International roaming explained - Asia Pacific - GSMA
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International
roaming explained
Asia Pacific
Contents
1. Mobile roaming explained..........................1
2. Mobile roaming in the Asia Pacific.......... 5
3. Price trends................................................ 11
4. Impact of regulation..................................12
5. Best practice.............................................. 15
31. Mobile roaming explained
International mobile roaming The most common international roaming
is a service that allows mobile services are:
users to continue to use their Voice: Making and receiving calls to
mobile phone or other mobile or from home country, visited country
device to make and receive or a third country, while abroad
voice calls and text messages, SMS: Sending and receiving text
browse the internet, and send messages to or from home country,
and receive emails, while visiting visited country or a third country,
another country. while abroad
Email: Reading and replying to
Roaming extends the coverage of the emails while abroad
home operator’s retail voice and SMS
Mobile broadband: Using mobile
services, allowing the mobile user to
devices or dongles to access the
continue using their home operator
internet, including to download images,
phone number and data services within
MP3s, films and software, while abroad
another country. The seamless extension
of coverage is enabled by a wholesale Applications: Using mobile
roaming agreement between a mobile applications while abroad that require
user’s home operator and the visited mobile data, such as location-based
mobile operator network. The roaming services and language translators.
agreement addresses the technical and International mobile roaming is one of a
commercial components required to wider range of communications services
enable the service. offered to mobile users while travelling
abroad. Other services include hotel
services, Wi-Fi, national global SIMs
cards, multiple SIM card mobile handsets,
and local pre-paid SIMs cards.
1How mobile roaming works
When a mobile user is abroad and turns a visited mobile network. The visited
their mobile device on, the mobile device network picks up the connection from
attempts to communicate with the user’s mobile, recognises whether
Initiated call Received call
Visited International Home Receiver’s
operator transit operator home
services operator
Figure 1.1 Overview of international roaming technology and operations
To explain roaming in more detail, has wholesale roaming agreements with
Figure 1.2 the shows commercial and more than one operator in the same visited
technical details for international mobile country, which in this case is Visited
roaming. The diagram focuses on the Operator A and a second network, Visited
international roaming wholesale and Operator B. As a result, Mobile User A
retail arrangements, for simplicity. can call home using either visited operator
networks, both of which use international
The mobile user (Mobile User A) has an
transit services to carry the call back to
international roaming service with their
Mobile User A’s home country.
home operator (Home Operator) and
is automatically connected to a visited Mobile User A pays a retail price to Home
network (Visited Operator A) while Operator for the roaming service and
roaming. Mobile User A is automatically does not pay Visited Operator A. Provided
granted access to Visited Operator A’s Mobile User B is not also roaming, they will
network when arriving in the visited not incur any extra charges to receive a call
country by an exchange of a data between from, or to make calls to Mobile User A.
Home Operator and Visited Operator
Visited Operator A sends transferred
A, where Visited Operator A confirms
account procedure (TAP) files to a clearing
Mobile User A is a roaming customer with
house which forwards them to the Home
Home Operator. As such, the wholesale
Operator. TAP files are used for billing of
roaming agreement between Visited
calls while roaming.
Operator A and Home Operator specifies
how this data is to be provided to the Home Operator can then pay Visited
visited operator. Home Operator usually Operator A the wholesale charges as per
2Mobile Mobile
User B User A
RETAIL
it is registered
Home with its system, and The visitedVisited
network also requests
Visited service
attemptsoperator
to identify the user’s home informationoperator
fromAthe home operator
networkB
network. If there is a roaming agreement about the user, such as whether the
between the home networkClearing and onehouse phone being used is lost or stolen, and
WHOLESALE
of the mobile networks in the visited whether the mobile device is authorised
Roaming
country, the call is routed by the visited
agreement for international use. If the phone is
network towards an international transit authorised for use, the visited network
International
network (Figure 1.1). The international carrier creates a temporary subscriber record
transit network carrier is responsible for the device and the home network
for theRoaming
call delivery
services to the destination
Traffic flow updates
Revenue flow its subscriber record on where
Data exchange
network. Once this is done, the the device is located so if a call is made to
destination network will connect the call. the phone it can be appropriately routed.
Mobile Mobile
User B User A
Home Visited Visited RETAIL
operator operator A operator B
Clearing house
WHOLESALE
Roaming
agreement
International
carrier
Roaming services Traffic flow Revenue flow Data exchange
Figure 1.2 Commercial links required for international mobile roaming
call volumes in the TAP file and rates in the the call and handing over the call to Home
wholesale roaming agreement. Operator. International Carrier pays Home
Operator a termination rate for terminating
Visited Operator A pays an international
the call in the home country.
carrier (International Carrier) for carrying
3Data roaming
With the increasing popularity of feature megabytes (MB), which refers to the
phones and smartphones, the use of volume of data transmitted for the
mobile data services while roaming is service used. Data traffic volumes can
set to continue to grow exponentially. vary significantly depending on the type
Mobile data services are typically and use of different data services.
measured in kilobytes (KB) or
Activity Data traffic use
One hour of instant messaging 0.25 – 1 MB
One hour of web browsing 1.5 – 25 MB
Download 100 emails 1 – 10 MB
100 minutes talk on VoIP video calling Around 50 MB
Download one photo 0.05 – 2 MB
Download one MP3 3 – 8 MB
One software download 70 – 800 MB
Download one film 700 – 1500 MB
Streaming one hour of video 250 – 500 MB
Streaming one hour of audio 50 – 150 MB
Figure 1.3: Mobile data traffic volumes1
There are significant differences in the size estimates, as file size depends on
the type of data, quality, and file length. For example, high definition and DVD
quality streaming consumes greater amounts of mobile data than standard video
or audio streaming.
42. Mobile roaming in the Asia Pacific
The mobile environment is growing prepaid subscriptions.5 Asia Pacific’s
in the Asia Pacific region, both in roaming services will continue to
subscribers and data traffic. Roaming develop, as the region hosts just
services, however, are still being 25 per cent of the world’s global
established. Countries within the region roaming market with 42 per cent of
are in different stages of economic the world’s population.6
development, with significant differences
Roaming use and its relevance as
in inflation rates, currency exchanges,
a service for mobile users varies
labour costs and GDP per capita. GDP
significantly across the region. Only
per capita in some Asia Pacific countries
10 per cent of the region’s population
can be up to 56 times higher than others
travelled abroad in 2011 (Figure 2.1),
in the region.2 Overall, the average GDP
with factors such as greater distances
per capita for the region is lower than
between countries and less affordable
in the developed world and four times
travel contributing to this low rate.
lower than in Europe.3
Research has shown up to 80 per cent
There is varying market maturity across of roaming traffic from the region is
the region, with penetration ranging international calls to mobile user’s
from four per cent in North Korea to home country.8
226 per cent in Macau.4 On average,
mobile penetration is one and a half
times less than the European average,
with 83 per cent of mobile users using
65% 35% 10% 7%
Europe North America Asia Pacific Latin America
Figure 2.1 Ratio of international trips to population %, 20117
5Roaming alternatives Regional challenges
The Asia Pacific mobile market is As the Asia Pacific market develops,
evolving in different ways to other parts structural and technical barriers must
of the world, with new lower-income be addressed. Introducing roaming
subscribers and multi-SIM ownership regulation while these obstacles
driving the trend. It is also common remain could result in unintended and
to see Asia Pacific mobile users using unforeseen consequences that negatively
roaming substitutes, such as call impact the industry, mobile users and
back services and international call government revenue. There are active
forwarding services. Certain substitutes and engaged regional groups working
may be more appropriate than others within the region to manage and
depending on national market improve roaming services for users. An
conditions. intergovernmental organisation, the Asia
Pacific Telecommunity (APT), serves
For data roaming, Wi-Fi is generally
as the focal organisation for ICT in the
regarded as the most common substitute
region, covering 38 member countries,
in Asia Pacific. Although Wi-Fi coverage
four associate members and 130 affiliate
in some areas might be limited, it is
members. Its roaming working group
considered that the main reasons for
has been working with regulators and
Wi-Fi being unavailable is low market
mobile operators to review the roaming
demand or regulatory concerns.9 In
environment for mobile users, resulting
general, countries within the Asia
in the recent adoption of guidelines, as
Pacific region believe substitutes provide
part of its working group report.
benefits to budget-conscious consumers
rather than all mobile users.10
6Technical and structural barriers significant proportion of the total
roaming costs. Even with volume
Legal and technical developments are
growth, there is no bargaining
required to combat fraud and liberalise
power for operators working across
international gateways. Combating
monopolised gateways. This means
these barriers is vital prior to any
inter-operator tariffs are likely to
implementation of roaming regulation,
continue to be high. International
as they artificially inflate roaming
long distance termination charges
charges in individual countries.
are another cost that inflates end-
raud remains a major financial
F user prices. Although there has been
concern for operators despite increased much improvement in the level of
efforts and requires further investment competition, international gateway
in technology and negotiation of monopolies remain in at least eight
roaming agreements for minimisation. per cent of Asia Pacific.11 International
Some countries in the region regard roaming call prices between countries
particular types of telecommunications with liberalised gateways are typically
as illegal and bypass, for example 25 per cent lower than between those
traffic concealment by licensed with gateway monopolies.12
carriers to avoid taxes or contribution A sia Pacific countries have worked
to universal service; termination of hard to remove issues of double
traffic by unlicensed operators using taxation in the case of international
technologies like VoIP and SIM roaming, which is a key issue in
boxes; flow of international voice other regions. This is where sales or
traffic from PSTN to PC-to-PC calls other indirect taxation is applied at
through service provided by VoIP a wholesale level on roaming or on
providers. In many countries, however, international inbound services, and
VoIP services are permitted. There produces a situation of double taxation.
is currently no specific investigation
It is important that governments focus on
method for detecting heavy mobile
removing and reducing these structural
callers in relation to bypass through
barriers to help to reduce roaming costs
VoIP and SIM boxes.
for mobile users.
International gateways are the
facilities through which international
calls are sent and received. Where
international gateways are not
liberalised, their costs make up a
7Technical barriers uality of service: Further investment
Q
In addition to structural burdens, the is required in the Asia Pacific region
industry continues to heavily invest to ensure consistent performance of
in meeting the technical challenges the link connections for international
of international roaming. This level roaming. This is so links have
of investment is in addition to the the adequate capacity, reliability,
investment in new technologies to redundancy and diversity available
achieve roll outs of mobile broadband in more developed mobile markets.
across the region. Regulatory Additional investment is also required
intervention on roaming services will to constantly monitor the loading and
affect the ability of operators to invest performance of the links to prevent
in meeting the challenges of national congestion and ensure that the
mobile broadband roll outs. requirements are met.
Technology challenges requiring Inadvertent and border roaming
investment:
In addition to structural and technical
I nteroperability: CDMA technology barriers, incidences of inadvertent and
is in use in some parts of the region border roaming can also affect mobile
which prevents seamless roaming. users. As a region, the Asia Pacific has
Additionally, use of different low travel traffic around borders in
GSM/3G spectrum can prevent comparison to Europe. In many cases,
many low-cost handsets from differences in frequencies used for
roaming. Enforcement of particular mobile devices or existing geographical
technologies and monitoring costs will barriers eliminate the occurrence of
disproportionately burden operators accidental roaming. Where a border is
in less developed countries. Additional divided by a street or river, for example,
investment is required by operators to this is much harder.
provide consistent quality of service
across roaming networks. Operators offer competitive roaming
packages for mobile users in these zones
overage: Network coverage,
C and are continuing to invest in technical
particularly 3G, remains inconsistent measures to eliminate inadvertent
as operators continue to roll out and roaming in narrow border zones.
upgrade their networks. Operators are
investing in consumer communication
and marketing to promote roaming
and ensure transparency.
8Case study: routes, a crucial stage of assessing the
Singapore and Malaysia positive impact of competition was missed.
In May 2011, governments of Singapore Regulators in both countries identified
and Malaysia announced bilateral price benefits of the regulation to be for business
controls on international mobile roaming. users, rather than general mass market
The regulation required roaming price mobile users. On considering income levels
reductions of up to 30 per cent for voice between Singapore and Malaysia, and in
calls and 50 per cent for SMS for all mobile the greater Asia Pacific region, low-end
operators in Singapore and Malaysia. The mobile users on pre-pay subscriptions are
regulators adopted a European Union-style more likely to see travel SIMs as attractive
model of imposing wholesale and retail while post-pay roaming customers will
price caps on voice and SMS. However, most likely be business users or high-end
the regulation did not address evidence of mobile users. In the case of Malaysia and
competitive activity in route pricing, where Singapore, the numbers of Singaporean
evidence is different to the European mobile users that benefit from regulated
Union example. By not reviewing the retail price reductions is three times greater
evidence of competition on high-volume than the number of Malaysian users.
Before regulation After regulation
Singapore retail revenues Malaysian retail revenues Singapore retail revenues Malaysian retail revenues
350 mins x 1 100 mins x 1 350 mins x 0.7 100 mins x 0.7
Wholesale flow Wholesale flow
100 mins x 0.6 100 mins x 0.3
350 mins x 0.6 -15% 350 mins x 0.3 -42%
Singapore revenues Malaysian revenues Singapore revenues Malaysian revenues
350 – 150 = 200 100 + 150 = 250 245 – 75 = 170 70 + 75 = 145
Assumes: Initial retail price = 1, Initial IOT = 0.6. Roaming traffic is inelastic.
Figure 2.2 Macro-financial effects of roaming regulation on voice roaming revenues,
Singapore and Malaysia
9Before regulation After regulation
ngapore retail revenues Malaysian retail revenues Singapore retail revenues Malaysian retail revenues
350 mins x 1 100 mins x 1 350 mins x 0.7 100 mins x 0.7
It has also reduced Singaporean Rather, it has created a welfare
operators’ out-payments
Wholesale flow to Malaysian transfer from
Wholesalethe flow
regulated
operators,
100 mins and
x 0.6total national roaming communications
100 mins xsector
0.3 to businesses
payments from the wealthier, more
350 mins x 0.6 -15 in other
350 mins x 0.3 -42
% economic sectors. This %
developed and densely populated case-study has not provided evidence
Singapore revenues
Singapore to the Malaysian revenues developed
less wealthy, Singapore
thatrevenues
regulatory action Malaysian revenues
on roaming
350 – 150 = 200 100 + 150 = 250 245 – 75 = 170 70 + 75 = 145
and densely populated Malaysia. will improve Asia Pacific regional
communications linkages in the
Despite regulated
Assumes: price
Initial retail reductions,
price = 1, Initial IOT = 0.6. Roaming traffic is inelastic.
longer term.
intervention does not appear to have
increased international roaming traffic
volumes (Figure 2.3). There has been no
elasticity-linked increase in short-term
economic welfare or strengthening of
overall market performance.
450
400
350
300 Singapore to Malaysia
250
200
150 Malaysia to Singapore
100
50
Q1 2011 Q2 2011 Q3 2011
Figure 2.3 Bilateral minute traffic volumes in 2011 (Q1-3)13
103. Price trends
Regionally, market trends are As a result of the trend towards higher
positive and the industry is volumes of data downloaded, operators
committed to taking the lead have introduced innovative data tariff
in developing innovative packages, including flat rate daily,
multi-day, weekly and monthly bundles,
tariffs that suit mobile users.
which deliver transparency and often
Roaming prices are declining significantly lower prices per megabyte
and operators continue to develop than were previously available.
innovative offers, including to
accommodate inadvertent and Examples of different tariffs available in
the region include:
border roaming, as described
in Chapter 2, and to cater for Fixed or flat fee
regional tourism. Additionally, Similar charges for using the same
operators are investing heavily network provider abroad
to address technical challenges A lliance partnerships (SIMs that works
such as interoperability and in specific countries at same rate)
quality of service. F lat-rate data-only SIMs that work in
Mobile operators offer users a menu multiple countries
of tariffs where they can choose tariffs Call home rates equivalent to
depending on their preferences. With local rates.
different needs and uses, mobile users
It should be noted that the structure
can choose the most appropriate tariff
of these roaming tariffs varies widely,
to suit them. If regulation determines
from opt-in regional rates and monthly
one price over another, this would mean
bundles for post-paid customers, to
regulation effectively favours one group
prepaid roaming tariffs and credits.
of mobile users over another.
114. Impact of regulation
Regulators have expressed Impact on developing countries
concerns about the level of The development stages of
roaming charges and consumer telecommunications industry and the
bill-shock. However, this concern levels of use of roaming services vary
should not necessarily translate to significantly among economies in the
a single global or regional solution. Asia Pacific region. The adoption of a
Differences in market conditions single framework to regulate roaming
between countries may determine prices across all Asia Pacific countries
may create unintended or unforeseen
certain higher roaming charges in
adverse impacts to some economies.
some countries and the reasons for
Due to the large variations in GDP,
higher charges. As such, regulators economic growth rates, cost structures
should first address concerns at the and inflation rates in Asia Pacific
local level. countries, it is neither reasonable nor
Uniform regulatory measures may fail to practical to adopt uniform pricing for
address the source of any problem, and international roaming services across
are likely to be detrimental to market all Asia Pacific economies. In addition,
performance. Global regulation cannot volatility in foreign exchange rates
take into account all the different local may reduce tariff transparency if the
market conditions and, as a consequence, uniform price caps across all Asia Pacific
may fail to address policy makers’ economies are priced in US dollars. This
concerns. Additionally, the imposition could place a greater financial burden on
of uniform regulatory measures may developing countries to meet regulatory
introduce new problems that could have requirements, impacting on funds
unintended consequences on mobile users available for other greater needs for the
and the industry. local population, such as subsidised
handsets, or it may result in removing
roaming services all together.
12Impact on tourist destinations developed markets, there appears to
be a wealth transfer from the regulated
Roaming prices in the Asia Pacific are
communications sector to businesses in
substantially lower on high volume,
other economic sector, with no overall
bilateral routes and the highest discounts
increase in economic performance.
are found on the highest volume, and
most travelled routes. Regulation is Competitive market dynamics are
unlikely to acknowledge the difference already strong in the Asia Pacific and
between on-net and off-net14 visited are the best frameworks from which to
networks, and as such reduces the determine the price for international
competitive impact of such offers. The mobile roaming services. Mobile users
economic cost of providing roaming choose a mobile tariff based on the
in tourist destinations may also be full value it provides across a number
significantly greater than the economic of services and operators optimise the
cost of providing mobile services to the pricing and value of the bundled tariff to
local population. Any shortfall might address the needs of their local market.
need to be met through increasing prices Regulating on the roaming elements of
for the local population, which means the tariffs reduces operators’ flexibility
they may end up subsidising the network to tailor its services for the mass market
capacity used by affluent tourists. of end-users. The Asia Pacific region
should aim for a more competitive long
Economic impact
term landscape than has resulted from
The macro-financial implication the adoption of price regulation in to the
of roaming regulation is an overall European Union.15
reduction of financial transfers from
developed markets like Singapore to The mobile sector is a major contributor
other Asia Pacific economies (Figure to Asian economic growth and accounts
2.2). In addition, mobile operators in for an estimated US$485 billion, or
less developed markets are subject to 2.7 per cent of GDP, across the 17 major
greater percentage revenue reductions AP17 countries. It also accounts for 11.4
as inter-operator tariff revenue falls million jobs — and for each job created
in addition to retail revenue, leaving by a mobile operator, there are eight more
less revenue to invest in innovative generated in the mobile ecosystem and
services and extended broadband wider economy. Additionally, in 2010
coverage in the future. Within the more almost US$300 billion was generated
13through various taxes and fees. This
positive contribution of the mobile sector
to employment, public funding and
productivity is important for the
region to sustain and grow. A global
or regional regulation that decreases
coverage, penetration and mobile phone
use may in turn reduce the region’s
economic prosperity.16
145. Best practice
The industry recognises the concern of Only consider price regulation after:
regulators regarding international mobile
– Other measures have been given
roaming prices. However, regulators
sufficient time to conclude there is a
need to also recognise that international
persistent problem
mobile roaming is a complex service,
involving many different factors that – Clear evidence shows that operators
can influence price, as described in offering roaming services have market
this brochure. This complexity creates power — that is, competition in the
a significant risk that regulatory market for roaming services is limited
measures will result in unintended, – Clear evidence shows that the
detrimental consequences for mobile operator company derives its market
users, governments and the industry, power from owning a natural
particularly in the long term. Regulating monopoly
price may result in short-term benefits for – Clear evidence shows the benefit
mobile users; however, these are more exceeds the cost of regulation.
than likely to be offset in the long-term
by a reduction in the level of competition Regional guidelines
and innovation, as evidenced by the
European Union experience. The Asia Pacific Economic Cooperation
(APEC) Telecommunications and
It is for this reason that the industry Information Working Group (TEL)
supports a measured approach to developed the Guidelines for the Provision
regulation, where regulators: of Consumer Information on International
ncourage operators to take measures
E Mobile Roaming17 following a workshop
that enhance mobile user awareness on international roaming. The APT
(transparency and bill shock) of tariffs further developed the guidelines into
when they travel two best practice versions, for mobile
operators and regulators.18 These
ddress structural barriers that
A
documents provide guidance on how to
increase costs for service providers and
address international roaming and raise
mobile users, such as double taxation
mobile user awareness for using mobile
and international gateway monopolies,
services while travelling abroad.
as well as those barriers that hold
back the development of market based
substitutes
15Industry self-regulation These are consistent with the
APEC TEC guidelines and the
In June 2012, the GSMA announced an
APT international roaming working
initiative that will provide mobile users
group report.
with greater visibility of their roaming
charges and usage of mobile data The measures – which already cover
services when travelling abroad. more than a billion mobile users – will
offer a more transparent and uniform
At a meeting held in July, 24 operator
experience for all travellers. These
groups agreed to undertake a number
operators groups agreed to implement
of measures which will help mobile
these data roaming transparency
subscribers better understand their data
measures by the end of 2012, extending
roaming charges and more effectively
the coverage to more than four billion
manage their use of data services.
connections across 120 countries.
The measures include:
ending text messages to remind
S
mobile users of their data roaming
tariffs when they arrive in another
country and turn on their mobile
device
I mplementing a monthly data roaming
spending limit to help consumers
manage their roaming bill and
sending alerts when their data usage
approaches the limit
emporarily suspending data service
T
when use exceeds the spending limit.
16Endnotes
1 h
ttp://www.broadbandgenie. 13 Source: Celcom Axiata
co.uk/mobilebroadband/help/
mobilebroadbandusage-guide-what-can-you- 14 ‘On-Net’ is when a call or message originates
get-foryourgigabyte, accessed 25 June 2012 on the mobile user’s home operator’s network
and terminates to another mobile number that
2 A.T. Kearney 2012 resides with the operator. It does not matter if
the receiver is using the home network or is off
3 Ibid Island roaming with a different provider. ‘Off-
4 Source: EIU, Wireless Intelligence, Merrill Net’ applies when the call or message is made
Lynch Wireless Matrix, A.T. Kearney analysis on a different network, such as while roaming,
or when a mobile user uses their home network
5 Wireless Intelligence Q1, 2012 to make a call or send a message to a number
that resides with a different network provider.
6 A.T. Kearney analysis. Based on detailed
bottom-up data for Europe. Asia Pacific is based 15 Commissioner Kroes’ makes the observation
on high-level estimate and includes wholesale that, in the case of the European Union,
and retail revenues for intra- and inter- region price competition has not emerged in the
roaming EU roaming services markets following
the introduction of price regulation, http:
7 A.T. Kearney 2012. Based on number of trips
europea.eu/rapid/pressReleasesAction.
divided by population so overestimates
do?reference=speech/10/735
percentage of unique roamers. Regions based
on UNWTO definitions. 16 GSMA, Asia Pacific Observatory 2011
8 A.T. Kearney analysis, 2011 17 http://www.apec.org/Home/Groups/SOM-
Steering-Committee-on-Economic-and-
9 Asia Pacific Telecommunity, International
Technical-Cooperation/Working-Groups/
Mobile Roaming Working Group, Working
Telecommunications-and-Information
Group Report, 15 May 2012
18 http://www.apt.int/sites/default/files/2012/05/
10 Ibid
APT_IMR_Working_Group_Report_Final.pdf
11 A.T. Kearney, 2012. Sample for Asia Pacific
based on 24 countries – data not available for 14
12 Source: Gateway Liberalization – Stimulating
Economic Growth, GSMA, February 2007For further questions on
roaming, please contact:
Isabelle Mauro
Head of International Affairs
Email: imauro@gsm.org
Vikram Raval
International Roaming
Regulation Manager
Email: vraval@gsm.org
GSMA Head Office
Level 7, 5 New Street Square
New Fetter Lane
London EC4A 3BF
United Kingdom
www.gsma.com
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