This document summarizes a presentation on how over-the-top (OTT) services can increase competition in the mobile market. It discusses characteristics of today's mobile markets, the EU preliminary deal to lower roaming prices, and how OTT players providing mobile VoIP and SMS could enhance competition. It argues that access to mobile numbers is key for OTT providers to effectively compete with mobile network operators (MNOs), and that restricting access only to MNOs violates EU framework principles of non-discrimination, equal treatment, and promoting competition.

1. How over-the-top services can
increase competition in the mobile
market
Telecom Regulations Forum London 19 April 2012
This document is copyright © 2010 VOXBONE. All rights All rights reserved
This document is copyright © 2012 VOXBONE. reserved.

2. Agenda
• Characteristics of today’s mobile market
• The EU preliminary deal
• OTT players can play a key role to enhance
competition in mobile
• Mobile VoIP
• SMS
• Access to mobile numbers: the EU legal framework
• Conclusion
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3. Characteristics of today’s mobile market
• High barriers to entry
• National markets
• Oligopolistic market structure
• Scarce resources (spectrum, numbering)
• High service rates for transnational services
• Fostering development of MVNO: relative
success
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4. EU Preliminary deal
• Roaming competition:
• From 1/7/12: MVNOs and resellers will gain wholesale
access at regulated prices to offer roaming services
• From 1/7/14 the consumer may shop around for the best
roaming deal
• Data roaming:
• From 1/7/14 MNOs in visited countries may offer data
roaming services on their own networks to travellers
• Consumer can select network before or while roaming
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5. EU preliminary deal
• Until then…cheaper roaming:
• Through lowering retail price caps on
voice and SMS
• Glide path
• Until 30 June 2017
• Bill shock:
• better information when travelling
outside the EU
• Extension of alert system currently
in place
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6. EU preliminary deal
SMS
(per
SMS)
0,12
0,1
0,08
Price
(EUR)
0,06
At
the
retail
level
0,04
At
the
wholesale
level
0,02
0
Current
1st
July
2012
1st
July
2013
1st
July
2014
Year
6
© 2012 VOXBONE

7. EU preliminary deal
Voice
(per
minute)
0,4
0,35
0,3
0,25
Price
(EUR)
Voice-­‐calls
made
at
the
retail
level
0,2
Voice-­‐calls
received
at
the
retail
level
0,15
Voice
at
the
wholesale
level
0,1
0,05
0
Current
1st
July
2012
1st
July
2013
1st
July
2014
Year
© 2012 VOXBONE

8. Role of OTT players
• Increased penetration of
mobile data connectivity
• Competition by innovative
OTT mobile service
providers can be key
instrument to increase
competition
• Both in mobile VoIP and
SMS
• Need for access to mobile
numbering resources
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9. Mobile VoIP
• Mobile access offers a better fit for OTT VoIP
services than fixed lines:
• Embedded device intelligence
• Integration with other appliances
• Smartphones give users significant computing
power
• Mobile devices meet users needs for ever more
‘power in the pocket’
• Smart phones causing behavioural changes
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10. Growth of VoIP driven by mobile VoIP
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11. SMS still king
• Value of worldwide mobile messaging market
in 2011 = 202 billion USD
• Although challenged by OTT services, SMS still
king in the mobile messaging market:
• Yielded the highest revenues for operators in 2011:
63% of revenues
• Forecast to dominate over the next 5 years to
2016
(Source: Portfolio Research, report 2012)
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12. Mobile marketing
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13. Today’s solutions have limitations though
• Fixed numbers
• Often do not support routing of SMS
• Limited % of fixed telephone devices capable of receiving
SMS
• Short numbers
• Network dependent
• Limited to non existing access from international
• Too expensive for the user
• Limited amount of resources
• Voice not always supported
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14. Why E.164 mobile numbers
• Scarcity not an issue
• Inter-network (not network
dependent)
• portable
• Access from abroad
• Texting to these numbers is cheap
BUT
some NRAs require mobile
spectrum
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15. The EU legal framework (1)
Article 10 of the Framework Directive provides
the following :
1. Member States shall ensure that adequate numbers and numbering
ranges are provided for all publicly available electronic communications
services. National regulatory authorities shall establish objective,
transparent and non-discriminatory procedures for granting rights of use
for national numbering resources.
2. National regulatory authorities shall ensure that national numbering
plans and procedures are applied in a manner that gives equal treatment to
all providers of publicly available electronic communications services.
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16. The EU legal framework (2)
Article 5(2) of the Authorization Directive
provides that :
(…) the rights of use for radio frequencies and
numbers shall be granted through open,
objective, transparent, non-discriminatory and
proportionate procedures.
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17. The EU legal framework (3)
Article 6(1) of the Authorization Directive
provides that :
(…) rights of use for numbers may be subject
only to the conditions listed in the Annex. Such
conditions shall be non-discriminatory,
proportionate and transparent (…)
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18. The EU legal framework (4)
The relevant conditions listed in section C of
the Annex are the following :
1.Designation of service for which the number shall be used, including any
requirements linked to the provision of that service and, for the avoidance
of doubt, tariff principles and maximum prices that can apply in the specific
number range for the purposes of ensuring consumer protection in
accordance with Article 8(4)(b) of Directive 2002/21/EC (Framework
Directive).’.
2. Effective and efficient use of numbers in conformity with Directive
2002/21/EC (Framework Directive).
3. Number portability requirements in conformity with Directive 2002/22/
EC (Universal Service Directive)….
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19. The EU legal framework (5)
The general objectives of the Regulatory Framework, as
expressed in article 8 of the Framework Directive. National
regulatory authorities should promote competition in the
provision of electronic communications networks and services
by inter alia :
« (a) ensuring that users, including disabled users, derive maximum benefit
in terms of choice, price, and quality;
(b) ensuring that there is no distortion or restriction of competition in the
electronic communications sector;
(c) encouraging efficient investment in infrastructure, and promoting
innovation; and
(d) encouraging efficient use and ensuring the effective management of
radio frequencies and numbering resources.
© 2012 VOXBONE

20. The EU legal framework (6)
The national regulatory authorities must also contribute to the
development of the internal market by inter alia:
(a) removing remaining obstacles to the provision of electronic
communications networks, associated facilities and services
and electronic communications services at European level;
(b) encouraging the establishment and development of trans-
European networks and the interoperability of pan European
services; and end-to-end connectivity,
(c) ensuring that, in similar circumstances, there is no
discrimination in the treatment of undertakings providing
electronic communications networks and services; »
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21. The EU legal framework (7)
The procedure for granting rights of use to
numbers must be:
• open,
• objective and
• non-discriminatory
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22. The EU legal framework (8)
The conditions for grant must:
• Ensure that adequate numbering ranges are
available for all ECS
• Ensure equal treatment
• Non-discriminatory, transparent
• Promote competition, innovation, consumer choice
and development and interoperability of pan-
European services
• Only relate to one of the requirements listed in
Section C Annex AD
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23. Restricting access to mobile numbers for
MNOs only is inconsistent with the EU rules
• Unjustified discrimination between providers of
mobile services depending on technical configuration
(mobile network vs OTT)
• Principle of technological neutrality
• Imposes a conditions which is not listed in Section C
Annex AD
• Impedes the offer of innovative services, reduces
consumer choice and development of pan-European
services
© 2012 VOXBONE

24. Conclusion
• Innovative mobile service providers can be
instrumental in enhancing competition in
mobile market
• Access to mobile numbering ranges is key to
offer full PSTN connectivity (and thus to
effectively compete with MNOs)
• NRAs are invited to allow OTT service
providers to access mobile numbers
• Restricting access to MNOs only is a violation
of the EU legal framework
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25. Thank you. Questions?
Inbound geographical and toll free phone numbers
from over 50 countries and 4000 cities
25
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26. Contact Info
Erik De Herdt
General Counsel
erik@voxbone.com
T: +32 473 83 90 91
© 2012 VOXBONE