EU ROAMING REGULATION AND NATIONAL INTEREST. DIGITAL ECONOMY: CHANCES AND CHALLENGES Prague, Czech Republic 18 th of March 2016
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1 EU ROAMING REGULATION AND NATIONAL INTEREST DIGITAL ECONOMY: CHANCES AND CHALLENGES Prague, Czech Republic 18 th of March 2016
2 CONTENT 1 INTRODUCTION 2 EU ROAMING REGULATION 3 THE PRICE CONTROL WITHDRAWAL 4 MIGRATION TO ALL-IP NETWORK 5 HOW TO PROTECT NATIONAL INTEREST WITHIN EU? 6 CONCLUSION 2
3 CONTENT 1 INTRODUCTION 2 EU ROAMING REGULATION 3 THE PRICE CONTROL WITHDRAWAL 4 MIGRATION TO ALL-IP NETWORK 5 HOW TO PROTECT NATIONAL INTEREST WITHIN EU? 6 CONCLUSION 3
4 INTRODUCTION Tourism is one od the most important areas of economy for Croatia A lot of traffic between Croatian operators and operators from other countries of former Yugoslavia which are not part of the EU, especially Bosnia and Herzegovina and Serbia - Croatian operators terminate over 25% of international traffic in non EU/EEEA countries: two operators terminate over 80% in ex-yugoslavia Despite of the Homeland war in the first half of nineties, Croatia has achieved a fast development, especially in telecommunications 4
5 CONTENT 1 INTRODUCTION 2 EU ROAMING REGULATION 3 THE PRICE CONTROL WITHDRAWAL 4 MIGRATION TO ALL-IP NETWORK 5 HOW TO PROTECT NATIONAL INTEREST WITHIN EU? 6 CONCLUSION 5
6 EU ROAMING REGULATION 1(2) Huge difference between inbound and outbound roaming traffic due to more than 10 million tourists visiting Croatia every year Roaming Like At Home initiative from European Commission Negative impact on revenue and profit of Croatian mobile network operators Investment in a huge network capacity that is fully used only in high summer holiday season RLAH+ as a compromise solution is proposed by BEREC and EU Council 6
7 EU ROAMING REGULATION 2(2) Incoming call Outgoing call 7
8 CONTENT 1 INTRODUCTION 2 EU ROAMING REGULATION 3 THE PRICE CONTROL WITHDRAWAL 4 MIGRATION TO ALL-IP NETWORK 5 HOW TO PROTECT NATIONAL INTEREST WITHIN EU? 6 CONCLUSION 8
9 WHAT IS AN A NUMBER REGULATION? HAKOM defined that as of the 1 st of April, 2015, the regulated MTRs refer only to the calls originating from A numbers within the EU/EEA area, regardless of where the end user is located For the calls originating from A numbers outside the EU/EEA area price control obligation was withdrawn while other obligations have been kept Should non-eu operators profit from the EU internal regulation? Emphasis is on the end user (A number), not on the country were the call is originated 9
10 REASONS FOR THE PRICE CONTROL WITHDRAWAL Croatia is following the EC Recommendation on termination rates so MTRs have been based on pure LRIC as of the 1 st of July, 2015 At the same time, ex-yugoslav non EU countries are not obliged to follow EC Recommendation on termination rates so they apply significantly higher MTRs The imbalance in terms of the charged MTRs because ex-yugoslav operators routed their calls through some EU countries and for that traffic Croatian operators had to charge pure LRIC based price The main reason to change regulation: around 25% of international traffic terminated in non EU/EEA countries generated around 65% of total costs The main idea: to ensure that Croatian operators have adequate negotiating position when setting TRs - potential for lower TRs in non EU/EEA countries and consequently lower retail prices for the calls toward non EU/EEA countries 10
11 CONTENT 1 INTRODUCTION 2 EU ROAMING REGULATION 3 THE PRICE CONTROL WITHDRAWAL 4 MIGRATION TO ALL-IP NETWORK 5 HOW TO PROTECT NATIONAL INTEREST WITHIN EU? 6 CONCLUSION 11
12 ALL IP NETWORK Currently TDMvIC - 2 international, 9 regional and 26 local exchanges IPvIC - 2 points of interconnection mandated by the incumbent: 12
13 INVOLVEMENT OF HAKOM The incumbent operator migrated from PSTN to NGN hierarchy and to IMS, which implicated switch-off of all local exchanges HAKOM was deeply involved at the beginning of the process all procedures were consulted with HAKOM Without HAKOM defining specific terms and conditions in this process, IMS migration process could deter competition and have negative effect on end users Pilot project highly recommended the incumbent itself was not prepared for all the issues that occurred In case of Croatia, regulatory intervention was needed to encourage the process of migration and to safeguard other operators and end users on the other side HAKOM balanced between the need to modernize the network and safeguarding the interest of AOs and end users 13
14 CONTENT 1 INTRODUCTION 2 EU ROAMING REGULATION 3 THE PRICE CONTROL WITHDRAWAL 4 MIGRATION TO ALL-IP NETWORK 5 HOW TO PROTECT NATIONAL INTEREST WITHIN EU? 6 CONCLUSION 14
15 HOW TO PROTECT NATIONAL INTEREST WITHIN EU? Main goal: A stronger negotiating position of the Croatian operators and improve Croatian telecommunications market situation There is no discrimination of non EU/EEA operators 15
16 CONTENT 1 INTRODUCTION 2 EU ROAMING REGULATION 3 THE PRICE CONTROL WITHDRAWAL 4 MIGRATION TO ALL-IP NETWORK 5 HOW TO PROTECT NATIONAL INTEREST WITHIN EU? 6 CONCLUSION 16
17 CONCLUSION Current result: Croatian operators raised their revenue, have improved network efficiency and will have reduced loss of revenue due to new EU roaming regulation There is no discrimination of non EU/EEA operators only possibility for equal negotiating position 17
18 THANK YOU FOR YOUR ATTENTION Dražen Lučić, Ph.D. President of the Council 18
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