Are EU regulations on Union-wide roaming services applicable to IoT connectivity services?

Telecommunications Alert

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Many regulations and related guidelines have been adopted during 2017's first semester in relation to roaming services. However, it is not very clear whether connected devices and related IoT connectivity services fall within their scope.

Telecom operators providing cross-borders roaming services to their end-users have been pretty busy recently navigating between (i) the new guidelines published on 27 March, 2017 by the Body of European Regulators of Electronic Communications (BEREC) on Regulation (EU) No. 2016/2286 on roaming retail charges, (ii) the adoption of Regulation (EU) No. 2017/920 dated 17 May, 2017 (amending Regulation (EU) No. 531/2012 on wholesale roaming markets), (iii) the subsequent publication by BEREC on 9 June, 2017 of new guidelines on Regulation (EU) No. 531/2012 as amended, and (iv) the entry into force on 15 June, 2017 of the prohibition of roaming charges for call and SMS termination in the EU (in accordance with Regulation (EU) No. 531/2012 as amended).

These new regulations raise the issue of their scope of application, in particular in terms of stakeholders and services covered. More specifically, concerns have emerged as to whether the IoT sector - including connectivity services providers - should be subject to the ex-ante tariffs regulations applicable to roaming services within the EU.

The scope of Regulation (EU) No. 531/2012

Regulation (EU) No. 531/2012 (as amended by Regulation (EU) No. 2015/2120 and Regulation (EU) No. 2017/920) does not clearly define its scope of application. In particular, it does not expressly set whether connectivity services for connected devices are subject to its provisions.

Nevertheless, Section 15 (4) specifies that the transparency obligations that generally apply to telecom operators in relation to their roaming fees should not apply to "machine-to-machine devices" using mobile data telecommunications.

As a consequence, Section 15 (4) seems to imply that, by default, connectivity services for connected devices are subject to Regulation (EU) No. 531/2012 as far as roaming services are concerned.

BEREC's interpretation of Regulation (EU) No. 531/2012: A case-by-case approach depending on the connectivity technology

Although this clarification is helpful, it does not clarify the exact scope of scenarios and roaming technologies that the Parliament and the Council intended to regulate through Regulation (EU) No. 531/2012.

According to the reports and guidelines published by the BEREC, Section 15 (4) should indeed be interpreted "a contrario" as an indication that, by default, Regulation (EU) No. 531/2012 applies to all roaming services including those supporting connected devices.

Having said that, BEREC makes some important clarifications which tend to significantly limit this assessment. Indeed, BEREC's analysis is explicitly based on the assumption that roaming services use 2G / 3G / 4G (or GMS / UMTS / LTE) technologies, which are currently the most widespread standards. In particular, BEREC excludes services using LPWA (low-power, wide-area) technology as it considers that the market is not yet mature enough to consider regulating roaming services based on this standard of connectivity.

Moreover, in its interpretation of Regulation (EU) No. 531/2012, BEREC distinguishes between different situations in which connected devices might need roaming services. In particular, BEREC distinguishes between periodic (occasional) and permanent roaming, and considers that EU regulations should not apply to connected devices as soon as they are roaming on a permanent basis. More generally, BEREC stresses the need for the EU institutions to regulate connected devices through a case-by-case approach in order to take into account the technical and commercial specifics of all existing scenarios.

What to keep in mind

At this stage, roaming services related to connected devices are covered by EU regulations applicable to international and Union-wide roaming if these services are based on 2G / 3G / 4G mobile technologies.

Conversely, there are arguments to support the view that these regulations are not currently applicable to services based on other less widespread connectivity technologies, such as LPWA. However, this conclusion could be overturned in the near future if the Commission were to decide that ex-ante tariff regulation is required for data communications terminations using emerging technological standards, in the light of new entrants' and the users' interests.

For further information, please contact Florence Guthfreund-Roland ([email protected]) or Mathilde Hallé ([email protected]).