Mobile Roaming. Aalto University Comnet. Slide 1
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1 Mobile Roaming Slide 1
2 Outline Roaming Big picture Regulation Financials GPRS roaming WLAN roaming Summary Slide 2
3 Fundamentals of Roaming Mobile network operator s position in the global ecosystem rests on solid basis: Exclusive right to a long-term (e.g. 20 years) national spectrum license Limited number of such operators per market (3-8 licensed operators) Membership to a solid global family (GSM Association) of such operators based on Globally standardized radio interface (device to network) Control of standardized SIM cards (Subscriber Identity Module, user identity) Globally standardized roaming contracts between family members The mobile industry structure, including roaming, is defined as part of the technical architecture standardization (3GPP) National regulators face difficulties in managing the mobile ecosystem due to the strong international linkages in interconnection, and especially in roaming Slide 3
4 Communications vs. Travel Communications and travel are complements, not substitutes! Macro level: travel induces communications, and vice versa Micro level: a videoconference can substitute a face-to-face meeting Social networks are the underlying force that seems to drive both communications and travel Internet enables richer social networks, which further promotes travel Communications reduces the social cost of travel by allowing to keep in contact Two global roaming systems exist SIM/communications credit card/purchases, both critical to travel Source: Lynne Hamill (2010) Slide 4
5 Importance of International Mobile Roaming Traditional customers: business Number of private customers increasing International roaming market growing steadily Total arrivals in 2015: million (cmp. 2000: 686 million) Slide 5
6 Roaming Regulation in EU Retail prices of roaming much higher than domestic prices Roaming can generate ~10-20% of operators revenues but only 1-2% of costs Price difference cannot be explained by difference in cost EU is adding pressure on roaming prices wholesale/retail price caps enforced since 2007 for voice calls and SMS price cap for data roaming since 2009 wholesale price cap from 1 /MB down to 0.05 /MB by 2014 retail price cap to 0.20 /MB by 2014 promotion of competition in 2014 subscriber: right to choose different operator for roaming operator: right to use other operators' networks at regulated wholesale prices National regulators have difficulty in guiding international roaming prices because constraints come from abroad Internet-based access-only approaches, e.g. WiFi, may increase competition and push roaming prices down Slide 6
7 Roaming Revenue Forecast The global roaming revenue estimated to be $67B, or 6.3% of mobile operators total revenue by 2015 (Informa, 2011) Slide 7
8 GPRS Roaming Technical Architecture (GRX) - Bilateral Slide 8
9 GPRS Roaming Technical Architecture Single GRX Slide 9
10 GPRS Roaming Technical Architecture Multiple GRXs Slide 10
11 GRX Roaming Business Interfaces between Players IOT Volume Clearing House (optional) Home Network GRX Operator 1 GRX Operator 2 Visited Network Monthly and volume charges Free exchange Roaming charges Volume Monthly and volume charges Bilateral roaming agreements between GPRS operators Settlement of inter-operator tariffs (IOT) via clearing houses Transport agreements via GPRS Roaming exchange (GRX) operators Source: Pohjola et al. (2004) Slide 11
12 IPX (IP exchange) GRX evolution to support QoS charging for e.g. IMS IPX is all-ip which enables interoperability with non-3gpp systems Still based on a private IP backbone (overlay for QoS) Operators face choices, especially with voice-over-lte (VoLTE) expensive QoS vs. low cost best effort competition against Internet vs. Internet compliance Slide 12
13 GRX/IPX Roaming Business model scenarios: Bilateral, Clustered, Centralized Triggers\Models Bilateral Clustered Centralized Number of contracts High Medium Low Complexity of one contract High High Low? Management structure Distributed Centralized Centralized Vertical bundling Yes Yes No? Control of standards spec GSM MoU Operator Non-commercial Competition in roaming No Yes No Price regulations No No Yes? Cost per operator High Medium Low Profit opportunity Medium High Low Bilateral model has dominated so far Clustered model develops together with international mobile operators Centralized model may emerge from regulatory needs Source: Pohjola et al. (2004) Slide 13
14 WLAN Roaming System Architecture using RADIUS (for AAA) Internet CLEARING HOUSE (RADIUS) ISP DB operator.fi (RADIUS) enterprise.net (RADIUS) Access Controller User DB User DB Authentication based on RADIUS protocol (or DIAMETER ) WLAN charging and settlement handled by Clearing House Note: visited network routing ( optimal routing ) Is there enough inter-operator trust? Example Eduroam Slide 14
15 Cellular vs. WiFi Roaming Cellular WiFi Architecture GRX Internet Authentication SIM card/hss RADIUS Payments SIM card Credit card Routing Home routing Visited routing End-to-end QoS GRX QoS Best effort Slide 15
16 Roaming Agreements Case: TeliaSonera GRX in 2011 TeliaSonera s international roaming coverage GPRS connectivity to over 400 mobile operators GRX peering with 18 other GRXs 2 billion potential inbound roaming subscribers Based on own IP backbone WLAN hotspots mainly in Nordic countries TeliaSonera GRX service has connected e.g. all Finnish mobile operators to foreign mobile operators Roaming prices followed roughly the EU price caps Slide 16
17 Summary Increasing travel and competition drives the need for simpler roaming Cellular roaming = home network routing + inter-operator trust WLAN roaming = visited network routing + local bundling Mobile operators facing roaming risks Regulators increasing the pressure on the roaming oligopoly/profits Banks/credit card companies eager to replace SIM/HLR Mobile handset vendors rolling out multi-sim and embedded SIM Internet service providers trying to become virtual mobile operators Slide 17
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