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...home provider for making and receiving calls while roaming abroad a foreign network abroad and, in return, the foreign operator bills the home provider a wholesale charge for the underlying wholesale services called "roaming in" (namely, call origination and transit for a outgoing call or call termination and transit for a received call).
The underlying markets are rather important. The GSM Association estimates that at least 147 million EU citizens (nearly one EU mobile subscriber in three) use international roaming services from their domestic mobile operator: 75% of these users are business customers, while the remaining 25% travel for leisure purposes. The market revenues generated by "roaming in" amounted to EUR 8.5 billion in 2005 and represented 5.7% of returns in the European mobile sector. A recent Eurobarameter (1) survey for the DG information Society and media highlights some interesting facts about the average roamer: 44% of EU citizen visited another EU country for private purposess between September 2005 and September 2006; 53% of EU mobile subscribers use their mobile phone when travelling abroad, but 63% of them use it less often than at home. The average roamers feel that roaming services are too expensive compared to identical domestic services: the cost of international roaming services appears to be the most important reason for using a mobile phone less frequently abroad for 81% of respondents.
Under the "high price" claim of consumers lies the idea of supra-competitive (monopolistic) profits for mobile operators in roaming markets. This view has been shared by the European Commission from the outset, and especially by Viviane Reding, the Commissioner for Information Society and Media (ISM). She thought--and still thinks--that roaming prices neither reflect underlying costs nor the value of calls. These statements have given rise to a sequence of actions by the Commission since 1999 and ultimately led to a regulation proposal.
The double failure of competition law and of the electronic communications Framework
The tension between mobile network operators (MNOs) and the Commission has grown gradually. Table 2 in the annex presents a brief overview of the chronology of events starting from the 1999 sector inquiry launched by the Commission. Two pillars of the European organization were involved: the DG Competition and the European competition rules since 1999, the DG Information Society and Media and the...
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