Roaming - An assessment of the Commission proposal on roaming

In July 2006, the European Commission presented its proposal to regulate international roaming (COM(2006)382 final of 12 July 2006) in order to bring down roaming prices. The motivation for the proposal was that roaming prices far exceeded actual costs of providing roaming services. The Committee on Internal Market and Consumer Protection (IMCO) has asked Copenhagen Economics to review the Commission’s proposal. We have identified a number of points where the proposal could be improved. Improving these points would lead to a regulation which is simpler than the proposal made by the Commission. The Commission proposes two retail price caps for outgoing roaming calls: Based on the Commission’s approach, one retail price cap would be 30 eurocents per minute for calling locally within the visited country, and another retail price cap would be 45 eurocents for calling home/calling to a third country. The Commission proposes a retail price cap of 15 eurocents per minute for receiving a call. We find that a single retail price cap at 39 eurocents per minute for making roaming calls irrespective of the destination in the EU is appropriate; and we find that a retail price cap of 26 eurocents per minute for receiving calls is appropriate. We recommend that these caps should apply to the average of calls, not to each individual call. However, we suggest the average price caps are supplemented by ‘consumer protection tariffs’ set at the level of the individual call to avoid high prices for certain consumer groups. The ‘consumer protection tariffs’ could be set at 48 eurocents per minute for making calls and 33 eurocents per minute for receiving calls. Our suggestion of a single retail price cap of 39 eurocents per minute for making calls lies between the Commission’s proposal for two retail price caps at 30 eurocents and 45 eurocents. However, we arrive at 39 eurocents by way of a higher retail price cap and a lower wholesale price cap, because this reflects the