Mobile connectivity beyond borders

Czech detector
Technological developments could facilitate roaming

Verena Weber, OECD Science, Technology and Innovation Directorate

Do you remember the “not-so-good old days”? When you were delayed while travelling abroad and it was too expensive to use your smartphone to check for alternatives online and inform the people you had to meet?

While recently travelling in Germany, I found myself in exactly this situation – in a train that was delayed at a station, but this time with the difference of having a roam-like-at-home plan.

While I was checking online maps to see how I could still make my appointment on time, I was chatting with friends, agreeing on a new meeting place and receiving real-time updates from another friend on the train delays. All of this was included in my normal French mobile plan, without any additional costs.

You might stop reading here and think that you still find yourself in the not-so-good old days because your mobile plan does not allow you to roam abroad. At the OECD, we have been following recent developments in international roaming services and have been comparing them across countries.

Our new report on Developments in International Mobile Roaming (IMR) provides an overview of progress made in the implementation of the OECD recommendation on international mobile roaming. We found that since the 2012 OECD Recommendation, IMR prices have been significantly reduced, either by ensuring effective competition or, in its absence, applying regulation.

Since 2012, different mobile operators across the world have developed ‘Roam Like at Home’ (RLAH) plans, which do not require purchasing ‘add-ons’ and use the subscriber’s domestic mobile package, such as the one described at the beginning of this post.  Our report found that these offers are more prevalent in markets with four rather than three mobile network operators (MNOs), likely a result of the additional competition provided by more players.

Wholesale competition, provided by more MNOs, is also key to enabling Mobile Virtual Network Operators (MVNOs) develop additional offers.  Since 2014, for example, some MVNOs in countries such as France, the Netherlands, the United Kingdom and the United States have all begun to offer RLAH offers covering continents – Europe, in the case of the Netherlands and France, and most of North and South America in the case of the United States, as well as one MVNO data RLAH offer announced in April 2015 for over 120 countries for users travelling from the United States. A UK operator reported that on average its customers used 500 MB per trip and, the two million that had travelled since the introduction of the RLAH offer, had saved in total the equivalent of USD 2 billion.

In the absence of sufficient competition, the report shows that authorities have applied regulation, for instance, in the European Union and European Economic Area (EEA). The European Union (EU) regulatory initiatives in the international mobile roaming market have provided a benchmark for many countries outside the EU and have highlighted the role that regional bodies can play in significantly reducing prices and creating competition in IMR services. By 15 June 2017, roaming charges in the EU will cease to exist. As an intermediary measure, from April 2016, roaming will become even less expensive: operators will only be able to charge a small additional amount on top of domestic prices- up to €0.05 per minute of calls made, €0.02 per SMS sent, and €0.05 per MB of data (excl. VAT).

The report also found that several new bilateral agreements which have been concluded or are in the process of finalisation should lead to price reductions and provide a paradigm for other countries to follow suit where there is insufficient competition. Some of these bilateral agreements have also been undertaken between countries with free trade arrangements and could provide a framework to follow for other regions.

Finally, we also took a look at new technological developments, which could play a significant role in reducing roaming charges. Take, for instance, the case of SIM cards that can be associated with multiple operators or, going even further, virtual SIM cards. The Apple SIM is a good example for the first case: It enables consumers to choose the mobile network they prefer for data when they want to connect a mobile device such as an iPad. Users can travel between the UK, the US and Japan, availing themselves of the same rates paid by local users without the need to purchase a local SIM card. Virtual SIM cards, like the Xiaomi Roaming Card, also let travellers roam abroad without swapping SIM cards on their mobile devices.

Overall, being connected to the Internet – be it for people or things – becomes more and more indispensable in an increasingly networked world and one in which your car or medical device could include one or more SIM cards. This report addresses the most recent developments and policies to further meet the growing demand for roaming services. We will continue this work at the OECD with our member countries and stakeholders to further ensure IMR better meets the needs of travel across the globe.

Useful links

OECD 2015 Digital Economy Outlook

The Internet of things

We need to talk

Today’s post is written by Rudolf Van der Berg of the OECD’s Science, Technology and Industry Directorate

Look around you for a second and count the number of electronic devices, machines and gadgets. All of them – light bulbs, cars, TVs, digital cameras, refrigerators, stereos, cranes, beds – will be connected to the Internet over the next 15 years, if they aren’t already.

This is the potential of the “Internet of Things”: billions and billions of devices and their components connected to one another via the Internet. 50 billion devices by 2020, according to companies like Ericsson. The Internet of Things will radically alter our world through “smart” connectivity, save time and resources, and provide opportunities for innovation and economic growth.

The trends are already visible: Internet-connected TVs are now widespread; eBook readers must have a Wi-Fi or 3G connection; smart electricity meters have already become standard in many countries.

The Internet of Things is the subject of a new OECD report, Machine-to-Machine Communication: Connecting Billions of Devices that examines new technology (the drivers behind connecting devices to the Internet); new markets (user and business demands); new policies (what governments can do  to promote this new source of growth).

The basic building block of the Internet of Things is machine-to-machine communication (M2M), devices equipped to communicate without the intervention of humans. Different networking technologies can be used to connect M2M devices, depending on the amount of mobility needed and dispersion over an area. Mobile wireless is often an ideal technology for most applications. However, countries may run out of phone numbers in their current numbering plans as a result of M2M, because 2G and 3G equipped M2M devices require a telephone number to work, unlike 4G where M2M can work with just an IP-address.

M2M creates a new player in the mobile market: the “million device” user. These new large scale M2M users will potentially manage hundreds of thousands of smart meters, cars, and consumer electronics, possibly in higher numbers than some countries have citizens.

Large scale M2M users may offer their services dozens of countries, selling the same devices globally. Their customers may buy the devices abroad and travel with them. The telecommunication industry, however, is still largely organised and regulated on a per country basis. Large M2M users will thus place new demands on telecom companies, and regulation and business models will have to adapt.

Companies creating innovative M2M-based services are currently locked into 10-30 year mobile data contracts and high roaming fees; this dependency hinders the roll-out of new services and innovation.

Governments can set large-scale M2M users free by giving them access to wholesale markets. by changing the rules so that large M2M users can have access to numbers and SIM-cards, just like telecom companies. This will open up the market, break lock-ins, make large M2M users responsible for their own innovation and create a competitive market for roaming for M2M services.

Liberalisation will be a major paradigm shift, and might lead to billions in savings and new services.

Privacy and security need to be designed into products from the start. M2M could allow a detailed view of people’s lives, and parliaments have already curbed or changed some projects as a consequence. For example, cars are increasingly using onboard M2M services and the European Union is now mandating their own service (eCall) to be built into every car from 2014. Since EU legislation requires telephone companies to record a person’s location at the start of each mobile communication, and since turning a M2M car on will itself start a communication, these companies will be inadvertently tracking the start and end of any trip, so even if the automobile company does not register the location, the telecommunication company has to by law.

Governments have tried to make spectrum policy more flexible in recent years, allowing companies to change networking technologies when new technology becomes available. M2M may rigidify spectrum policy, however, because anytime M2M uses a particular networking technology, it expects the spectrum to be there for the lifetime of the device, which is 10 to 30 years. Consumer-oriented wireless technology works on a timescale of a maximum 10 years.

Combining data generated by M2M devices may offer insights to improve society. Cars could notify local governments of icy roads or bottlenecks in infrastructures. This may not always be seen as positive, however, as shown by a case in The Netherlands where anonymous and aggregated data from GPS-systems was used by the police to identify prime locations for speed cameras, which led to a public outcry.

What is certain from the report is that governments will have to change regulations in the telecommunications market, will have to be vigilant to apply privacy and security regulation and stay innovative to make use of the many possibilities it offers. Doing so promises to transform the economy, promote growth in the telecommunications sector, and produce growth and efficiency savings in government and society.

Useful links

OECD work on information and communications policy

OECD work on smart sensors

OECD work on smart grids

OECD statistics on broadband

OECD policy guidance on Radio Frequency Identification (RFID)