The Pressures of Roaming Free

By Timo Ahomäki

At this time of year, operators and consumers alike quickly turn their attention to roaming costs, and offering or receiving the best deals when travelling abroad. For years, the media’s advice on reducing the cost of roaming has consisted of steps such as switching your phone off when not needed to avoid unnecessary charges from receiving calls and SMS, or using hotel Wi-Fi to call home or receive Facebook updates.

But with many new roaming initiatives and legislation currently coming into play, how can operators be savvier in ensuring the best package for their customers?

Earlier this month the EU implemented its new legislation aimed at lowering roaming costs – meaning now that 1MB data usage will cost no more than 70 cents, calls will cost a maximum of 29 cents per minute to make and 8 cents per minute to receive, while SMS messages will cost 9 cents each to send. In response, various operators such as Vodafone and 3UK in Europe are offering an "all you can eat" package for pay-monthly customers that allows them to use their existing domestic price plan for voice, text and mobile Internet abroad for a very small cost per day (approx. $4.50). Alternatively, pay-as-you go customers can purchase add-on credits that buy them a set amount of data, SMS or call time.

Elsewhere, we saw more than 20 global operators at the GSMA’s Mobile Asia Expo last month back a plan to protect subscribers from accidentally running up high mobile data bills when abroad, eliminating bill shock through more transparent charges. Across the sea, the Indian government recently cleared Telecom Policy 2012 aimed at eventually scrapping domestic roaming charges. Though much further down the line, all of these moves highlight the same message – that roaming is not the goldmine it used to be.

So is this abolishment of an “old school" revenue model the beginning of an end or is it possibly just a new beginning? Instead of steadfastly holding on to a business model from the past, operators must now look at ways in making holiday travel work to their advantage. This is where really knowing your customer counts. For example, if you know that a customer’s main used app when at home is Facebook, then why not allow free access when subscribing to the roaming data pack? Whilst this type of offering may well lose a few dollars here, the chances are that these losses will be more than amply repaid by keeping the customer happy with continued connectivity whilst abroad.

In roaming, as in many other areas of the telecom revenue Web, it is maybe time to look into new and innovative solutions instead of trying to plug revenue losses with stopgap approaches, only to find the customers smart enough to find their way around these.

Timo Ahomaki is vice president, product management at Tecnotree Corporation.