Dr. V. Sridhar and G Krishna Kumar. The authors are Research fellow, Sasken communication Technologies and ,Vice President, Symphony Teleca, respectively. Views are personal
Key Highlights:
- Domestic Roaming contributes to 6 to 8% of the Operators' revenue
- Multi SIM mobiles are reducing hte relevance of roaming
- Free roaming is prevalent in advanced economies
- EU has been struggling with high data roaming
- Lack of 3G roaming regulation could be a matter of opertaors' dispute
- Subscribers might end up paying more than current rate
Roaming is the ability of a
subscriber from a particular network (referred to as Home network) to use
the mobile phone of the same or different network provider (called as Roaming
network) while moving to a different service area. A roaming agreement is
needed between the networks that would enable exchange of information between
these networks for authentication and billing purposes.
Roaming can be intra-circle (i.e.
within Karnataka) or inter-circle (i.e. across Delhi and Karnataka). In the
former case, though the operator has license and associated spectrum in the
circle, it might not have deployed the access network to enable coverage due to
economic reasons and hence has an agreement with another operator who has
deployed network in that area to allow roaming of its subscribers. This method
in general reduces duplication of network elements and allows optimal
utilization of scarce spectrum amongst the operators. Intra-circle roaming has
been allowed in India since June 2008 and is seen an excellent example of
competitive collaboration (aka co-opetition). For the user, it is
almost seamless as there are no additional roaming charges
levied. Though roll-out obligations exists, the quality of
service norms are not stringent enough to guarantee 100 percentage subscriber
coverage either through own infrastructure or via intra-circle roaming. It is
time that the regulator mandates full coverage by operators especially in rural
and remote parts of the country.
However, in case of inter-circle
roaming, the operator does not have license and/or the associated spectrum to
provide access services and hence has a contract with the roaming operator(s)
to provide roaming services. There is often an inter-operator wholesale
reciprocal roaming agreement determined between operators and based on this
retail roaming charges as paid by the subscribers are fixed. In the case of
voice roaming, the TRAI regulation implemented in 2007 ensured no rental or
surcharges be levied by the operators. TRAI has also regulated the maximum
permissible per minute charges for roaming calls, irrespective of the
terminating networks, and irrespective of tariff plans. These measures and the
competition level in each circle have ensured that the retail roaming charges
are closely aligned to cost of roaming. Domestic roaming still contributes to
about 6-8% of the operators’ revenue. There is every incentive for the
operators to extract extra rents from subscribers if roaming charges are not
regulated. However, innovations such as multi SIM mobiles have also reduced the
relevance of roaming. The user who often roams, typically has two SIMs, one
from the home operator and another from an operator in the roaming circle to
reduce the roaming charges to the bare minimum. Hence free roaming across
circles already exists to some extent for voice calls, though policy has just
now been announced, thanks to the general rule that regulation lags behind
technologies and markets. It is to be noted that advanced countries such as
USA, Australia and Canada, have implemented free roaming within their countries
for quite some time. In fact, EU has drawn-up a sliding rate plan to reduce
voice roaming charges so as to make the difference between roaming and national
tariffs to zero by year 2015.
Though detailed guidelines are
awaited on NTP 2012, the implications of free roaming in 3G and Broadband
Wireless Access (BWA) for the provisioning of data and wireless Internet
services is worth exploring. EU has been struggling with very high data
roaming charges across the EU countries and has set a goal of bringing down the
data roaming charges from 90 cents per MB of data by July 2012 to 50 cents by
July 2014. EU has also defined ceiling charges for wholesale rates, between two
operators.
Our handsets are smart enough to
ask us whether we want to use data services while roaming across circles just
to make sure that there are no bill shocks! With just two operators having pan
India spectrum for 3G and Broadband Wireless Access (BWA), will free roaming
have an impact on the operators and on the subscribers? What is unique about
data roaming is that usage is typically initiated by the subscriber
(except in case of VoIP calls) unlike voice calls and also, the data packets
are confined to roaming network and not routed through the home network.
Hence the inter-operator whole sale agreements should be much simpler wherein
the roaming operator charges for all data usage of the roaming subscribers and
pass it on to home operators for collections. Hence free data roaming (i.e.
without additional roaming surcharge) is easily implemented compared to free
roaming of voice subscribers. However, the operators’ hands are tied with
respect to appropriation of reciprocal inter-carrier wholesale roaming charges.
This may possibly result in operators refusing to provide roaming. Hence the
vital role of the regulator to curb such practices as otherwise subscribers may
wander with no network coverage.
Research studies on this topic
point out to the deployment of non-overlapping coverage networks and related
spectrum and network sharing arrangements, if roaming charges are not
regulated, as has been happening through 3G roaming pact amongst the operators
and is the subject of dispute. In case of free roaming, the operators are
likely to either (i) deploy networks since extra rent cannot be appropriated through
roaming or (ii) increase the home usage charges to offset the wholesale roaming
pacts. The former one is unlikely across circles as the operator has to
purchase spectrum at high prices. Hence the latter is more likely. The
subscriber will end up paying more than current rates across the board!
There is another possibility
which is a silver lining to this whole episode. It is very likely that both the
home as well as roaming operators, by themselves, or by tying up with Internet
Service Providers (ISPs) provide Wi-Fi (the wireless network operating over
unlicensed band) hot spot access at substantially reduced usage charges to
address the requirements of roaming data users.
This should be good news for
business savvy niche and nimble ISPs to take note of and improve Wi-Fi hotspots
penetration in our country!
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