Roaming bundles putting operator revenues at risk – report

A study undertaken by roaming specialist Syniverse, in partnership with the Strategic Economic Engineering Corp (SEEC) has shed some light on the extent to which consumers are willing to churn when considering roaming fees. The study, which polled 2,000 mobile consumers across the US, UK and Germany, revealed that 47% of consumers feel current roaming services are too expensive.

The survey reported that “roam like home” tariffs, such as those operated by Three in the UK, are seeing operators lose out on up to $16 billion in the US, UK and German markets. 42% of consumers surveyed said they would switch providers for a 50% discount on roaming tariffs, while an additional 18% would leave a provider for free or all-inclusive roaming services.

Fees levied against roaming customers has been a contentious issue in recent years, with operators coming under pressure from both the media and regulatory bodies to lower fees and increase billing transparency, so that previously well-publicised cases of bill shock become a distant memory.

According to Juniper Research, the global roaming market could grow by up to $30 billion in the next three years, but the extent to which consumers are willing to churn for better value roaming services means that a more intelligent approach to pricing of international calling, texting and data packages will probably be required.

Juniper estimates the global roaming market to be valued at approximately $57 billion, roughly 4% of global mobile revenues, and could potentially rise to $90 billion by 2018.

Mary Clark, CMO of Syniverse, reckons the stiff competition being posed by disruptive operators offering more enticing consumer roaming packages is compelling major mobile incumbents into reconsidering retail packages.

“The pace of change in today’s mobile ecosystem sometimes makes it difficult to keep focus on core business areas like roaming that still carry tens of billions of dollars in revenue opportunity,” she said. “It’s critical for operators to take action to protect and drive revenue in the face of fierce battles for subscribers.

Sam Brown, founder and CEO of SEEC, believes there’s more opportunity in the roaming market than may be evident in the current climate of roaming data price drops.

“Our analysis shows the competitive importance of roaming pricing, and as a result, we’re advocating measures for mobile operators to focus resources on their long-term roaming strategies and deliver the proactive offers and experiences their end-users increasingly expect”, he said. “While there is a competitive threat, it’s not all risk and downside. There are billions of dollars up for grabs for mobile operators that can find the right intelligent roaming solutions to unlock end-user demand – a simple evolution of current practices.”