Efforts to lower roaming costs internationally as CRTC looks into roaming rates

In the Middle East and Africa, the expansion of pan-regional networks have eliminated the need to roam. In Asia, the spread of competing regional alliances offer reduced roaming rates across international boundaries. And in Europe, politicians seem ready to move on the threat of roaming regulation. As the CRTC engages in a fact-finding exercise on roaming rates, regulators and industry players in other parts of the world are taking different approaches to lowering international roaming rates and responding to consumer angst about the cost of using their mobile phones abroad. “Customers have been clearly complaining and hit by high roaming charges,” Luca Schiavoni, a telecom regulations analyst at U.K. research firm Ovum, said in a telephone interview last week. “There is a worldwide perception that roaming costs a lot and something should be done to bring the prices down,” he said. The CRTC’s fact-finding exercise, launched on Aug. 30, is looking at whether Canadian consumers pay too much to use their phones when they travel to the U.S. or parts of Canada where their own provider doesn’t offer services. Industry Canada has also expressed concern about roaming rates, and this year extended rules that require carriers to let smaller providers roam on their networks. In Europe, Neelie Kroes, European commissioner for the digital agenda, was unequivocal in an address last week as she outlined proposals to reform Europe’s telecom markets. “We need to end roaming, not just reduce the price,” she said, according to a transcript of a Sept. 11 speech at the European Commission’s Belgium headquarters. “One way or the other, customers will be able to escape these high charges.” Under Kroes’ proposal, Europe’s national regulators would coerce carriers into offering “roam like at home” pricing to EU citizens travelling across the organization’s 28 member states. Carriers that don’t offer their domestic rates across the EU would be required to let travelling customers choose a local plan and provide services at the same price as that plan. “You the consumer can take control,” Kroes said. “You can choose a domestic price plan from the country you travel to when you get there. You don’t need a new number or second bill. It will be possible from your phone.” Schiavoni said previous European regulations have already capped how much EU carriers can charge subscribers for using their phones in other EU countries. Those caps, which currently stand at 45 Euro cents per MB of data used and 24 Euro cents per minute of voice call, are set to fall further next year, he added. He said the European commission’s newly proposed regulations were a response to evidence that most EU carriers charge the maximum roaming fees they’re allowed, and were timed to appeal to consumers in advance of European Parliament elections next May. “This idea of removing roaming charges is very much a vote-winning proposition,” he said, adding that recent surveys have found that many Europeans don’t use their phones outside their home country, primarily due to the fear of high roaming costs. “There is a general trend to bring prices down because clearly you can see how good it is for politicians.” While Kroes’ proposal seems set to become the future of roaming regulation in Europe, it wouldn’t work in the Canadian context, Schiavoni said. Though the EU can impose conditions on roaming agreements signed by carriers in all 28 of its member states, Canadian regulators’ jurisdiction stops at the border, leaving them with no ability to regulate wholesale roaming rates outside of Canada. Mirko Bibic, BCE Inc.’s senior vice-president of regulatory affairs, said Monday in an interview on Parliament Hill that the CRTC would face “jurisdictional problems” if it tried to regulate international roaming agreements. “To me, they clearly don’t have jurisdiction to deal with cross-border roaming rates at the wholesale level,” he said in an interview shortly after BCE announced that it was halving the cost of its U.S. roaming packages. While the CRTC can’t compel U.S. carriers to reduce the wholesale rates they charge Canadian providers to let their subscribers roam on American wireless networks, it could potentially cap how much Canadian providers charge each other. It could also limit the markups Canadian providers apply to roaming charges. Bibic said any attempt by the CRTC to regulate roaming rates would be a long road, and would first require the commission to hold a hearing on whether market conditions necessitate intervention into an area of telecom service that currently isn’t regulated. The invisible hand of the market, he said, will help steer industry players toward cheaper roaming rates without the commission’s intervention. “We’re going to try to address roaming costs outside of the U.S., but first you have to have conversations and negotiations with your international partners,” Bibic said. “That’s how this is going to be addressed for the benefit of consumers.” Proponents of market forces can point to Asia’s competing “roaming alliances” as evidence that not every jurisdiction needs regulations to bring down roaming prices, Schiavoni said. The Conexus Mobile Alliance and the Bridge Alliance are two coalitions that have lowered roaming rates across their member carriers’ network footprints, which include parts of China, India, Indonesia, South Korea, and other Asian markets. They have also rolled out services that make it easier for their members’ subscribers to sign up for roaming packages while travelling through another member’s network areas, and member carriers have agreed to offer “seamless” roaming handoffs that ensure subscribers don’t lose calls as they cross from one network into another. Schiavoni said competition between roaming alliances has lowered roaming rates in many parts of Asia, though he couldn’t provide a figure to demonstrate how much those rates fell. In the Canadian context, he said, the idea might not be as practical, since Canadians’ roaming costs are mostly incurred in the U.S., meaning Canadian carriers can better serve their customers by negotiating lower U.S. roaming rates than by worrying about countries in other parts of the world. In Africa and the Middle East, consumers in many countries are already able to score cheap mobile pricing in neighbouring countries by subscribing to an international carrier, such as the Zain Group, which operates in Bahrain, Iraq, Jordan, Kuwait, Lebanon, Morocco, Saudi Arabia, Sudan, and South Sudan. This summer, it seemed Canadians might have been close to a similar option, as leading U.S. carrier Verizon Communications Inc. mulled a Canadian entry, though speculation was put to bed over the Labour Day weekend when Verizon announced its decision not to enter the Canadian market. Countries have also signed bilateral agreements to lower roaming, Schiavoni noted, including Singapore and Malaysia's 2011 agreement that limits how much carriers in the two countries can charge each other for wholesale roaming rates. John Lawford, executive director of consumer group the Public Interest Advocacy Centre (PIAC), said in a telephone interview that the CRTC should work with its American counterpart, the Federal Communications Commission (FCC), to come up with a similar agreement to reduce the cost of roaming between Canada and the U.S. A PIAC report released last December called for Canadian regulators to pursue bilateral and multilateral agreements with other countries to reduce cross-border roaming tariffs, “ensuring that countries with the largest number of Canadian visitors are given priority,” starting with the U.S., the EU, and then moving to Asia-Pacific states. “If the FCC and the CRTC get together and say roaming rates are too high … they can do something in parallel and they can make it work,” Lawford said. Industry Minister James Moore said following a speech at a Canadian Club event in Ottawa Wednesday that he believes the CRTC’s fact-finding exercise into roaming rates is a “worthwhile inquiry” that responds to Canadians’ telecom needs. “I think this is a concern that Canadians have had for some time, and we'll see what the examination uncovers and maybe recommends,” he told reporters. “Certainly, our roaming rates are a source of debate and frustration by a lot of consumers, and that's why I think Jean-Pierre Blais should do his study.” With the spread of smartphones and consumers’ increasing attachment to their mobile phones, Schiavoni said roaming may become more contentious if prices don’t come down soon. “Going forward it's going to be all about data roaming,” he said. “Data roaming is the most important bit of this, and if it keeps being as expensive as it has been until now, the only result operators will obtain is to scare their customers, so they should do something anyways even without regulatory pressure.” —With reporting by Nicholas Kyonka at nkyonka@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Efforts to lower roaming costs internationally as CRTC looks into roaming rates

News | September 20, 2013

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Efforts to lower roaming costs internationally as CRTC looks into roaming rates

News | September 20, 2013

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Related Stories

Rogers disputes OUTtv’s undue preference arguments, says it wants to negotiate

CRTC adds confidentiality concerns to ‘Path Forward’ broadcast proceeding

ITPA wants CRTC to lighten regulations on small incumbent phone companies

SaskTel to offer Apple TV credit for visually impaired customers

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us