Roaming-free ASEAN: practical or pipe dream?

Paul Merry/Informa Telecoms and Media
03 Sep 2012

In a recent interview request I was asked to comment on the demand from Indonesian Communications and Information Minister Tifatul Sembiring to remove roaming fees between ASEAN countries.

In the request the journalist asked two questions:

1.Do you think it would be possible for Asean to become a free roaming region? And if so Why?

2.What steps need to be taken for Asean’s telcos to agree to a no roaming fee agreement?

Whilst ‘free roaming’ is not completely free calls, most likely this is a quirk of translation, the idea of lower roaming calls being championed by a regulatory spokesperson certainly has resonance in the European region.

The stance taken by Tifatul Sembiring is very similar to that taken by Neelie Kroes, the European Commissioner for Digital Agenda. Miss Kroes has expressed her desire that the EU’s roaming rates reach parity with national markets and has undertaken legislation action to achieve this including three rounds of implemented regulation.

Clearly legislative bodies around the world have begun to see the EU approach as something of a blueprint for their own actions toward roaming and as such there may well be the impetus to drive down roaming costs in the ASEAN regions.

However one must also consider the operator perspective. I have written previously about immense profitability of roaming, particularly international roaming. As such there is little impetus from the operator perspective to make ‘roaming-free’ happen.

In Europe regulation has brought some reduction in costs. This legislation has forced operators to cut both retail and wholesale rates and most recently has put in place processes to open the market to competition. But these developments have only come after repeated requests and exhortations by the EU to reduce roaming rates were ignored. This process has been ongoing since 2005 and clearly demonstrates the level of resistance surrounding reducing roaming rates.

As well as operator resistance to retail roaming rates reductions we must also consider the wholesale market in ASEAN. If retail rates fall what happens to the charges made between operators to interconnect and payments made to international transit providers (although this would be less of an issue between ASEAN countries) to facilitate the roaming call? Costs must be met somehow.

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