Page 1 of 18 Open call for consulting services Reference Number 026-018 TERMS OF REFERENCE: Support to the implementation of the digital integration measures within the Multi-annual Action Plan for a Regional Economic Area in the Western Balkans Title: Market analysis of domestic and roaming prices of telecom operators in Western Balkans RCC Department: Programme Department Reporting to: RCC Secretariat Duration: 10 th April 2018 – 15 th May 2018 (up to 50 working days) Eligible: Respective legal entities/ or individual consultants within bidding consortia Deadline for applications: 5 April 2018 I BACKGROUND AND PURPOSE Purpose The purpose of this assignment is to perform an analysis of telecom markets in Western Balkans (Albania, Bosnia and Herzegovina, Kosovo*, 1 Montenegro, Serbia and The Former Yugoslav Republic of Macedonia) by identifying all mobile operators active in the region, their market shares in each WB economy, and other important parameters, and by examining actual domestic and retail roaming prices for services they offer to their customers. The analysis should be performed with the aim to identify all operators of mobile services (calls, SMS, and data traffic) active in the region (in each economy) as well as the market structure, ownership and market share, including analysis of at least three largest 2 mobile network operators * This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo declaration of independence. 2 Based on the total number of mobile subscriptions. If the combined market share of the three largest operators is less than 70%, the fourth largest operator should also be included. If there are less than 3 operators active in the economy, two operators are sufficient.
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Page 1 of 18
Open call for consulting services
Reference Number 026-018
TERMS OF REFERENCE: Support to the implementation of the digital integration measures
within the Multi-annual Action Plan for a Regional Economic
Area in the Western Balkans
Title: Market analysis of domestic and roaming prices of telecom
operators in Western Balkans
RCC Department: Programme Department
Reporting to: RCC Secretariat
Duration: 10th
April 2018 – 15th
May 2018 (up to 50 working days)
Eligible: Respective legal entities/ or individual consultants within bidding
consortia
Deadline for applications: 5 April 2018
I BACKGROUND AND PURPOSE
Purpose
The purpose of this assignment is to perform an analysis of telecom markets in Western Balkans
(Albania, Bosnia and Herzegovina, Kosovo*,1Montenegro, Serbia and The Former Yugoslav
Republic of Macedonia) by identifying all mobile operators active in the region, their market
shares in each WB economy, and other important parameters, and by examining actual domestic
and retail roaming prices for services they offer to their customers.
The analysis should be performed with the aim to identify all operators of mobile services (calls,
SMS, and data traffic) active in the region (in each economy) as well as the market structure,
ownership and market share, including analysis of at least three largest2 mobile network operators
* This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the
Kosovo declaration of independence. 2 Based on the total number of mobile subscriptions. If the combined market share of the three largest operators is less than 70%,
the fourth largest operator should also be included. If there are less than 3 operators active in the economy, two operators are
sufficient.
Page 2 of 18
(MNOs) for each economy and number of their customers who are using roaming services,
including Mobile Virtual Network Operators (MNVOs), if any.
Further, the research should provide information on the existing prices for domestic mobile
services (calls, SMS and data) as well as retail roaming prices, including prices of MTR (mobile
termination rate) wherever possible, for each economy (wholesale roaming) and provide
comparative analysis between Western Balkan (WB) economies. This research should provide a
clear overview of prices (while applying the simplified OECD methodology) and differences
between WB economies, and make possible identification of future steps and measures necessary
for decreasing roaming prices and harmonisation of roaming policies in the Western Balkans
region as one of priority measures in the Multi-annual Action Plan for a Regional Economic Area
(MAP REA). Furthermore, this analysis should contribute to the preparation of a Roadmap to
facilitate lowering the cost of roaming as part of the Digital Agenda for the Western Balkans to be
launched by the European Commission, which is expected to be presented in May 2018 during the
EU-WB Summit in Sofia.
Moreover, the purpose of this research is to present the effects of roaming regulation in force in
the EU (the RLAH regime) which resulted in abolishing roaming charges among all EU MS and
also the EEA, to identify implications on the WB economies, to explore effects of the Regional
Agreement on Reducing the Prices of Roaming Services on Public Mobile Communication
Networks3 (Regional Roaming Agreement or RRA) which is already in force in four WB
economies, and thus enable comparison of current domestic and roaming costs in WB.
Background information
The leaders of Western Balkan economies endorsed the Multi-annual Action Plan (MAP) for a
Regional Economic Area at the Trieste Summit held on 12th
July 2017. Upon request of WB
Prime Ministers, the preparation of MAP was coordinated by the RCC with contribution of all 6
WB economies. Furthermore, the RCC is tasked to monitor the implementation and report on the
achieved progress in regular intervals. The MAP has four components and Digital Integration is
one of them. Digital Integration component is further divided into several areas which focus on
improving connectivity, trust and security, digital skills and digital economy. Digital connectivity
among other areas foresees activities on decreasing roaming charges and creation of a RLAH4
economic area through coordination of roaming policies and following the EU’s RLAH model.
So far the RCC Secretariat has been working on analysing the effects of signed RRA on
decreasing roaming charges in the WB region. Therefore, this research should provide additional
analytical input needed for future actions related to coordination of roaming policies, and provide
further guidance for developing a Roadmap to facilitate lowering the cost of roaming, taking into
account present and still high roaming costs in WB (mainly due to high MTR costs), the recent
abolishment of roaming charges in the EU, as well as side effects it has on the WB telecom
markets.
In February 2017, the RCC completed the Study on Market Impact of the Regional Roaming
Agreement which provided analyses of legal, institutional and policy framework for roaming
3 Signed in September 2014 by ministries responsible for electronic communications from Bosnia and Herzegovina, Montenegro,
Serbia and The Former Yugoslav Republic of Macedonia 4 Roam Like At Home
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services in the Western Balkans region, as well as analyses of effects of RRA. The study also
offered analysis of the legal regulation on roaming price caps and marked developments related to
the volume of cross-border traffic.
Coordination of roaming polices towards a RLAH economic area in the Western Balkans remains
a focus of future RCC activities. The new Enlargement Strategy also references this and its
accompanying Action Plan defines the launching of the Digital Agenda for the Western Balkans,
including a Roadmap to facilitate lowering the cost of roaming as a priority for 2018. Therefore,
this research should be prepared with the aim to identify existing standard domestic and
international prices of roaming services (for data, calls, SMS), to compare standard costs between
WB economies (as a basket of goods), for the purpose of coherence ideally in one currency
(€),and to reflect on the impact of abolishment of roaming charges in the EU on Western Balkans
telecom markets.
II DESCRIPTION OF RESPONSIBILITIES
Objectives and Scope of the Assignment
The objective of the study is to develop a better understanding of the developments in mobile
markets by collecting information on mobile services' prices using the OECD mobile pricing
baskets (methodology).
Researching mobile prices is a complex exercise, as mobile operators offer a variety of price plans
for different devices and usage patterns including the bundling of several services. The OECD has
defined 5X3 mobile broadband usage baskets to benchmark prices for handset use (considering
also service bundles) separately. In this study, we will apply the methodology defined by the
OECD.
The methodology adopted by the OECD can be accessed here: http://www.oecd-
and design a tool for collecting data on domestic and roaming prices, and to perform data
collection from the three largest5 MNOs on domestic and roaming prices for three types of
services: calls (incoming and outgoing), SMS and data transfer. To collect data on MTR, the
consultant might need to also conduct a (qualitative) research with national regulatory authorities.
The research should investigate actual prices for domestic and roaming services using available
and comparable data (publicly available, obtained from operators, regulators, or other
organisations) which should be presented in appropriate tables and charts making understanding
and comparison easy for readers. Based on the findings and identified actual prices, the consultant
is required to provide interpretation of results, with comments and explanation of the main
parameters, having performed comparative and other analyses. The report shall also include
(policy) recommendations, with various options described with pros and cons, and the preferred
option identified with the explanation (reasoning why it is the most preferred option?).
The research should cover domestic and EU roaming unit prices for mobile services (outgoing and
incoming calls, SMS, data). The research should distinguish between pre- and post-paid tariff
plans. The research should analyse offers in the different baskets of mobile services defined by the
OECD.
The consultant is also expected to develop and elaborate on the economic model for
standardisation of prices to Euro, and include the local purchasing power parity (PPP)
comparison.
The research should be performed in a way to enable systematised presentation of results, easy
understanding of status, types of contracts and comparability among economies, in both
descriptive verbal way and in graphic way (graphs, tables).
Specific Tasks
The scope of services under this assignment includes the following main activities:
Task 1: Market analysis
Analysis of telecom market in WB should include all Mobile Network Operators (MNOs) and
Mobile Virtual Network Operators (MNVOs) if any, active in the region, standard types of pre-
paid and post-paid contracts for their customers, market structure and ownership (private vs state
owned) and their market shares. This task should offer a clear understanding of existing telecom
market, context, market conditions, available products, and standard tariffing models for pre-paid
and post-paid customers, Average Retail Revenue per User (ARPU), basic information about
customers (number of subscriptions), and other relevant parameters. (National Regulatory
Authorities in the 6 WB economies may provide useful information in that regard)6.
This analysis should also include identification of the number of customers using roaming
services to and from each WB economy. The consultant is required to propose the period (one
5 Based on the total number of mobile subscriptions. If the combined market share of the three largest operators is less than 70%,
the fourth largest operator should also be included. 6 A direct contact with regulators and operators will be pursued by RCC. RCC is also ready to sign non-disclosure agreements
when needed.
Page 5 of 18
year – 2017 or one month, ex. February 2018) based on the most recent available data (subject to
approval and agreement with RCC) for which data will be collected.
In addition to the above mentioned, the analysis of the telecom market in WB should include
(where available and/or where possible) the following aspects:7
- Termination rates (charged to domestic operators, to operators from other WB economies,
and to operators from the EU);
- Wholesale roaming prices charged to and paid to foreign operators;
- Volumes of inbound roaming traffic (from foreign WB operators, from EU operators);
- Outbound roaming traffic (to other WB economies, to the EU), and average monthly retail
roaming consumption.
Based on the last two points (volume of inbound and outbound roaming traffic) the consultant is
expected to provide a series of data (for previous period- subject to agreement with the RCC) that
will enable identification of trends in volume of roaming traffic within WB and from/to EU MS in
light of introduced RLAH model. This part should determine relations between the decrease of
prices and volume of used services, i.e. present impact of RLAH, and enable assessment of future
trends for WB. Results of this part should be presented in annexes to the report, which will be
available only to economies to which they relate.
Task 2: Methodology for data collecting
Coverage of mobile operators
At least three largest mobile network operators should be covered for each economy, based on the
number of mobile subscriptions. If the combined market share of the three largest operators is less
than 70%, the fourth largest operator should also be included. Additionally, if operating, at least
one MVNO per national market should be included in the data collection.
National Regulatory Authorities can be consulted on the list of selected operators subject to
analysis.
The OECD has defined 5X3 mobile broadband usage baskets to benchmark prices for handset use
(considering also service bundles) separately. In this study, we will apply the methodology
defined by the OECD.
The methodology adopted by the OECD can be accessed here: http://www.oecd-