Bogere Joseph Alfred1, Dr Julianne Sansa-Otim2 and Ronald ...

Part 2: The Feasibility of National Roaming in Highly Competitive Mobile Markets: A Case Study of Uganda 65
biggest issue about National Roaming is not its technical implementations but rather
the economical aspect associated with it.
Economical Feasibility of National Roaming
Based on our one to one talk with some of the employees of both networks “A” and
“B”, their line of argument is economical. National Roaming is most likely to meet
strong resistance from the operators. An operator will not want subscribers from a
competitor network to use his network after putting in so much investment.
Furthermore National Roaming involves site sharing, but this entails a high degree
of common costs between operators. The substantial common costs limit the scope for
price competition on retail markets and this leads to co-ordinate effects. Also, the extent
of site sharing is very limited to masts, antennae, power supplies, etc., but the most
sensitive parts of the sites (Intelligent elements which determine the nature and range
of services) constitute the majority of the costs which are only shared in exceptional
circumstances. Hence, the level of common costs which in turn infl uence decisions on
prices and output is likely to be low [Petit 2004].
Monopolistic behaviours among well established providers: |New entrants into
telecoms markets often complain of anti-competitive or unfair monopolistic behaviours
adopted by dominant incumbent players who would have established wide network
coverage before the entry of the new players. Hence, these monopolistic players can
create barriers to entry by showing unwillingness to share infrastructure. A typical
example is network ”B” that enjoys a competitive advantage of having the largest GSM
coverage in the country. In this case, roaming with other operators may deprive it of
that advantage. So they will have to have a second thought before they fi nally sign the
roaming agreement.
Roaming between operators may result in higher tariffs due to agreements between
operators. This is specifi cally an issue when it comes to bundled subscriptions e.g. where
a number of free SMSs or a specifi ed amount of downloaded data is included in the
subscription. In such a situation, the tariffs are reverted down to basic pricing models
such as price per SMS or per Kbyte of data generated. But many operators have become
multinational operators providing the same tariffs “Whenever you are” as a means of
competition [Winberg 2007].
Roaming rates regulation hinders investment in network deployment and reduces
incentives for smaller carriers to expand the geographic coverage of their network.
If the competitive advantage of building out nationwide or large regional networks
is reduced, larger carriers’ incentives to expand, upgrade or maintain their existing
networks diminishes [Pines 2010].
Recommendations
The main objective of the study was basically to investigate the feasibility of National
Roaming taking into account the current telecomunication market structure (with stiff
competition among the existing mobile operators) in Uganda. We have seen from our