ROAMING : CAPPING OF WHOLESALE PRICES SPARKS DEBATE.

The wholesale price ceilings proposed by the European Commission in its draft regulation on roaming "are too high and will prevent new entrants from being competitive," denounced Innocenzo Genna, speaking for the Italian mobile virtual network operator (MVNO) Poste Mobile, on 8 February at the European Parliament, during a hearing organised by the EPP group. The hearing focused on the proposal, contained in a draft report by Angelika Niebler (EPP, Germany), to lower the ceilings for retail prices (charged to users) and wholesale prices (billed between operators) set by the Commission.

Presented on 6 July 2011, the Commission's draft regulation will replace the 2007 text, amended in 2009, which expires in 2012. It introduces the first-ever structural solution designed to get to the root of the problem: the absence of competition on the roaming market. The idea is to facilitate access to the wholesale market for new alternative operators and to decouple domestic service from roaming, so that consumers can choose another operator for roaming services while keeping their national operator for domestic use.

In parallel, the Commission continues to regulate price ceilings temporarily but proposes an economic area, ie a sufficiently flexible gap between wholesale and retail price ceilings. In other words, it proposes not to crush retail prices, mainly to permit alternative operators to enter the roaming market, to keep from discouraging them because entry costs are particularly high.

Operators agree that a decrease in ceilings as proposed in the report by Niebler (4333) is not reasonable. They consequently support the Commission's thinking that the structural solution will make for greater competition, which in turn will bring down retail prices.

"THERE ARE OLIGOPOLIES"

Things are different when it comes to wholesale price ceilings. To...