The whitepaper examines the 2014 EU regulation that allows European telecom subscribers to buy roaming services from alternative roaming providers (ARPs), independent of the home country telecom service provider (domestic service provider), while keeping their existing SIM cards and phone. Download the whitepaper to learn more.

1. Whitepaper
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What operators need to know about the
2014 EU roaming regulations

2. Table of Contents
EU roaming regulation background….3
What are the commercial implications?
EU roaming market changes
First model: Alternative roaming provider (ARP)
Second model: Local break-out (LBO)
Implications for the domestic service provider
ARP infrastructure requirements
LBO infrastructure requirements
Is there any business case for ARPs?
What about LBO?
Where Computaris can help
EU 2014 ROAMING REGULATION PLATFORM FEATURES
Reading recommendations and disclaimer

3. EU roaming regulation
background
The EU Roaming Regulation is part of the
EU digital agenda, with specific aim to
increase customer protection and move
towards a unified European mobile market.
While the EU Commission & Parliament
laid down the legal foundation, BEREC
(Body of European Regulators of
Electronic Communications) has defined
the technical regulation that all operators
offering roaming services needs to comply
to.
The new roaming regulations allow
European telecom subscribers to buy
roaming services from Alternative
Roaming Providers (ARPs), independent
of the home country telecom service
provider (domestic provider), while
keeping the same SIM card and phone.
According to the EU Commission, this
should increase the competition on the
roaming market, and should create a truly
pan-European market for roaming
services, as any EU mobile operators
would be able to target all EU customers.
On the long term, the aim would be to
create the premises for 'roam like home'
type of services, where there is no
difference between domestic and roaming
tariffs.
In simple words, the regulation allows
European telecom subscribers to buy
roaming services from Alternative
Roaming Providers (ARPs), independent
of the home country telecom service
provider (domestic service provider), while
keeping their existing SIM cards and
phone. The domestic service providers are
required to implement the prerequisite
changes in their network to allow this. The
regulation is enforced by legally binding
documents from EU
Commission/Parliament and supported by
technical specifications from BEREC.
While documenting our research, we
thoroughly studied the relevant
documentation for the regulation:
1. Jul. 2012 – Regulation (EU) No
531/2012 of the European Parliament
and the Council
2. Oct. 2012 – BEREC Guide – LINES
ON Art 3 & BEREC opinion on Art 4&5
3. Jan. 2013 – EC Implementing Acts on
Art 5
4. Jul. 2013 – Adoption of BEREC
guidelines on art. 4 & 5
Objectives
From both the political and economical
points of view, the goals of these
regulatory changes are aiming for:
/ A tighter integration across EU telecom
market
/ An increased competition at retail and
wholesale level
/ A gradual move towards a “roaming free”
Europe
The EU Parliament and Commission
documents are legally binding.
BEREC documents are not legally binding
but used by National Regulation Agencies
to enforce implementation.
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What operators need to know about the
2014 EU roaming regulations
page 3

4. What are the commercial
implications?
The purchase of roaming services
separately, from an ARP and not from the
domestic service provider is called
"unbundling" or "decoupling". According to
EU, the decoupling addresses the lack of
competition and aims to have an impact on
the retail roaming price by reducing it.
Currently, the major factor for choosing a
mobile operator is considered to be the
domestic price and very rarely the roaming
service. The majority of users have to
either accept the roaming prices imposed
by their domestic service provider, or
change their SIM/phone while roaming for
a more attractive offer.
In parallel with the decoupling, the
regulatory framework imposes new
roaming price caps for voice, SMS, data at
both wholesale and retail level. Price caps
for retail data were introduced with the
latest regulations. Having the maximum
retail levels defined, the power of
wholesale negotiation will be very
important for the commercial success of
any Alternative Roaming Provider.
By separating the roaming service from
the home country service, the regulation
aims to open up the competition on the
roaming services within EU. In theory,
competition on roaming will naturally lead
to a reduction of retail prices. The
implications for EU citizens could be
positive, on the other hand a decrease of
roaming revenue may be observed at
operators' side triggered by both
competition and imposed price caps.
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What operators need to know about the
2014 EU roaming regulations

5. EU roaming market changes
Terminology
There are two decoupling models, each
having different impact on the operator
network.
Before explaining them, it’s important to
understand the terminology:
• DSP: Domestic service provider is the
telecom service provider that supplies
the mobile services in the home country.
It can be either a fully fledged network
or an MVNO
• ARP: Alternative roaming provider is the
entity that provides the alternative
roaming service
• LBO provider is an ARP that provides
only local data services in the visited
country
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What operators need to know about the
2014 EU roaming regulations
page 5

6. First model: Alternative
roaming provider
In this model, regulated roaming voice,
SMS and data are purchased together
from an Alternative Roaming Provider. The
user must enter into a billing relation
(contract/ prepaid) with the ARP.
The ARP coverage is only for regulated
services (simplistically the user must be
roaming within EU, and call/text towards
EU destinations or use roaming data),
however coverage can be extended based
on commercial agreement with the
Domestic Service Provider.
This model is technically called 'Single-
lMSI'.
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What operators need to know about the
2014 EU roaming regulations

7. First model: Alternative
roaming provider
From the B2B perspective, in this model
the ARP has a wholesale contract with the
DSP, and a retail contract with the end-
customer, resembling to the MVNO type of
business.
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What operators need to know about the
2014 EU roaming regulations

8. Second model: Local break-
out (LBO)
In this second model, the user can
purchase only data services directly from
the visited network where he/she is
roaming, while Voice and SMS are
provided by the existing roaming provider.
To be able to use local data, users must
set a special APN on their handset. To
allow users to use local data from a visited
network of their choice, Domestic Service
Providers must disable steering within the
EU.
If this model wasn't allowed, all roaming
services would have to be provided by one
operator. This model is called 'LBO' - Local
Break-Out. In practice it means that the
internet traffic breaks-out to the internet
directly from the visited network's GGSN,
instead of returning to the home GGSN.
The visited network providing the local
data is called also ARP, or LBO provider to
avoid confusion with first model.
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What operators need to know about the
2014 EU roaming regulations

9. Second model: Local break-
out (LBO)
In this second model, the business-to-
consumer (B2C) relation between the LBO
provider and end-customer is not affected
by any wholesale agreement with the DSP.
The visited network sells directly the data
services to inbound roamers from within
EU.
From the billing perspective, the LBO
model adds further complexity for both the
mobile subscribers and operators. It is
important to note that since a combination
of pure ARP and LBO is possible, the
customer acquisition and experience
management are more complex for all
types of roaming providers.
With the new regulations, the mobile users
can buy all roaming services (voice, SMS,
data) from an ARP or they can buy only
data directly from the visited network.
From the customer’s point of view, this
may generate confusion unless the
differences and advantages are clearly
communicated during acquisition and
subscription life-span. New entrants (ARP,
LBO providers) and existing ones need to
explore new ways and channels to attract
and retain customers.
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What operators need to know about the
2014 EU roaming regulations

10. Implications for the
domestic service provider
For the domestic service provider, the
requirements are fairly complex. At the
same time they would require a low
CAPEX/OPEX solution, as the regulation
does not generate any revenue, but rather
a loss in roaming revenues, as subscribers
can choose a different roaming provider.
To comply, the domestic service provider
must at a minimum level:
• (ARP enablement) Implement the
provisioning process required to enable
ARP subscriptions;
• (ARP enablement) Implement real-time
logic that routes the roaming charging
events towards the ARP systems;
• (ARP enablement) Implement wholesale
billing process with the ARP;
• (ARP enablement) Notify the partner
ARP network of subscriber mobility events
within EU;
• (LBO enablement) Remove steering logic
across EU to allow their users to use LBO
when attached to EU network;
• (LBO enablement) Reject any roaming
data traffic that uses the EU Internet APN.
Optionally, based on commercial
agreements the domestic service provider
may enable additional services for the
ARP:
• USSD service;
• SMS services;
• Fraud management (if the interface to
the ARP charging system is not real-time).
The domestic service providers must
implement a set of IT and network
changes to comply with the regulation. The
existing mobile network architecture has
the greatest impact on the approach that
would be chosen. While the exposed
services towards the ARP are
standardized, the internal changes require
coordination among several departments
and changes in multiple network and IT
systems.
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What operators need to know about the
2014 EU roaming regulations

11. ARP infrastructure
requirements
The ARPs are technically similar to
MVNOs. They do not own the network and
do not have their own roaming
agreements, but are able to sell roaming
services directly on the retail market. Of
course, with the important distinction that
in the case of MVNOs a commercial
agreement is generating the partnership
with the host network, whereas in the ARP
case is the law and regulation that
enforces this partnership.
From this point of view, the infrastructure
that ARPs require is at least comprised of:
• Real-time charging platform
• Prepaid platform for customer
subscription and account balance
management
• Perhaps postpaid capabilities if business
case allows this
• Payments platform for top-ups, voucher
management
• Messaging capabilities for regulated SMS
notifications and customer care
notifications
• Provisioning platform for integration with
the domestic service provider
• Wholesale solution for settlement with
the domestic service provider.
It's fairly obvious that ARPs needs are
similar to those of MVNOs, and, as in the
case of MVNOs, the ARPs need to run at
a considerable lower cost than the
incumbent operators to leave enough
room for profit.
Therefore, choosing an ARP enablement
platform (similar to an MVNE platform)
may be an option to consider for ARPs,
instead of owning the technical platform.
As in the case of LBO business, balancing
between up-front investment (own the
platform) and future business flexibility (the
use of a hosted service, such as an ARP
enabler) is recommended, however both
options are technically feasible.
There is also the case when an
MVNO/MNO becomes an ARP, and in
such scenario the existing infrastructure
and integration experience may be reused.
There is however a significant difference
between ARPs and MVNOs. The former
needs to integrate with multiple networks,
whereas the MVNOs integrate with only
one network in most of the cases (there
are only few cases where an MVNO
integrates with a couple of networks).
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What operators need to know about the
2014 EU roaming regulations

12. LBO infrastructure
requirements
The technical needs of LBO providers are
rather simple and straightforward. An LBO
provider needs to:
• Implement local-break-out functionality in
their network. This is a standard 3GPP
feature, and does not require complex
changes on the legacy infrastructure. This
routes the data traffic from the visited
network directly to the internet, with no
routing back to the domestic service
provider (this avoids wholesale charges).
• Implement a provisioning platform to
send notifications to the domestic service
provider(LBO providers are required to
notify the domestic service provider if a
roamer uses local data)
• Modify the wholesale process, so local
data traffic is not charged to the domestic
service provider.
• Implement data charging functionality for
the inbound roamers using local data.
At the same time, the LBO providers can
enable secondary tools that improve their
insight on the new service and customer
behavior:
• Implement location monitoring, to
understand subscriber movement, and
detect roamers arrival
• Implement reporting across the LBO
solution, for better support of the
marketing process.
From a high level perspective, the
operators that wish to become LBO
providers, need to implement a data
charging solution for inbound roamers.
There are two main approaches to
consider:
• Using the existing prepaid system to
control LBO data usage has some
advantages:
• No additional software to deploy
• May (if possible) reuse existing licensed
capacity
• No new technology/learning time
• Potentially fast roll-out.
• Using an adjunct system only for LBO
usage offers following advantages:.
• Avoids complex changes in the existing
systems (CRM, Loyalty, Prepaid);
• LBO requires a lightweight approach,
rather than heavy prepaid system.
• LBO flexible license may cope with
seasonal variations in traffic, whereas
most incumbent prepaid systems require
up-front license upgrade.
• Separate Voucher Management,
payments.
Essential
To become LBO providers, operators need
to have prepaid data charging and
support full LBO customer lifecycle with
minimal cost. Depending on the existing
infrastructure, an adjunct system may work
best or changing the existing platforms
could prove less costly. Either way,
implementing LBO is rather straightforward
from the technical perspective and roll-out
can be done in a very short time frame.
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What operators need to know about the
2014 EU roaming regulations

13. Is there any business case
for ARPs?
The ARP is the most challenging business
model inside the new legal environment,
as the cost base is dependent on the
wholesale prices offered by the domestic
service provider, and the revenue is limited
by the capped retail prices. It is expected
that the domestic service providers will
charge the maximum regulated wholesale
price. The model is very close to the
MVNO model, where a strong differentiator
is required to be able to succeed. A few
models seem to have most chances of
succeeding:
1. Heavy MVNOs, if they have negotiation
power; These business already have the
platforms and the implementation cost
would be minimal
2. Roaming MVNOs expanding into the
ARP model. These operators have the
technical know-how and the technical
platforms to become ARP. They already
excel at marketing roaming services
3. Travel agencies/touring operators if they
can bundle the mobile service with their
core product. Such entities would need to
run on top of a ARP Enabler (similar to
MVNE business), and use the mobile
service only as differentiator. As a
competitive retail price is not very likely to
be possible, part of the cost for the mobile
service would have to be absorbed by the
travel agency, striving to generate more
sales of their main travelling services.
ARP is a niche model, where the business
model needs to be carefully crafted. As
with MVNOs, the ARPs are dependent on
the wholesale prices offered by the
domestic service provider, therefore
wholesale negotiation power, the ability to
attract subscribers and the capability to
differentiate beyond price are key
elements on the path to a commercially
viable and successful business model.
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What operators need to know about the
2014 EU roaming regulations

14. What about LBO?
The LBO model is perhaps the most
compelling scenario that the new
regulation brings on the EU market. Visited
networks have now the opportunity to sell
data directly to the roamers, without
retributing the domestic service providers.
As roamers attach to the network to use
cheaper local data, they also use the
Voice/SMS through the visited network, so
revenue is also generated from wholesale
Voice/SMS. Overall, this can be a
disruptive model that has significant
chances of adoption, especially in
countries with large number of visitors
(touristic countries). A business case can
be built easier, as operators already have
the numbers that can be put in a financial
model (number of inbound roamers,
roamers service usage, types of handsets,
etc).
From the service proposition point of view,
LBO has also special requirements:
• Marketing channels - where, when, how
to I attract & enroll customers
• Easy to understand services offering
• Smooth customer experience for
activation, self-service, payment
• A prepaid service is most likely to be
considered to offer both cost control to
the user and protect operator from debt
• Focus on customer acquisition rather
than retention.
While LBO is an obvious revenue
generator to consider, following variables
need to be factored into the business
case:
• Implementation costs
• Systems licensing and dimensioning
must be optimal to adapt to seasonal
variations
• Operational costs should be reduced by
offering self service and payment
automation
• Business intelligence and reporting - this
is a new service, and precise performance
indicators must be built and monitored
Operators can consider one of the
following implementation options:
/ Implement LBO on the existing platforms
(charging, voucher management, self
service, etc.)
/ Use a Pay as you Grow model with on-
premises virtualized deployment. Monthly
license can be based on a number of
active users per month, or percentage of
revenue generated by the platform
/ Use a SaaS model where the platform is
fully in the cloud.
Advantages
Each model offers technical and
economical advantages, and the decision
must be taken by properly balancing
between cost control (platform fully in the
cloud) and flexibility (local
implementation).
LBO has significant potential adoption
across EU under the current regulation.
Having relevant data already available,
operators can build a business case for
LBO, having access to accurate forecasts,
being able to take better investment
decisions. At the same time, operators
have several technical options to choose
from, ranging from virtually zero
investment to fully owning the technical
solution.
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What operators need to know about the
2014 EU roaming regulations

15. Where Computaris can help
Computaris
platform
For domestic service
providers
For ARPs For LBO providers
Telecom application
server
Real time signaling routing for SS7 and IP
protocols
Mobility messages towards ARP
SMS&USSD services (ARP IF1, IF2, IF3, IF4,
IF5, IF9) from BEREC specifications
Voice call control
SMS/data charging
SMS & USSD services
9ARP IF1, IF2, IF3, IF4, IF5, IF9) from
BEREC specifications
Management of MAP signaling for BI (inbound
roamers movement) and triggering marketing
messages (LBO IF1 from BEREC specifications)
Real time mediation
platform
Real time signaling routing for IP protocols
(ARP IF2 AND IF3) from BEREC
specifications
Real time signaling routing for IP
protocols
(ARP IF2 and IF3) from BEREC
specifications
Diameter routing agent functionality between
GGSN, incumbent OCS and LBO OCS adjunct
(Optional)
Real-time prepaid
charging platform
Not applicable Real time charging 7 rating for ARP
subscriptions
Subscription & account balance
management
Real time charging&rating
Subscription and account balance management
VMS platform Not applicable Scratch cards
Virtual vouchers
CC payments
Scratch cards
Virtual vouchers
CC payment
Offline mediation
platform
TAP IN files filtering (ARP IF6 from BEREC
specifications)
TAP IN files pre-processing (ARP IF6
from BEREC specifications)
Filters out data CDRs before they reach the
wholesale platform 9relates to LBO IF3 from
BEREC specifications) or
TAP OUT files filtering (LBO IF3 from BEREC
specifications)
Provisioning
platform
Allows ARP subscription provisioning
Interface towards ARP
Interface towards LBO provider
(ARP IF7 from BEREC specifications and LBO
IF3 from BEREC specifications)
Allows ARP subscription provisioning
Interface towards DSP (ARP IF7 from
BEREC specifications)
Allows LBO subscription notifications towards the
domestic service provider
Allows internal provisioning in the LBO platform
(LBO IF2 from BEREC specifications)
Reporting Generate relevant reports and statistics to
support the business decision making process.
Generate relevant reports and statistics
to support the business decision making
process.
Generate relevant reports and statistics to
support the business decision making process.
page 15
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What operators need to know about the
2014 EU roaming regulations

16. Reading recommendations
and disclaimer
Regulation
• BEREC guidelines on the application of
article 3 of the roaming regulation -
wholesale roaming access. Read more
here
• BEREC guidelines on roaming regulation
(EC) no 531/2012 (3rd Roaming
Regulation, articles 4 and 5 on separate
sale of roaming services). Read more here
• BEREC guidelines on roaming regulation
(EC) no 531/2012 (third roaming
regulation, excluding articles 3, 4 and 5 on
wholesale access and separate sale of
services). Read more here
• International roaming BEREC benchmark
data report July 2012 - March 2013. Read
more here
• BEREC international roaming compliance
report (regulation (EU) no 531/512 of the
European Parliament and of the council of
13 June 2012 on roaming). Rea
• BEREC views on the proposal for a
regulation "laying down measures to
complete the European single market for
electronic communications and to achieve
a connected continent". Read more here
Legal:
• Regulation (EU) no 531/2012 of the
European Parliament and of the Council.
Read more here
• Commission implementing regulation
(EU) no 1203/2012. Read more here
DISCLAIMER
The 2014 Roaming Regulations will be
reviewed by EU Commission in 2016,
therefore other regulatory and legal
changes may be introduced at that time or
before. The current analysis is based on
the latest published documents as of Jan
2013, and regulatory changes beyond this
date may invalidate part of this document.
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What operators need to know about the
2014 EU roaming regulations

17. /
Thank
you!
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[+44]20.7193.9189
www.computaris.com