27 January 2022

Jonathan Wall, Principal at Aetha, reflects on the European Parliament’s commitment to extend Roam Like at Home for a further 10 years – and considers what this might mean for the rest of the world.

Will the recent decision to extend Roam Like at Home across Europe see other countries and regions follow suit? The extension of the current policy, due to expire in June 2022, that ensures Europeans can continue to call, message and use mobile data anywhere in the EU at no extra cost, certainly gives the impression of success.

The decision is sure to attract attention from other countries and regional organisations considering the complexities of the International Mobile Roaming (IMR) space. But while the Roam Like at Home proposition appears to be popular – certainly with consumers – there are factors and challenges that require careful consideration before deciding on the best way forward.

One factor is timing – introducing Roam Like at Home cannot happen overnight. Europe was first to adopt roaming at no extra cost to the consumer in 2017, though the EU started intervening in wholesale prices in 2007. While implementation took time, the effects of the tariff changes were immediately visible: the regulation came into place on 17 June (the end of Q2) and total roaming data traffic saw a 360% increase between Q2 2017 and Q3 2017, while a 257% increase in roaming voice traffic was observed. We note, however, that this coincided with the holiday season which will have partly contributed to increased traffic volumes.

Why did implementation take a decade to achieve? The mechanism that drives the retail rate to be regulated down to zero is enabled by the wholesale rate – the price operators charge each other when their customers use other networks when roaming the EU – also being capped at a low level. However, this process is not a quick fix and, as the European experience demonstrates, requires years of preparatory groundwork. If wholesale prices were to be suddenly slashed, the impact on global mobile operators would be too great a shock. The best practice approach is to apply a glide-path model that reduces prices predictably and slowly over time – this means any region considering introducing Roam Like at Home needs to factor in time to lay the right foundations.

Many regions appear to be moving towards Roam Like at Home:

• the Western Balkans eliminated retail roaming charges for users travelling between the associated countries (Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia) in July 2021, following the same glide-path as implemented by the EU in 2017
• separate plans to introduce the mechanism are in place across Comunidad Andina (Bolivia, Colombia, Ecuador and Peru) and Mercosur (Brazil, Paraguay, Uruguay and Argentina).

However, others such as Australia and New Zealand have taken a less interventionist approach but nevertheless achieved reductions in rates.

In April 2011, communications ministers from Australia and New Zealand jointly announced the launch of a full market investigation into reducing IMR prices, after a 2009 study concluded that they were significantly above cost. The report outlined five possible options for intervention, including the introduction of controls on both retail and wholesale prices, although this approach was not chosen as it was thought that the desired outcome could be reached with more limited regulatory intervention.

Ministers opted to allow authorities to monitor roaming prices and implement price control measures at a later date if required. This was achieved by empowering the regulators to require operators to provide data on pricing, traffic and margin information on roaming services between Australia and New Zealand. The regulatory authorities believed that greater transparency and the threat of regulatory action would be sufficient to encourage operators to reduce IMR rates. This approach has been successful so far, with operators currently offering reduced roaming between both countries on a commercial basis.

While the European Roam Like at Home model adds sway to the single market and benefits its businesses and citizens, the more motivational approach favoured by Australia and New Zealand has secured results with a lighter touch. In an increasingly digital and interconnected world, International Mobile Roaming cannot be ignored. Organisations facing this process must be well informed and understand that establishing Roam Like at Home takes time – and can’t be built in a day.