By Tony Shortall
When “Roam Like At Home” (RLAH) rules were introduced in 2017, many observers thought that this was the end of the roaming problem in Europe. While retail roaming surcharges were abolished across the EEA, the underlying problem of high prices at the wholesale level continued and the existing archaic system of determining those wholesale prices continued. This paper argues that wholesale prices are unrelated to costs because of a structural problem in the way traffic is traded -in particular the custom of bartering traffic or ‘balancing’ has distorted the market and means that for most wholesale roaming traffic, the wholesale price is unimportant. A central recommendation of this paper is that policy makers’ focus must be on breaking the link between in-country roaming services and returning traffic volumes – this will introduce a competitive dynamic in the market and allow normal pricing mechanisms. This can be achieved by moving the market to an electronic trading market to determine prices and volumes. Recent data clearly shows that certain operators are greatly disadvantaged by high pricing in the wholesale roaming markets and that demand suppression practices such as the avoidance of 4G agreements are not currently tracked. The implications for the development of 5G are that roaming risks undermining service development and adoption. The wholesale stresses are also leaking through to the retail level and consumers are not getting what was promised by RLAH in terms of the ability to roam throughout Europe on the same terms as they do in their home markets. This paper argues that the establishment of a wireless trading platform which permits one-way bids only (and thereby eliminates the fundamental problem of traffic balancing) as well as anonymising participation and being transparent on pricing would enable prices to move towards marginal cost. Mandating participation on such a trading platform might be necessary and two possibilities appear possible (via the Roaming Regulation or via an antitrust action). Moving pricing towards marginal cost would enable RLAH to be sustainable for all operators even where data volumes are very high, such as in a 5G environment. In turn, this will facilitate an accelerated 5G service development and accelerated adoption in Europe.