Implementation of EU Roaming regulation in Lithuania

Content: 1. Legislation 2. Implementation 3. Problems 4. Lessons to learn

Legislation 2012 November 2015 Roaming regulation III: -Regulation of voice, SMS, data services -Retail and wholesale -Decoupling of retail roaming services -The difference between roaming and domestic charges should be eliminated 2012 November 2015 Roaming regulation IV: -Regulation of voice, SMS, data -Retail and wholesale -Decoupling of roaming services -Introduction of Roam Like at Home (RLAH) -Transitional period to RLAH

Legislation April 2016 December 2016 Transitional period to RLAH: -Retail roaming charges = domestic charges+ wholesale charge for voice/SMS/data services -Prices for retail calls received are caped at 1,14 euroct/min. April 2016 December 2016 Commission implementing regulation: -lays down conditions to implement RLAH -sets principles for application of Fair Use Policy (FUP) -sets requirements for sustainability test (calculation, application, implementation)

Legislation 15 June 2017 February 2017 Switch to RLAH: March 2017 Formal agreement of new wholesale roaming charges BEREC guidelines on roaming regulation: -interpretation of roaming regulation rules

Implementation: prices ? March 2016 April January 2017 after 15 June 2017 June 2017 vs April 2017, euroct June 2017 vs April 2017, % Voice send, euroct/min. 19.00 5.00 1.35 -3.65 -73.00% Voice received, euroct/min. 1.14 1.08 0.00 -1.08 -100.00% SMS, euroct/SMS 6.00 2.00 0.49 -1.51 -75.50% Data, euroct/MB 20.00 0.11 -4.89 -97.80%

Implementation: prices One service provider started offering RLAH roaming communication services in Nordic countries in spring 2016. Another service provider started offering RLAH data services for all EU countries in summer 2016. Take up was not huge, but usage shot up… Initially services were not used the operators planed -> export of SIM cards to Lithuanian families in Nordic countries/heavy usage by truck drivers. After application of FUP, usage decreased but still above pre-RLAH times.

Implementation: preperation for RLAH Talks with operators regarding implementation of RLAH from the beginning of 2017. Several meetings on interpretation of the FUP, sustainability test and BEREC guidelines. All operators submitted application for right to apply surcharge. All operators indicated a negative retail roaming margin > 3 % of mobile service EBITDA. RRT currently is investigating applications.

Problems

Problems

Problems Every roaming service unit provided would be loss making. Revenues from inbound traffic would not cover the losses. Operators have different cost structures and different positioning. Operators do not want to be „the bad guise“, but... Shareholders demand increasing revenues and profits. The problems: a) how to satisfy shareholders, the policymakers and customers; b) how will react the competitor.

Lessons to lear Operators should be allowed to recover their costs. Services should not be crosssubsidised. Customers should not be promissed what they might not get.

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