Are alternative mobile operators the answer to roaming charges?

EU law to allow travellers to choose alternative operators abroad takes effect in 2014. But will operators be ready and is there a better way?

Regulations due to come into force across Europe in 2014 could offer a big opportunity for mobile operators if they can see a strong business case and slash roaming costs for consumers. But, as with much legislation, there are substantial problems too.

This was the belief of executives from OpenCloud, a software company offering solutions to telecoms companies to help improve their services.

Proposals from the European Union (EU) in 2011 led to regulations – set to come into effect in July 2014 – that will grant mobile users the option of choosing an alternative operator when using their handsets abroad. This would cut roaming costs significantly and give operators the opportunity to use competitor networks for a fair-priced wholesale fee.

But with less than a year to go, mobile providers are running out of time to put the technology in place. Debate rages on in the industry as to whether it is practical and whether all the mobile operators will be able to make the deadline.

Mark Windle, head of marketing for OpenCloud, said the new rules had been “forced by the will of the regulators”. He said it left operators “feeling a sense of frustration that they have to go through this expensive exercise, which will in turn reduce operating income, and they are footing the bill for it."

Jonathan Bell, vice-president of product marketing at OpenCloud, added: “Previous EU roaming legislation has changed the price, both for wholesale and to prevent bill shock for people coming home from their holidays or business trips, but this legislation will change the way the network works.

“To use an alternative provider, the way signaling behaves has to change, not just a number.”

Technology, business case and risk

There is no question the model is feasible from a technological standpoint - but there is no getting away from how much cost and effort it will require of operators.

“It is not just one place in the network that has to make the change but each individual service,” explained Bell. “These networks are 24/7, so they rarely change to prevent blackouts or downtime - but if they change this all at once there is a danger of it going wrong.”

And having such a short period to make such changes only increases the risk.

“It is a very challenging time scale because operators change networks in a slow and considered fashion,” Bell said. “They will be hard-pressed to do this in time.”

However, there is a clear opportunity for one or more of the operators to bring their group operations closer together and make a stronger play across Europe.

They have all the right assets, the right technology, the right knowledge and the right people. The question is whether they see a business case or not

Jonathan Bell, vice-president of product marketing at OpenCloud

“If one of the telcos decides to go for it, it could become a European-wide operator and capture a huge portion of the market and revenue,” said Bell. “They have all the right assets, the right technology, the right knowledge and the right people. The question is whether they see a business case or not.”

Local provision and regulation

Neelie Kroes, the European Commissioner responsible for the digital agenda, has been pushing forward both this regulation and the longer term goal of having a single European market for telecoms. This could mean that, rather than the cluttered networks in Europe – with each country having numerous providers – the continent could look more like the US which, despite its size, only has four operators.

However, what the European Commission (EC) regulator seems to have forgotten is the other regulators involved at the local level.

“It is complying with regulations; that is the tricky bit,” explained Bell. “Unlike in the US where they have one regulator, here there are 28 countries and 28 regulators to answer to.”

“Neelie Kroes is quoting very ambitious targets for a single telecoms market and I don’t think it is going to happen in one or two years. The spectrum has been sold separately in each country and the regulators remain dispersed.”

If prices abroad were the same as at home, this wouldn’t be an issue

Mark Windle, head of marketing at OpenCloud

But at the centre of what might be the most complicated issue for Brussels and the mobile operators is the user. Having alternative providers when abroad will make a big difference to their pocket. Both Bell and Windle believe that, if it is about price, there could be an easier way than forcing change in the network infrastructure.

“If the pricing [for roaming] was more transparent and at a reasonable price, this level of choosing an alternative provider wouldn’t be necessary as it would always be simpler and easier to stay with the operator we are with at home,” said Bell.

“Exactly,” added Windle. “If prices abroad were the same as at home, this wouldn’t be an issue.”

A group of 27 European Commissioners voted to end roaming charges in June 2013, with the goal of having this in play by the same deadline as the new alternative operator legislation. However, it has not passed yet and, while costs have been driven down for roaming in Europe by the EU and will continue to fall next year, it is unclear whether this proposal will come into play before the alternative roaming laws.

While operators might moan about the position they have been put in, they may need to stop arguing and start focusing on getting everything ready on time. EU citizens will have greater choice and cheaper options to staying connected once abroad – which is what many think the European regulators should focus on.

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