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PR(00)02: EFTA Surveillance Authority launches second phase of telecommunications sector inquiry under the EEA Competition rules: Mobile roaming

13.9.2002

On 25th January, the EFTA Surveillance Authority sent out a number of formal information requests as part of its investigation, under the EEA competition rules, of the conditions and pricing of national and international mobile roaming. Such requests were sent simultaneously to national competition authorities and telecommunications regulators, as well to as mobile network operators and service providers, within the territory of the EFTA States covered by the EEA Agreement. 

Sector inquiry in three steps

Mobile roaming is the second of three telecommunications areas that are currently under investigation by the Authority, as part of a sector inquiry under the EEA competition rules. The Authority decided on 1st December 1999 to open a sector inquiry, across the territory of the EFTA States, covering three areas in the telecommunications sector, in parallel with the inquiry currently being carried out by the European Commission across the European Union1.  For practical reasons, the Authority and the Commission are assessing these three areas in three phases.  Following the inquiry into leased lines launched at the end of 1999, mobile roaming is the second area to be examined as part of this sectoral inquiry.  The third area involved is the provision of access to and use of the residential local loop. The results of the inquiries of the Authority and the Commission will be analysed jointly. 

Competition issues concerning roaming

Mobile roaming occurs when customers use their mobile telephone handset on another mobile network than the network to which they subscribe, and it is based on bilateral roaming agreements between different mobile operators and service providers.  The ability to enable roaming is a key feature of the GSM/DCS mobile standard that should facilitate the emergence of networks and services covering the whole of the EEA, and a standard model for international roaming agreements is provided by the industry’s GSM Association.  However, although mobile operators can now enter into roaming agreements with a number of different mobile operators in most countries, competitive wholesale and retail roaming offerings do not appear to be emerging.

The Authority is aware, as a result of its contacts with market players and users, that roaming charges continue to be extremely high.  Issues have also been raised concerning roaming rates and refusal to deal at national and international level.  In November 1999, the international telecommunications users association (INTUG) completed a study comparing roaming retail tariffs with retail tariffs for mobile calls without roaming2.  The INTUG study, which covers the EU and Norway, indicates that for mobile consumers the difference in price between roamed and non-roamed international mobile calls to the same destination can be up to 500%.  There appears to be no convincing technical explanation for such differentials at retail level, which suggests that the underlying wholesale markets are not competitive either.

The aim of the Authority’s inquiry is to establish whether current commercial practices and prices concerning mobile roaming infringe the EEA competition rules, in particular the prohibition of restrictive practices and abuses of dominant position (Articles 53 and 54 of the EEA Agreement).

To obtain the necessary information, the Authority's Competition and State Aid Directorate has sent out extensive formal requests for information to national competition authorities and telecommunications regulators, as well as to mobile network operators and service providers, within the territory of the EFTA States.  Recipients have a deadline of two months in which to reply. If the Authority finds sufficient evidence of practices or prices that constitute infringements of the EEA competition rules, it may decide at a later stage open formal proceedings against individual undertakings as well as groups of undertakings.

Background

Based on Article 12 of Chapter II of Protocol 4 to the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice (the "Surveillance and Court Agreement"), the Authority may initiate general inquiries into sectors of the economy where it believes competition might be restricted or distorted.  This provision enables the Authirty to investigate suspicious pricing structures and other practices indicating a possible anti-competitive situation across an entire industry.  Indications that specific companies have infringed the provisions of the EEA Agreement are not required to trigger a sector inquiry.

Once the Authority has decided to start such an inquiry it has the powers to request and obtain all necessary information from Governments and competent EFTA State authorities as well as from companies. For instance, Article 11 of Chapter II of Protocol 4 to the Surveillance and Court Agreement empowers the Authority to obtain all necessary information from companies and associations thereof whether or not they are suspected of any infringement of the EEA competition rules.  Pursuant to Article 15(1)(b) of Chapter II of Protocol 4 to the Surveillance and Court Agreement, the Authority may fine companies or associations thereof where they supply incorrect information upon a request (Article 11(3) and (5) or Article 12) or do not reply within the deadline set by an Article 11(5) decision.

For further information please contact Ms. Anny Tubbs, telephone (+32) 2 286 18 57 or Mr. Harald Evensen, telephone (+32) 2 286 18 55 of the Competition and State Aid Directorate.

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1 Press Release PR (99) 19 of 2nd December 1999.

2 Report on GSM roaming prices 1999; see HYPERLINK http://www.intug.net/surveys/gsm

 




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