Roam Like at Home: Balancing Political Objective with Heterogeneity of Mobile Costs and Usages in Europe

Abstract

This paper analyses the consequences on European markets of the introduction of “Roam Like at Home” (RLAH) obligation, which prohibit any price surcharge for roaming usage within EU. It demonstrates that RLAH cannot be achieved while ensuring both the profitability of retail roaming prices in home markets and the profitability of wholesale roaming prices in visited markets. Roaming retail profitability becomes economically irrelevant as under RLAH, roaming becomes a component of mobile national activity and RLAH is generally sustainable in Europe under current wholesale roaming regulation. Wholesale roaming providers must recover the fully allocated costs of providing the service to avoid undermining the sustainability of national markets. Wholesale roaming regulation can be justified only if the market is not competitive. But regulation on wholesale roaming markets would not erase the heterogeneity of mobile costs and usage in Europe, which is the reason why in a few national mobile markets widely departing from European averages, regulation should allow a limited departure from pure RLAH obligation.