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A Structural Solution to Roaming in Europe
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1028-3625
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EUI RSCAS; 2010/62; Florence School of Regulation; [Communications and Media]
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SHORTALL, Tony, A Structural Solution to Roaming in Europe, EUI RSCAS, 2010/62, Florence School of Regulation, [Communications and Media] - https://hdl.handle.net/1814/14398
Abstract
This paper suggests that international roaming markets suffer from structural flaws in the way that
roaming agreements are established in Europe. The initial roaming interventions by the European
Commission in 2007 have been very welfare enhancing and the transfer of producer surplus to
consumers has brought significant benefits to end users. Nevertheless, there are clear opportunity costs
of maintaining and/or extending the current roaming Regulation. The price for wholesale roaming
services in a given country is driven principally by the amount of traffic that an operator is willing to
send back to the country requesting a price offer and not on the basis of the roaming services
requested. The paper suggests that by breaking the link between the prices offered in one country and
the volume of returned traffic to the other country will enable the wholesale market for international
roaming to operate competitively. It is further suggested that retail price regulation is unwarranted
when the wholesale market can operate competitively irrespective of the issue of the retail elasticity of
demand for these services. Preliminary, suggestions are put forward as to how policy makers could
transition from the current regime to a future market based regime by putting a number of required
enablers in place.
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Florence School of Regulation