation throughout the public and private sectors, including governments, businesses, consumer groups, civil society and other international organisations to encourage all stakeholders to take the necessary steps to improve the functioning of roaming services markets and empower and protect customers?

12. Have any initiatives been taken by your country to encourage Non-Members to adhere to this Recommendation and collaborate with Members in its implementation?

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