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Guide for NRAs on International Mobile Roaming Cost analysis – Technical Paper

Table 2 – Business process with activities and the elements for the activity

Business process Activities Elements involved
Handling set up Receive request from visitor to register and be Radio area network (RAN) and backhaul network
of a new visiting activated. to data centres.
subscriber
Check international mobile subscriber identifier RAN, mobile numbers database, interconnect,
(IMSI) and inform home location register (HLR) transferred account procedure (TAP) file update,
network and verify allowed to roam. all in data centre.
Check if prepaid or postpaid.
Check if prepaid has roaming capacity.
If above all verified, register visitor on visited VLR, over-the-air (OTA) activation, billing file,
network, in visiting location register (VLR), and customer care DB.
activate; update customer care and billing
databases (DBs).

2.2.3 Incremental cost modelling

A further principle, as we are focused on the differences in costs due to roaming over domestic tariffs, is
to understand the incremental cost for each part of the business process due to the fact that it is
employed for roaming. There are various forms that such incremental costs can take. Incremental cost
due to roaming (for equipment for instance) is either an extension of capacity, or of functionality, or
spend on specialized quite new equipment by function. Long term, such costs may be absorbed in some
way. However, this is a moving target as more extensions of features become absorbed into the standard
processes and support platforms over the long term. Various types of increments in costs are shown in
Table 3 for the MNO operations related to roaming with their long term trends:

Table 3 – Types of cost increment in MNO assets for roaming

Categories of possible cost increments (opex and Long-term cost trend
capex) for roaming over domestic costs
Increased capacity for international roaming for May become considered part of customary business growth –
existing assets. i.e. normal business expansion cost.
More expensive systems for international calls (e.g. Prices reduce rapidly, even in medium term, as become
CAMEL for prepaid roaming subscribers). mainstream, i.e. just a dormant software feature to be
optionally activated, rather than an extra module to be licensed.
Specialized and different operational processes (e.g. Prices reduce with time as the specialized operations become
customer care) and call handling with specific mainstream with roaming traffic growth.
equipment.

The roaming cost increment can be measured as an additional percentage of domestic-cost only costs
for the model's results.

2.2.4 Long-term trends in roaming costs

Note that the long-term trend is that the incremental costs of a roaming call or session will move
towards zero as equipment, software and processes for roaming activities become part of normal
business practice, as for domestic calls. Additional effects such as expansion of the volume of calls, both
domestic and roaming, if lowered pricing stimulates the market, will also tend to drive down incremental
costs of roaming over domestic costs. Attractive roaming tariffs may also act to stimulate domestic
business, as customers are drawn to the lower roaming tariffs when travelling

Moreover, technology will also begin to become a factor in the reduction of roaming costs as 2G global
system for mobile communications (GSM) and 3G universal mobile telecommunications system (UMTS)
are gradually upgraded. A move to an all IP world, as planned for LTE, would herald the entry of a new

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