Secondly, it’s hard to accept the a priori conclusion that all the WIR services are “extremely
homogeneous”. Although the ...
make the latter seek to respond to such offers. This is likely to bring the WIR services prices
down as WIR buyers will se...
of 3


Published on: Mar 4, 2016
Published in: Business      Economy & Finance      


  • 1. POLKOMTEL’S POSITION ON ERG COMMON POSITION ON THE COORDINATED ANALYSIS OF THE MARKETS FOR WHOLESALE INTERNATIONAL ROAMING Having conducted an in-depth analysis of the “ERG common position on the coordinated analysis of the markets for wholesale international roaming” Polkomtel is of the view that ERG conclusions, although only of an indicative nature may not fully correspond to the situation on relevant WIR markets in certain Eastern and Central Europe EU Member States, as these markets exhibit to a significant degree different characteristics while compared with the relevant WIR markets of the ‘old 15’. As these conclusions are somehow designed to fit the needs of various markets it is understood that they have to be general, to some degree. On the other hand the significant differences between various markets do not justify some simplifications that in Polkomtel views have been made. Although market definition in terms of its service and geographical scope is likely to be identical (or almost identical) in all Member States Polkomtel believes that national circumstances will affect the outcome of a market analysis procedure to a far greater extent than ERG position seems to suggest. It refers mainly to all the market characteristics that need to be taken into account while assessing the existence of joint dominance, i.e. the criteria listed in art. 14 of the Framework Directive. As far as the Polish market is concerned at least the following comments have to be made. Firstly, it is hard to come to terms with the statement that the relevant market shows no perspectives of noticeable growth in the future. As this may be the case with the old Member States where travel patterns may be relatively stable, although we do not have any data to support such finding, the new countries will surely witness a significant increase in a number of tourists and those arriving on business trips. Accessing countries, as regular EU Members are now looked upon as far more reliable, stable and predictable than they used to. The development of low cost airlines reaching other cities than the capital will surely support this trend. These are the major drivers of the potential rapid growth in retail and consistently wholesale demand on the WIR market. 1
  • 2. Secondly, it’s hard to accept the a priori conclusion that all the WIR services are “extremely homogeneous”. Although the main body of all services have historically been voice and sms services provided over 2G networks these services may differ among the competing operators and this constitutes one of the most important competition tools, where the competition is not only price but also service based. Not all the operators active on the WIR market in Poland are capable of offering 3G services to their roaming partners and thus operators compete offering services with different technologies underlying them, that is to say offering more or less complex and attractive clusters of mobile communications services. Moreover mobile operators compete by offering additional solutions such as GPRS in roaming, CAMEL, short codes, location based services, Internet access and video telephony. They also develop loyalty programmes etc. Thirdly, the immature markets of Central and Eastern Europe cannot be claimed to be free of competition constraints in terms of the potential supply-side competition. A certain degree of investment is required by all telecommunications industry undertakings in order to roll out their networks and launch commercial services, but one cannot prejudge that these investments exclude market entry. A market entry of fourth or even fifth player is imminent in Poland where UMTS and GSM 1800 spectrum distribution is under way and where existing operators already failed to obtain new spectrum allocations. Spectrum availability and other operators’ eagerness to enter the mobile market are natural pricing policy constraints for all existing mobile operators. Polkomtel would also like to underline the growing importance of alternative technologies, which act as an competitive constraint, such as WiFi, WLAN or WiMax. Although these are emerging services at a relatively early stage of marketing, yet not so popular as “traditional” retail mobile roaming services, their importance will grow significantly. One of the most important competitive constraints is the increasing availability of Internet access and VOiP based services provided at alternative suppliers’ hot-spots. It has to be therefore reconsidered whether they should be excluded from the market definition since the number of customers regarding it a substitute to retail roaming services is likely to grow. Moreover, these services are provided by independent service providers and not by mobile operators only (the services are or will be available with mobile handsets equipped with e.g. WLAN cards i.e. they will be easily accessible and hassle-free), which will 2
  • 3. make the latter seek to respond to such offers. This is likely to bring the WIR services prices down as WIR buyers will seek more attractive wholesale prices in order to offer their subscribers retail prices attractive enough to retain them as international roaming users. WIR buyers will therefore exert more and more pressure on further reductions of WIR charges while WIR suppliers will respond to it, lest they should lose the traffic, otherwise taken over by emerging technologies. The abovementioned factors may seriously impact the outcome of market analysis procedure carried out by particular NRAs and that is why it is also necessary to stress that certain important indicators of market power have been left out for some reason. Polkomtel is of the view that all NRAs need to conduct their market analyses in accordance with the ECJ and CFI case law concerning market power, most of all in terms of the criteria that need to be allowed for while deciding whether the marketplace requires regulatory intervention at all. ERG has a leading role in guaranteeing such approach. Another issue that the ERG document does not touch upon is a possible set of remedies to be imposed if any of the EU markets is to be found not effectively competitive. Although it is not advisable to decide about this set at such an early stage of the procedure, where competition problems, if any, are only about to be identified, one has to bear in mind that the remedies must not only be proportionate and adequate, as the directives say, but should also take the utmost account of the overall well-being of all of the European operators as such, i.e. their bargaining power and relations with their counterparts around the world. An excessive exposure to regulation may bring about an asymmetry in regulation in a world scale, where only operators on other continents, largely in North America and Middle Asia, will benefit from the regulation, to the detriment of European subscribers and undertakings. 3

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