As featured on TM Forum's the Insider blog
Time to finally address roaming costs
Industry commentator, Dean Bubley, recently Tweeted that: “Any mobile operator whose website makes it deliberately difficult to find data-roaming prices is untrustworthy and must be avoided.”
And BillingWorld reported that: “Fear of bill shock hinders operators' ability to deliver recurrent revenues from roaming — estimated to offer an additional value of up to $900 million globally if such concerns could be alleviated.”
Our industry has, since the beginning of GSM roaming, failed or possibly avoided coming to grips with one its best features – the ability for customers to make and receive calls anywhere. Bill shock is the least of the issues, the cost of roaming is simply too prohibitive for most people to take advantage of it.
It’s been one excuse after another. Firstly it was the cost establishing roaming agreements with numerous GSM operators around the globe. Then it was the cost of collecting and providing billing records to the roamers’ home networks. Next was the establishment of and fees to cover clearinghouse handling of the call records. Because of time delays between usage and delivery of call records to home networks fraud became a big issue and presumably had to be compensated for.
Even today, in the era of almost real-time CDR collection, prepaid roaming via Camel and a slew of management tools to help mobile operators reduce risk, consumers are still shunning voice and data roaming. Why?
Well, it’s probably mostly because of the cost. Regardless of what plan they may enjoy on their home network it is a common habit to charge roamers on the highest domestic tariff the roaming operator can get away with. Then the home network adds a little extra margin for the privilege of allowing one to roam. This was around the 35% mark for many years. Add to this the sheer uncertainty of what a voice call is costing or how much data is racking up then it is easy to see why.
Of course, those with corporate accounts probably couldn’t care less what bills they mount up - they’re not paying. If bosses want their ‘road warriors’ available 24x7 then they can pay for the privilege. But savvy corporate accounts people are now waking up to the cost burden and like business class airfares, mobile roaming is being reeled in.
Staff are being issued with Skype accounts and told to use hotel and office Wi-Fi to do their communicating. If it is really urgent then SMS someone at HQ. Many opt to buy local prepaid SIMs on arrival or use the services of providers that offer SIMs that access local VOIP POPs to make overseas call back home or back to base.
There is a whole alternate industry grown up around helping people avoid roaming charges. Despite efforts by some operators to form alliances or provide inter-company rates at more competitive rates, subscribers simply don’t trust them or can’t be bothered. Today’s society is so mobile one can only imagine what revenues are being squandered because of intransigence to make the effort on the part of mobile operators for change.
Regulators are now starting to take notice, too, and are attempting to force those with their heads in the sand to get real about roaming. The European Union has adopted strict bill-shock measures that penalize operators that fail to alert customers when they approach limits on data, voice, etc. Similar measures have been adopted in the US, but compliance is voluntary; however, most of the major operators are in line to meet deadlines for the guidelines this spring.
As if mobile operators do not have enough bad press over bill shock and overcharging claims. You’d think it was time to get serious about roaming and level the playing a field before there are no players left.
Just how much revenue is lost to CSPs may never be known, but you can be certain it is way, way more than the estimated $900 million being reported.