Overcoming the EU mobile roaming charge ban

Miri Duenias, Senior Director and Head of Marketing Analytics for cVidya, explains how mobile operators should leverage Big Data to create new services and revenue streams.

A new storm is set to sweep across Europe – or at least across the twenty-eight member states of the European Union. The first flurries arrived in 2007 when the EU Parliament legislated for retail price caps on mobile roaming services. Since then, price caps have been reduced yearly and, come early 2017, premium mobile roaming rates for calls, texts and data are to be abolished across the EU. Regulators are still ironing out the details and speculation is rife as to the implementation and possible repercussions of the plan. However, what is clear is that while this is a triumph for the consumer, it will entail significant challenges for the large European mobile operators who stand to lose considerable amounts in revenue once the new regulation is introduced. These titans are set to do battle on a stage of epic proportions – the €4.8 billion European mobile market. The victors and vanquished are yet to be decided. However, what is patently clear is just what is required to gain the field.

The Stage is Set

With the expiration of premium roaming charges – until now a significant source of revenue – the major operators will take an unavoidable hit to their incomes. Although carriers may recoup some losses through gaining additional roamers, this will be not come close to fully compensating for the projected lost roaming revenue. Additionally, the new regulation is opening up the market to alternative roaming providers. Now, for the first time, customers will be approached (and poached) by other service operators while abroad, resulting in greater competition that will force prices down even further. This is at a time when over-the-top content providers (OTTs) are already providing more and more services and becoming an increasingly viable alternative to operators’ roaming services as well as their domestic ones. Combined, this will put further strain on carriers’ profit margins. If they are to remain viable in the new era of competition and price cuts, they will need to expand their offerings to improve customer experience and create new revenue streams.

Operators are well aware of the situation and all players – great and small – are already trying to work out the best strategies. Examples include different variations of the ‘Roam Like Home’ offering launched across Europe that provides roaming customers regular access to data, calls and texts as if they were at home. This matches a change in the roaming paradigm implemented by carriers across the US. However, this is by no means a long term solution and there is already speculation that Roam Like Home is on the way out.
Miri Duenias
The Road to Victory

The key to success will lie in service differentiation. The old ‘one size fits all’ solution of yesteryear will no longer be sufficient in gaining new customers or retaining existing ones. Facing intense competition, operators must now explore ways to differentiate their roaming services, providing a clear and distinctive customer-centric service. But the question remains: how can carriers best structure and implement the various propositions to remain ahead of the opposition?

While the threat from alternative roaming providers is a valid concern, home operators still have an advantage due to their ongoing relationship with their customers and their knowledge on their profiles and needs. They should leverage this to create differentiation. However, operators must also start thinking about what services they can offer to in-bound roamers – those coming from abroad – that are not part of the traditional service. Approaching this new incoming demographic with suitably differentiated offers can generate new revenue. There will be new opportunities for gaining additional revenue from new segments. As well as attracting incoming roamers, a more immediate focus should be ‘waking up’ silent roamers and ‘getting them on board’ as early as possible with new propositions tailored to their needs. Additionally, providers can exploit the opportunity to target non-EU roamers, while creating greater differentiation in their offerings to EU roamers. However, this can also only be fully optimized through an enhanced understanding of customers’ roaming behavior, achieved through big data analytics

The key to targeting and attracting the interest of roamers is understanding their needs and addressing them; and this can be achieved only through big data analytics. Big data Analytics can provide operators with unique insight into customers’ usage both at home and while roaming abroad. It can also allow carriers to identify key patterns in users’ behavior, such as how long they typically travel for; those who regularly visit the same destinations; and distinguishing between business and leisure, solo and group travelers. A detailed understanding of individual consumers’ interests and specific usage behavior, as well as the ability to identify different groups and behaviors will enable operators to attract customers with tailored offerings, such as roaming family plans, application specific plans (social for leisure travelers and business applications [such as Salesforce.com] for the business travelers). This also opens up a great opportunity for operators to establish strategic partnerships with different OTTs and content providers to develop these new innovative application/content based offers that can support both local as well as roaming usage, a strategy which is being slowly adopted by selected carriers worldwide, such as the 3HK WhatsApp Roaming Pack.

To the Victor, the Spoils

As well as inherent challenges, the new legislation will also provide significant opportunities to mobile operators to recoup and even increase revenues. However, they will be unable to build and structure the best propositions, for both existing and potential customers, without first developing a detailed understanding of individual customers’ behavior and needs. Big data analytics will allow operators to do this. Operators need to start the process now if they wish toget ahead of the game and remain competitive. Carriers are well aware of the necessity to provide a more personalized experience, offering customers services more tailored to their needs and at the best value. In the battle that will inevitably ensue, come 2017, the victors will be the first ones to implement suitable analytics solutions. To be second is to be the first of the ones who lose.

Miri Duenias

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