White Paper on the The Future of Mobile Roaming

In partnership with Value Partners
June 2014

Download the full version of this white paper: The Future of Mobile Roaming

Roaming has been a high margin business for mobile operators. However, the high rates have led many travellers to become silent roamers, leaving a large untapped market.

On the 3rd of April 2014, the members of the European Parliament voted in overwhelming majority to remove roaming fees completely in the European Union (EU ) by December 2015. The vote was a result of 5 years of regulatory price caps and changing attitudes towards the high cost of roaming. With the removal of the roaming rates altogether the mobile operators in Europe are predicted to lose 2% of their annual revenue, representing about €1.65bn ($2.29bn).

This news acts as a reminder that both regulatory developments and massive technology changes are creating a major impact on the roaming activity of consumers and roaming revenue of operators, and that real opportunities are available to increase revenue in this space.

Roaming fees have been a steady source of income for mobile operators. However, as a result of high roaming charge rates, many travellers are silent roamers (i.e. do not use their phone at all when abroad) and many others are very careful in how they use their service while travelling. As a result, operators have left a latent market untapped.

In 2013, it was estimated that 70% to 80% of all roamers (depending on the region) were silent mobile data roamers. This latent demand equates to a loss of 10,500 TB/year in mobile roaming data traffic in 2013, and represents a missed revenue opportunity of over $3.0 billion in inter-operator payments alone.

In addition, mobile subscribers who do use mobile data roaming, significantly curb their data usage when abroad, again due to the high price of data roaming packages. If all current roamers had a similar data usage pattern as they do when at home (with the introduction of all-you-can-eat data roaming plans for example), the current data roaming usage would increase 500 fold.

On the voice side, a similar situation is occurring. It is estimated that around 50% of roamers do not use mobile voice services while roaming, which equates to a loss of 16 billion potential international minutes and US$0.6 billion3 in termination rates revenue.

Consistently high roaming fees combined with the growth of smartphones and tablets, the rising dependence on social media and the ease of access to the internet is prompting mobile users to seek alternative services when roaming such as WiFi, local sim cards, as well as alternate roaming service providers.

These combined pressures on mobile operators’ international business and the advent of LTE, with the potential of exponential traffic growth that it could bring, are making it more urgent for mobile operators to change their business model and introduce new services and packages to take advantage of the upcoming explosion in data roaming traffic and services.

Download the full version of this white paper: The Future of Mobile Roaming

For more information on this white paper and consulting services relating to Mobile Roaming, please contact Isabelle Paradis at: paradis@hottelecom.com or +1 514 270 1636