Prospects for Improving Competition in Mobile Roaming

Title: Prospects for Improving Competition in Mobile Roaming

Research Question: What are the prospects for improving competition in mobile roaming, and what factors contribute to these prospects?

Methodology: The study used a combination of quantitative and qualitative methods. It analyzed the structural conditions of wholesale roaming markets, which are the primary determinants of retail roaming prices. The study considered factors such as the number of suppliers, market concentration, spectrum scarcity, second-mover disadvantages, and demand externalities. It also examined the impact of new technologies, such as SIM over-the-air programming and dual mode handsets, on the roaming market.

Results: The study found that the high combined market share of the two leading operators, combined with second-mover disadvantages, and demand externalities associated with customer ignorance and lack of control over network selection, have impaired incentives for competition in wholesale roaming markets. However, it also identified several developments that are likely to modify this situation in the future. These include the introduction of SIM over-the-air programming, which will allow home mobile operators to direct customers to networks with the lowest charges. Additionally, the study found that new entrant GSM 1800 operators reaching nationwide coverage and larger GSM 900 operators with a pan-European footprint will have an incentive to lower charges in exchange for preferred roaming status. This could potentially discriminate against mobile operators without a pan-European footprint and without the bargaining power to negotiate lower charges.

Implications: The study suggests that anti-discrimination rules contained in licenses, competition law, or the GSM international roaming framework should not be applied in a way that impairs the competitive downward adjustment of wholesale roaming charges. This will ensure that customers continue to benefit from competitive roaming rates. The study also highlights the importance of regulatory interventions to promote competition and transparency in the mobile roaming market.

Link to Article: https://arxiv.org/abs/0109115v1 Authors: arXiv ID: 0109115v1