ROAMING : PRICE CAPS: OPERATORS WARN PARLIAMENT.

Structural solutions to establish real competition on the roaming market cannot be matched with excessively binding price caps, a majority of operators told MEPs at a hearing on the European Commission's draft regulation on roaming, held on 20 December 2011 by the EP Committee on Industry, Research and Energy (ITRE).

Operators dispute the proposal set out in the draft report by Angelika Niebler (EPP, Germany) to apply price caps at wholesale level and much lower retail prices than those recommended by the Commission (see box).

The Commission's draft regulation, presented on 6 July, will replace the 2007 text amended in 2009, which expires in 2012. It proposes the first-ever structural solution aimed at tackling the root of the problem: the absence of competition on the roaming market. The draft aims to facilitate access to the wholesale market for alternative operators and proposes to decouple domestic service from roaming, so that consumers will be free to choose another operator for roaming services, keeping their home-based operator for domestic service.

In parallel, the Commission proposes a gap between wholesale price caps and sufficiently flexible retail prices, in other words it does not intend to slash retail prices, primarily with the aim of enabling alternative operators to enter the roaming market.

COMPETITION VS REGULATION

If the structural solution works, "the market will push down retail prices". Of course, "security price caps can be set. But these prices must not deter new entrants," said Robert Mourik of Telefonica. If MEPs are not convinced by this solution, it should not be prescribed, he added. But "as the European Parliament, you have to make a choice".

The same view was echoed by the alternative operator Transatel (MVNO). "If I am not 30% below the costs of the dominant operators, I don't get any new customers." So "if ceiling prices decrease," that is impossible, warned the group's CEO, Jacques Bonifay. He added that "the EU must make a choice, the choice of competition".

For Bouygues Telecoms, a small operator, this solution is particularly complex and will not necessarily enable the Commission to end distortions on the market.

The Body of European Regulators for Electronic Communications (BEREC) is taking a cautious approach. "We don't say that competition will not work. Competition is likely to work for frequent users, but things are different for the average consumer, at least for the medium term," said a...