1. 1 © Copyright Tariff Consultancy Ltd. All rights reserved TCL Tariff Trends SnapShot no. 1 Developments in EU Roaming The TCL Tariff Trend SnapShot is a Research & Analysis Service published by Tariff Consultancy Ltd (TCL). It provides a brief snapshot analysis of a new pricing trend for mobile or fixed line services seen by TCL analysts. It is published approximately every fortnight (for 20 issues a year). For further information on the TCL Consultancy and Research Reports & Subscription Services please go to www.telecomspricing.comwww.telecomspricing.com or contact TCL by e-mail at info@telecomspricing.com The TCL Tariff Trends SnapShot #1 examines the latest trends for Mobile Roaming in Europe, since the introduction of the latest EC roaming cap in July 2012.

2. 2 © Copyright Tariff Consultancy Ltd. All rights reserved TCL Tariff Trends SnapShot no. 1 Developments in EU Roaming Introduction This edition of the TCL Tariff Trends SnapShot considers some of the changes in Call & Mobile Data roaming in Europe since the introduction of the European Commission “roaming cap” first introduced in 2011. In this edition of the SnapShot TCL looks at the following roaming trends including: 1.i) The main changes in the EC roaming cap 2.ii) The introduction of roaming as a Premium Post Pay bundle 3.iii) The introduction of new Call & Data roaming bundles 4.iv) The introduction of new roaming bundles outside the EU 5.V) Roaming pricing trends from the EU to the USA 1.vi) Conclusions 1.Appendix I & 2: Voice and Data Caps

3. 3 © Copyright Tariff Consultancy Ltd. All rights reserved TCL Tariff Trends SnapShot no. 1 Developments in EU Roaming The impact of new EC roaming regulation: From 1st July 2012 within the EU calling has become even cheaper, but pricing is also changing for roaming users outside the EU – with reductions & some increases. The European Commission originally introduced its mobile roaming price cap in July 2007, It was initially applied to retail calls and SMS within the EU-27 member countries. The first wholesale data tariff cap was applied in July 2011. In 2012, the roaming price cap was extended to include the retail mobile data tariff fixed at a rate of € 0.7 per MB. Under the current agreement, roaming rates are to be reduced in 3 stages over the 3 year period from 1 st July 2012 until 1 st July 2014 (see Figure 1). Under the latest EC roaming cap agreement there will be a reduction in call roaming charges over the 4 year period since July 2011 of 46%, with SMS charges falling by 36%. Since 2012 to 2014 Mobile Data rates will have fallen by 70% over the period under the retail roaming cap.

4. 4 © Copyright Tariff Consultancy Ltd. All rights reserved TCL Tariff Trends SnapShot no. 1 Developments in EU Roaming Figure 1 – The reduction in calls, SMS & mobile data under EC rules from July 2011 to July 2014 (in Euro cents) Source – TCL

5. 5 © Copyright Tariff Consultancy Ltd. All rights reserved TCL Tariff Trends SnapShot no. 1 Developments in EU Roaming The Main Changes in Roaming Pricing – 2012 onwards 1) From 1 st July 2012, MVNOs and resellers will be able to access roaming tariffs from other operators at a regulated wholesale price. 2) By July 2014 users when abroad in the EU will be able to purchase data roaming from suppliers in the visited country. 3) When travelling outside Europe users will also receive information of roaming rates and have the option of stopping roaming when expenditure reaches a Euro 50 ceiling. MNOs are countering the EC roaming cap by offering a range of opt-in packages & are now bundling roaming with other premium packages. In some cases the bundles also include EU and non-EU country roaming. A1 (Austria) offers a Data Roaming Bundle across 60 countries at the rate of €4.90 (20 MB for 24 hours), €19.90 (100 MB for 7 days) and €29.90 (200 MB for 30 days) – equivalent to a per MB rate of €0.15, €0.20 and €0.25 respectively.

6. 6 © Copyright Tariff Consultancy Ltd. All rights reserved TCL Tariff Trends SnapShot no. 1 Developments in EU Roaming Premium packages incorporating roaming – Swiss Case Study -1 Sunrise launched a SmartPhone Premium Flat Rate Pay Monthly Tariff called Sunrise Flat 7 on 21 st June 2012 for Euro 200 (€165.34) per month (includes a phone). Sunrise flat 7 includes: It is still early days but roaming is being integrated into premium packages at last. MinutesSMS/MMSDataRoaming Unlimited all networks + unlimited to 15 European countries and North America Unlimited 200 minutes in 27 countries Europe 100 MB of data

7. 7 © Copyright Tariff Consultancy Ltd. All rights reserved TCL Tariff Trends SnapShot no. 1 Developments in EU Roaming Premium packages incorporating roaming – Swiss case study -2 Swisscom (Switzerland) from July 1 st 2012 has introduced a reduction in EU roaming calls and 50 MB for CHF 24 per week (extended from 50 MB per day for the same rate). There are 2 roaming options which are: STANDARD pricing (pre-July 2012) STANDARD pricing (post-July 2012) World Option Flex (pre-July 2012) World Option Flex (post-July 2012) Roaming calls – Switzerland to EU (per minute) 0.85 CHF0.80 CHF0.55 CHF0.50 CHF Text Message Cost (per SMS) 0.90 CHF0.50 CHF0.20 CHF Mobile Data Cost (per MB) 10 CHF8 CHF

8. 8 © Copyright Tariff Consultancy Ltd. All rights reserved TCL Tariff Trends SnapShot no. 1 Developments in EU Roaming Roaming Mobile Data Bundles are becoming more common For example: TeliaSonera has been offering its regional package since May 2011: TeliaSonera has introduced a roaming package with calls, SMS & Mobile Data across its subsidiary networks in the Nordics & Baltics including partner companies in Denmark, Estonia, Finland, Latvia, Lithuania, Norway, and Sweden. Introduced in May 2011 TeliaSonera offered Mobile Surfing & Laptop Surfing across all Baltic & Nordic networks at the following rates: -Mobile Surf – 20 MB data allowance for 29 SEK (€2.31) a day -Mobile Laptop – 50 MB data allowance for 59 SEK (€6.82) a day

9. 9 © Copyright Tariff Consultancy Ltd. All rights reserved TCL Tariff Trends SnapShot no. 1 Developments in EU Roaming For Summer 2012, EU MNOs have typically adopted their existing tariff roaming bundles to accommodate the new EU roaming cap, but there is limited new tariff innovation. Wind (Italy) has adjusted its existing Pre Pay (Daily Travel Europe) and Post Pay (Easy Travel Europe) call roaming bundles from July 2012 which include countries in the EU & Croatia. The roaming packages are: Daily Travel Europe (Pre Pay) Calls made for €0.20 per minute (€0.08 to receive calls per minute). There is an additional charge of €0.50 per day & a once-off activation charge of €5. Easy Travel Europe (Post Pay) Calls made for €0.15 per minute (€0.08 to receive calls per minute). There is a monthly charge of €3 per month (free for 2 months).

10. 10 © Copyright Tariff Consultancy Ltd. All rights reserved TCL Tariff Trends SnapShot no. 1 Developments in EU Roaming Wind has also adjusted its Mobile Data roaming packages, which include 4 Bundles, these are: Daily Travel & Smartphone Europe & USA (Pre Pay) Weekly Web Travel Weekly Europe & USA (Post Pay) Daily Travel & Smartphone World (Pre Pay) Web Travel Weekly World (Post Pay) Daily Travel & Smartphone Europe & USA Pre Pay (recharge) 50 MB Mobile Data per day for €2.50 per day and a €5.00 activation fee. Daily Travel & Smartphone Europe & USA Pre Pay (recharge) 50 MB Mobile Data per day for €2.50 per day and a €5.00 activation fee. Daily Travel & Smartphone World (includes 40 countries) Pre Pay (recharge) 15 MB Mobile Data per day & a €.00 activation fee Web Travel Weekly World (includes 40 countries) Post Pay 30 MB Mobile Data per week & a 5 Euro activation fee.

11. 11 © Copyright Tariff Consultancy Ltd. All rights reserved TCL Tariff Trends SnapShot no. 1 Developments in EU Roaming SFR (France) There are 2 SFR roaming Packs including: Calls of 30 minutes & Mobile Data of 20 MB valid for 7 days for €9.00 Calls of 60 minutes & Mobile Data of 20 MB valid for 7 days for €15.00 Telekom (Germany) Offers Travel & Surf Package for the EU (Country Group 1) and USA (Country group 2) and Rest of the World (Country Group 3) including: Country Group 1 Day Pass S – 10 MB for €1.95 Euro Day Pass M – 50 MB for €4.95 Euro Week Pass – 100 MB for €14.95 Euro European MNOs have introduced roaming packages – in general with separate bundles of calls, texts and Mobile Data packs which are valid for either a week (7 day period) or a month (30 day period). A new roaming trend is for selected MNOs to offer an integrated roaming bundle of calls, SMS and Mobile Data for a Weekly or a Monthly tariff fee.

12. 12 © Copyright Tariff Consultancy Ltd. All rights reserved TCL Tariff Trends SnapShot no. 1 Developments in EU Roaming Selected European MNOs have responded to the Euro-price cap regime by raising their call, SMS & Mobile Data roaming prices to non-EU regions, typically the other European, USA and Rest of the World regions. But over time the trend is for roaming pricing outside the EU region to gradually decline. The trend in Call and Mobile Data roaming pricing from the EU to the USA is shown from 2010 to 2012 in the graphs in the next 2 pages.

13. 13 © Copyright Tariff Consultancy Ltd. All rights reserved TCL Tariff Trends SnapShot no. 1 Developments in EU Roaming Call roaming to the USA in € per minute (from 2010 to 2012) In the chart above, TCL shows the trend in voice roaming rates to the USA from 2010 to September 2012 with a steady downward trend in pricing. Source – TCL

14. 14 © Copyright Tariff Consultancy Ltd. All rights reserved TCL Tariff Trends SnapShot no. 1 Developments in EU Roaming Mobile Data roaming costs in € per 1 MB from 2010 to 2012 In the chart above TCL shows the roaming standard rates for selected European postpaid subscribers for 1 MB of data whilst roaming in the USA from 2010 to 2012. There has been limited change in Mobile Data pricing over the period. Source – TCL

15. 15 © Copyright Tariff Consultancy Ltd. All rights reserved TCL Tariff Trends SnapShot no. 1 Developments in EU Roaming T-Mobile (UK) Travel Booster – offers a range of roaming data bundles. In the UK, T-Mobile offers a number of Travel Booster packages for Mobile Data starting at 3 MB for £5.00. And is one of the MNOs which are now offering Data roaming bundles for use in the USA, other countries as well as the EU. Selected Countries 3 MB10 MB20 MB50 MB Euro Travel ZoneEU £1£2.50 £10 International Zone AChina, Russia, Turkey £5£10 £30 International Zone BS. Africa, Singapore £10£20£37.50 International Zone CHong Kong, Kenya, UAE £20£40£75 International Zone D Brazil, Japan, Philippines £25£75£140 International Zone EUSA £5£10 £30

16. 16 © Copyright Tariff Consultancy Ltd. All rights reserved TCL Tariff Trends SnapShot no. 1 Developments in EU Roaming T-Mobile UK also provides a range of European roaming packs which include the following, suitable for Mobile Data, Calls and Texts. Roaming BundleBundle elements Bundle options PriceValidity Euro Internet Booster3 MB £124 hours Euro Internet Booster20 MB £57 days Euro Internet Booster50 MB £1030 days Euro Talk & Text96 minsor 85 SMS£5.1030 days Euro Talk15 mins £5.1030 days Euro Text60 SMS £5.1030 days

17. 17 © Copyright Tariff Consultancy Ltd. All rights reserved TCL Tariff Trends SnapShot no. 1 Developments in EU Roaming Both Vodafone & Orange offer a standard EU roaming bundle of calls, SMS & Mobile Data which is being deployed in multiple territories launched in mid-2012 Vodafone Spain Talk & Surf Europe €4.72 per day tariff (including tax) Includes 20 minutes of calls, 20 SMS and 20 MB of Mobile Data Orange France – Orange Travel €5 per day tariff (including tax) Includes 10 minutes of calls, 10 SMS and 10 MB of Mobile Data Vodafone has started to introduce from the end of June the product for Pay Monthly users to use their domestic allowance in Europe for a daily fee of € 3 or €4. Vodafone UK offers a EuroTraveller roaming fee for GBP 3 per day which allows the Pay Monthly allowance to be used.

18. 18 © Copyright Tariff Consultancy Ltd. All rights reserved TCL Tariff Trends SnapShot no. 1 Developments in EU Roaming Conclusions The EC roaming price cap has provided a floor on EU roaming tariffs with little pricing below the imposed price cap apparent. A handful of MNOs are launching roaming services as part of a “Premium” smartphone package which is a new trend. But most European MNOs are launching bolt on roaming packs which can be applied to Smartphones. The first packages have been used within the EU zone for calls & texts followed by Mobile Data with the increased penetration of the Smartphone. But now the European MNO is deploying roaming bundles to non-EU countries and is increasingly focussed on Mobile Data roaming bundles.

19. 19 © Copyright Tariff Consultancy Ltd. All rights reserved TCL Tariff Trends SnapShot no. 1 Developments in EU Roaming A P E N D I x I: V O I C E FROM 30 AUGUST 2007 RetailOriginated 0.49 Euro per minTerminated 0.24 Euro per minute Wholesale0.30 Euro per minute FROM 30 AUGUST 2008 RetailOriginated 0.46 Euro per minTerminated 0.22 Euro per minute Wholesale0.28 Euro per minute FROM 1 JULY 2009 RetailOriginated 0.43 Euro per minTerminated 0.19 Euro per minute Wholesale0.26 Euro per minute FROM 1 JULY 2010 RetailOriginated 0.39 Euro per minTerminated 0.15 Euro per minute Wholesale0.22 Euro per minute FROM 1 JULY 2011 RetailOriginated 0.35 Euro per minTerminated 0.11 Euro per minute Wholesale0.18 Euro per minute FROM 1 JULY 2012 RetailOriginated 0.29 Euro per minTerminated 0.08 Euro per minute Wholesale0.14 Euro per minute FROM 1 JULY 2013 RetailOriginated 0.24 Euro per minTerminated 0.07 Euro per minute Wholesale0.10 Euro per minute FROM 1 JULY 2014 RetailOriginated 0.19 Euro per minTerminated 0.05 Euro per minute Wholesale0.05 Euro per minute

20. 20 © Copyright Tariff Consultancy Ltd. All rights reserved TCL Tariff Trends SnapShot no. 1 Developments in EU Roaming A P E N D I x II: D A T A Data roaming is also subject to a cap, but at the wholesale rate not at a retail rate (from the 1st July 2012, the data retail price has too been capped). Wholesale July 2009: Capped at 1 Euro per MB as well as per 1 kilobyte increment billing was imposed. July 2010: Capped at 1 Mbyte was reduced to 0.80 Euro July 2011: Capped at 1 Mbyte was reduced to 0.50 Euro July 2012: Capped at 1 Mbyte was reduced to 0.25 Euro July 2013: Capped at 1 Mbyte was reduced to 0.15 Euro July 2014: Capped at 1 Mbyte was reduced to 0.05 Euro Retail From the 1st July 2012, retail rates are capped at Euro 0.70 per 1 Mbyte going down to Euro 0.45 on 1st July 2013 and then to Euro 0.20 per 1 Mbyte on the 1st July 2014. Other regulation Since the 1st July 2009, operators need to supply Default notification SMS with roaming prices and a free number to call to obtain detailed roaming prices. From the 1st July 2010, the EC has instructed that the mobile operator has to provide the customer with a ‘cut off’ limit – where the customer can set his own data roaming charge limit. After the data limit is reached, the operator will have to cease the service – unless instructed by the customer to continue.