Roaming analysis for the period of 1q’10 – 2q’10 - UKE

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Roaming analysis for the period of 1q’10 – 2q’10

The subject of this analysis is information on services provided by Polish mobile operators in international roaming. This report is an element of the information obligation of the President of UKE in accordance with the Regulation of the European Parliament and the Council on roaming from 18th June 2009.

Roaming services were analyzed for the period of 1q’10 – 2q’10, both realized by customers of  foreign operators in Poland (passive roaming) and those realized by costumers of the Polish operators outside Polish borders (active roaming). Additionally, retail offers of Polish mobile operators were analyzed as of  13th March 2011.

When it comes to customers from the EU member states, their interest in mobile services outside the borders of  their states have clearly decreased in 4q 2010 (compared to 3q 2010) for wholesale services in the passive roaming and retail services in active roaming. Roaming characteristic feature is its periodic demand increase during holidays. After this period customers interest in mobile services always significantly decrease as a consequence of their lower cross-border mobility.

This analysis has also confirmed trends observed since 2007, according to which operators set prices for regulated services at a level close, but not exceeding fixed Eurotariff levels for voice and SMS. Instead of using the price, telecom operators maximize profit, and the same strategy implemented by competitors provides a stable scenario, even in moments of administratively enforced cuts in prices.

In the case of non-regulated services (MMS and data transmission) mobile phone networks use a more differentiated price, however, significantly higher than similar domestic offers.

Regardless of the time of departure outside of the country Poles are most keen to send SMS and receive calls. Annual consumer research carried out on behalf of UKE shows that the price is a priority for customers when choosing the operators offer. Although, bundling of services in domestic tariffs clearly blurs the differences in prices, in roaming SMS message is on average 0.31 EUR cheaper than voice, and so better maximizes the benefit of the consumer basket. It should be kept in mind that roaming services in almost all networks are settled outside of a subscription, so their cost is even more noticeable when paying the bill. This is one of the reasons why, the President of UKE is actively promoting the regulation of services, where roaming prices deviate significantly from national standards. In the case of Polish mobile market for years this pattern refers to data transmission, which in March 2011 was from 1 to 61 times cheaper in domestic offer than in roaming, which gave an average for the entire Polish market at 13-fold difference in price .
       
In its position to the European Commission’s public consultation on roaming regulation revision, the President of UKE proposed access obligation and non-discriminatory obligation as a tool which will release competition in the market. This mechanism will ensure equitable treatment of all operators regardless of their position resulting from the current base of customers, it will also cause lowering of wholesale prices, as well as retail prices later on. However, because of the need to avoid the margin squeeze and the need of time in which the mobility of EU citizens will change their priorities in the selection of offers, it is still necessary to regulate services and to reduce the operators margin to levels similar to domestic. In the opinion of the Regulator data transmission is still expensive and in 2015 it should not cost the consumer more then 0,23EUR/MB excluding VAT, while his operator more than 0,15 EUR/MB excluding VAT. UKE also sees the need for further reductions in the prices of other roaming mobile services, to the level where the margins on roaming services will not differ from the margins on domestic markets. Today's disproportion in this respect is not economically justified.

The President of UKE hopes that presented statements will find reflection in merit discussion and planed mechanisms regulating the European market of mobile services.        

Below, there is the summary of the current (as of 4q 2010) and proposed by the President of UKE (from 2012, 2013, 2015), wholesale and retail prices of mobile services in international roaming, which show serious and unjustified disproportions between prices and costs of providing these services.





 

 
Source: UKE         
Commentary:
- for 4q 2010 wholesale rates for voice calls, SMS and data transmission were calculated for the passive roaming users of the Polish network operators, customers of the operators from the countries of the European Union / European Economic Area, operators outside the group linked to equity / brand;
- for 4q 2010 retail rates for voice calls were calculated for customers of the Polish network operators using Eurotariff in active roaming as the average of the rates for post-paid and pre-paid customers;
- for 4q 2010 retail rates for SMS messages were calculated for customers of the Polish network operators using SMS Eurotariff in active roaming;
- for 4q 2010 retail rate for data transmission were calculated for customers using active roaming in the network of operators from the European Union / European Economic Area, acting outside of the group linked to equity / brand, as an average for post-paid and pre-paid customers.

Full text of the analysis is available in Polish.

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