Orange’s new roaming tariffs, launched at the Mobile Wold Congress in Barcelona today, are a good example of the type of new approach operators need to take to stimulate use of mobile services while abroad. They succeed in meeting the main requirement mobile users have when they travel abroad: will it cost an unjustifiably high amount to use my mobile services when I travel? Operators have yet to arrive at a conclusive approach to allow consumers to answer this question, but they are beginning to experiment with different approaches that should point the way to a solution.
Orange’s new tariff is innovative in that it offers roamers a bundle of mobile services for a set fee. For example, Orange France customers will be able to purchase a roaming bundle that includes 10 minutes of voice, 10 SMS’s and 10 MB for approximately €4-€5 on a daily basis when travelling in the EU. This will be available from June onwards.
While it remains to be seen how popular this bundled approach will be with customers, it is a step in the right direction for operators trying to stimulate roaming usage beyond the old price-per-minute/ SMS/ MB approach. Experimenting with different pricing structures will help operators see what works and what doesn’t, giving them much-needed insight into the link between price and use of mobile services while abroad. While pay-per-use tariffs work in-market, they haven’t succeeded in stimulating use of mobile services while abroad to levels comparable to home use, at least in the consumer market.
Meanwhile, Orange’s “Orange Travel App”, which was launched in France in June and will be expanded to other countries during the year, is an effective way for roamers to stay aware of how much they have used their mobile while travelling. Through awareness of mobile use roamers are likely to use mobile services more rather than less – as long as they know how much it is costing them. Other operators, especially the large multi-nationals can be expected to launch their own roaming apps as the year progresses.
The majority of pan-European operators are now innovating on roaming pricing to try and increase usage to offset regulatory-led wholesale and retail price cuts. The link between price decreases and increased roaming usage is difficult to quantify, not least because of the effect of the economic downturn on travel. But Orange’s bundled approach, combined with the Orange Travel App provide a solid foundation for Orange customers to use mobile services more often when they travel.
With Amazon and Google launching smart home initiatives, have the telcos missed out on their chance to cash in on this market?
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