2 June 2006
Editor’s Note: This Practice Note was prepared based on information provided by the National Telecom Regulatory Authority of Egypt (NTRA), and with the NTRA’s assistance.
The Arab Regulators’ Network (AREGNET)  recently conducted a study into mobile roaming prices in Arab countries. The Egyptian regulator, the National Telecom Regulatory Authority (NTRA) led the study.
The objective of this study was to:
- Review mobile roaming charges across operators in the Arab region, and
- Identify solutions and regulatory actions to address problems identified with pricing for mobile roaming services.
Overview of the Region
The Arab region covers 22 Arab countries, with a total population of over 299 million. There are 35.4 million mobile subscribers in the region, served by 45 mobile operators. This equates to 11.8 mobile subscriptions per 100 inhabitants (compared to 8.87 fixed line subscribers per 100 inhabitants).
The study looked at prices for two types of roaming call:
- International roamed calls: An international roamed call was defined as a call made by a subscriber roaming on a visited network to someone in another country. For the purpose of the study this was limited to calls to the calling party’s home country. The called person may be a subscriber on the same home mobile network as the calling person, or a fixed network subscriber,
- Local roamed calls: A local roamed call was defined as a call made by a subscriber roaming on a visited network to another person in the country of the visited network. That person might be a mobile subscriber on the visited network, a mobile subscriber on another mobile network in the same country, or a fixed network subscriber in the same country.
Due to limitations in the availability of data, the study considered only a subset of all mobile operators in the region:
- For international roamed calls, 10 operators in 6 countries, and
- For local roamed calls, 8 operators in 5 countries.
The study found that, from customers’ perspective, prices charged for mobile roaming are unsatisfactory:
- Roaming charges in the region are not transparent. The details of roaming charges are not widely known, and are difficult for users to discover,
- Roaming charges change frequently. This makes it even more difficult for subscribers to know what they can expect to pay for a roamed call,
- There are large differences in mobile roaming charges between different networks. In countries with more than one mobile operator, roamers are charged differently depending on the network they are using.
The study identified the following apparent causes of these problems:
- Insufficient competitive pressure on operators in providing mobile roaming services,
- Strong disincentives on operators to negotiate lower prices. Operators are concerned that lowering their roaming prices would reduce their revenue. This is despite AREGNET’s clarification that reducing prices would increase the call volumes,
- The fragmented nature of the market. The mobile market includes many differentiated products, services, and pricing plans, not all of which are effective substitutes. AREGNET found that this reduces the purchasing power of users, and
- Barriers to entry facing alternative operators.
The study proposed a combination of regulatory and non-regulatory solutions to address these concerns. These include:
- Providing information on roaming charges on the AREGNET website, to be updated every 6 months,
- National level reviews of the inter-operator tariffs charged by mobile operators. These reviews will be done by the national regulator in each country,
- A regulated inter-Arab inter-operator tariff, to apply to all operators in the region. Under this approach, the regulated inter-operator tariff for different operators would be determined using a single consistent methodology. The regulated tariff would reflect underlying costs and would be based on the principle that, for any individual mobile operator, the inter-operator tariff and retail mobile tariff share largely the same costs (that is, the costs of mobile access and the core mobile network),
- Encouraging competition driven roaming deals between operators. National regulators would encourage their mobile operators to use the full possibilities offered by the OTA SIM programming technology to increase their bargaining power with roaming partners, to reach the best possible deals. Operators would be encouraged to pass the new prices on to their customers.
AREGNET’s role in this would be to promote greater market liberalization. It is hoped that market liberalization will increase the number of infrastructure based mobile operators in each country with nationwide coverage. This would increase individual operators’ bargaining power in negotiating roaming deals,
- Encouraging operators to use Optimized Routing and to pass the benefits on to users. National regulators would encourage their visited mobile operators to implement and use Optimized Routing for roaming traffic in their networks. Most operators are already using Optimized Routing to reduce their costs but unfortunately keep the savings for themselves. Mobile operators would be encouraged to bill each other based on the actual routing of the roamed call, and to pass these optimized charges on to their customers.
As the study was submitted to the Council of Arab Ministers for ICT the Council, during its meeting in June 2006, decided that:
“Arab regulators, on the national level, shall put obligations on mobile operators in their respective countries to:
1- lower their international mobile roaming retail tariff starting form 01/01/2007 to a level that is appropriate and acceptable in accordance with the global norms, with the possibility of negotiating bilateral agreements between operators to lower the inter-operator tariffs
2- announce to the roamer, via SMS, the prices of international mobile roaming upon arrival in the visited country ”,
AREGNET will continue its study to further advise the Council on the matter.
 AREGNET was established in 2003 with the purpose of developing the ICT sector in the Arab region.