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January 2016

Roaming Strategy in the Bill Shock Age: Fresh Ideas to Win the Trust of Silent Roamers

Roaming Strategy in the Bill Shock Age: Fresh Ideas to Win the Trust of Silent Roamers

When Mark Twain’s cousin got seriously ill, rumors spread that Mark Twain himself — 62 years old at the time — would soon pass away.  At which point, Twain famously said, “Reports on my death are greatly exaggerated.”

Well, the same can be said about the roaming business.  Just because WiFi is growing and roaming fees are being capped in Europe doesn’t mean smart operators can’t figure out ways to turn roaming into a big winner.

To savvy marketers, the flipside of a problem is always an opportunity.

So this is the optimistic and research-informed view of Jason Bryan, CEO of the Roaming Consulting Company (ROCCO) whose firm has become an authority on roaming and other mobile services issues of the day.

In my discussion with Jason, he talks about many things: his research methods, the status of LTE roaming, the impact of EU regulations, and several strategies and key questions that people in the roaming business need to think about.

Dan Baker, Editor, Black Swan: Jason, to begin, please tell us a little about ROCCO Consulting.  What’s your business model?

Jason Bryan: Dan, most of our business is actually research.  We explore what’s going on at mobile operators.  It’s subjects like SMS messaging, SIM box detection, and of course roaming.

As researchers, we are independent and bold.  We do not have sponsors: we choose the topics ourselves and present the data in an honest format.  We don’t let a sponsor lead us in a certain direction or tell us what our output should look like.

What we do is ask operators to tell us what they think — and about 500 operators work with us each year.  For instance, we say, “Can you tell us ( based on some Key Performance Indicators) how you value your suppliers?”

And in return, the companies who take part in our research get a free copy of our report’s Executive Summary.

I’m curious.  How did you get into this operator and vendor research business?

Well, fortunately, I was once the chair of the GSMA’s Roaming Innovation Group which was made up of a group of more than 100 operators and vendors.  About 40 people would attend each meeting.  And they came from all over the world and brought us all kinds of issues.

So this was a great opportunity for me to personally get to know many people in the operator community.

And one of the issues was that many operators were not supporting the standards as well as others would like.  So we created a compliance program so operators could share their view of how roaming compliant other operators were.

That was the first time that data evaluating operators was available.  And the success of that program let to the question: why can’t we do this for vendors too?

So as soon I started ROCCO, back in October 2012, I said, let’s see if we can develop a similar relationship with operators.  And the key was to give something back to our contributors regardless of whether they were going to buy something from us or not.

So we have developed a trusting relationship with hundreds of operators now.  So this is the best venue to ask operator what challenges they face.  Then we use our research to help steer companies in a more profitable way.

OK, let’s get into some of the issues.  Many operators are rolling out roaming for LTE these days.  How’s the transition going?

LTE is clearly going to become a very common network in the next few years.

And in roaming, operators need to re-engage with all their roaming partners to set up new LTE roaming relationships.

However, LTE brings many challenges.  It was meant to be the technology that would solve convergence problems.  It merged GSM and CDMA technologies so we could have one global standard and reap the benefits of unified devices and universal roaming standards.

But that’s not what happened.  Instead, LTE was developed in non-standard ways.  LTE brought us spectrum segmentation, meaning the type of LTE used in one country can be different from the next.  And that meant device manufacturers are challenged to get more technology inside the device to allow the device to roam at the levels we did before.

So lots of convergence issues need to be solved around LTE.

But LTE brings us new services.  For instance, for the first time, we can download and upload in ways not possible before, so that’s very cool — and moves mobile forward.

Certainly “bill shock” and “silent roaming” are other big issues.  For fear of bill shock, many travelers turn off mobile roaming when they visit another country and they search for a WiFi hotspot instead.  What’s your take on this?

We recently we did a research study of roaming bill shock.  And we had 114 operators take part in this.  And that gave us some nice international insight.

The consensus among many operators, we found, is that since LTE pushes the data bandwidth envelope, bill shock might become more of a concern with LTE.  It’s interesting.

Now the silent roamer issue is very big.  In fact, among the operators we surveyed the most commonly cited figure for percent of subscribers who roam silent was 85% to 90%.  That’s a lot.  Now the numbers varies quite a bit from continent to continent, but that was the most common answer overall.

But at ROCCO we’re actually feeling positive about all the new bill shock regulation, because we feel it’s a chance for operators to strike up a newer and better relationship with the subscriber.

Now in some ways we have a natural advantage because mobile roaming is not tied to a particular WiFi hotspot.  So if the roaming service is cheap, transparent, and delivers good quality, that becomes an exciting opportunity.  Upselling and new services can bring GSM network subscribers back to roaming.

It all depends on how skillfully operators work with users and develop that business using a new and improved relationship.

What specific steps can operators take to win back silent roamers.

Within the United States, it’s less of a concern and there’s enough self-regulation that roaming services are doing well there.

But in Europe, I think, new pay-for-roaming services are necessary and have a very good opportunity to grow.

For instance, a recent report by BEREC predicts that operators will support the regulated Euro roaming rates, but also their own lower tariff where it makes sense.

So there have already attempts to win back the silent roamers — and try to differentiate themselves in the market.  Of course, some operators (such as Vodafone Group, 3 Group) are following the regulation already.  There’s also an operator in France called Free Mobile House who offers a great plan that includes domestic rates for roaming for a certain period of time.

So lots of activity out there.  Operators are testing what strategies work best.  And vendors, too, are providing new roaming solutions, and this is the topic of our next study — silent roaming solutions and which ones are proving effective.

Regulatory changes are another big issue.  The European Union has put strong regulations in place in 2017 calling for roaming between EU states to be billed at domestic rates.  What’s the impact of that going to be?

Dan, the EU’s policies are widely misunderstood.  In fact the press has been predicting the “end of roaming charges”.  Well, that’s actually not the case.  There will still be surcharges and fair use policies applied to roaming, so that’s going to surprise lots of people since the press has failed to spotlight on the details.

A phased roaming policy will be put in place.  A user will only be allowed to get roaming at domestic rates for maybe 30 days — something close to that.  Most people, then, will enjoy a nice price break.  But for company people and frequent travelers, it will be higher than the domestic rate.

What we have to avoid in Europe is a permanent roaming scenario.  For instance, if one operator offers unlimited roaming, then why shouldn’t all subscribers from all different countries take a SIM from that operator and use it in their own country?

Well, you can imagine the turmoil that would cause.  It would put big pressure on domestic operators to support their businesses because much fewer people would be buying their SIMs.

And a permanent roaming scenario is not only financially dangerous, each member state has its own tax system and so you add greater complication there too.

To my mind, regulators need to investigate the true costs operators incur when their users roam.

If you had to score these EU regulators on their roaming policies, what grade would you give them?

I would grade them “Excellent” on good intentions — everybody would like to see more transparent and predictable pricing in roaming.  But on understanding the operator’s side of the picture, I would have to grade them poorly.

Regulators need to better appreciate the difficulties an operator goes through when they send their users to another network.

Roaming is an expensive business.  There are billing concerns to deal with.  And you’re not always sure of your roaming partner’s coverage — your customers may or may not tell you what their coverage was like.

You also want the right price and good quality.  So all this requires gathering lots of intelligence.  There are also major fraud concerns.  Today there are twenty known fraud types that can happen in the roaming scenario.

I feel sympathy for the operators because this is not understood.  And yet in the EU they are expected to give the service away for the same price as domestic.

I also question whether roaming cost controls are even effective.  If you abolish roaming charges, how are operators to recover their costs?  Well, the simple answer is they will raise their domestic prices.  What other options do operators have if they want to stay financially sound?

Jason, it’s the beginning of the new year.  Any New Year’s Recommendations for the operator community around roaming?

Sure, Dan.  Here’s a short list of ROCCO recommendations for the new year and maybe several years on the horizon:

  • Keep your Eye on Next Generation WiFi — The next generation WiFi hotspot is now under development.  It presents a real competitive threat because it will have many features similar to GSM, a key one being security.  Users are going to feel much more comfortable on this new WiFi, so operators must plan how they will respond.
  • Focus on the Human Side of the Customer Relationship — Lots of people say that roaming is dead because machine-to-machine roaming will take that away.  Well, that’s simply not true.  There’s plenty of revenue to be made in roaming.  But in today’s world, it’s necessary to forge a better relationship with the customer — they need to trust you as a good provider.
  • Watch Out for the Handset Manufacturers because some of them will have enhanced SIMs when it comes to roaming.  And the operator could be left out of the relationship with the customer.  What I’m talking about is a manufacturer’s SIM being embedded in the device.  This could become far more common.  So where do operators sit in that situation?  Well, they need to be aware of those manufacturers and work out a better relationship with them.
  • Study the New Internet of Things Landscape — Growth in IoT is a given and there will be scenarios where a device that’s been made in one country permanently roams to another country.  So operators need to face that reality, look at the functionality of their networks, and figure out how to support millions of more devices than they’ve had before.
  • Start Planning Early for 5G — Verizon has already started working on 5G.  In 2018, KT Korea will launch something.  DoCoMo will launch 5G service in Japan in 2020.  Commercially then, 5G is only five years away.  So what’s it going to look like?  Well, operators need to spend some time planning and strategically thinking about the impact it’s going to have on their business.

So at ROCCO we are thinking about all these things right now because we know there’s great need for operators to do strategic planning.  And that need will come sooner than operators think, so it’s something to look at right now.

This is super, Jason.  Thank you for these fine insights.  It was a pleasure hearing them.

I enjoyed our conversation as well, Dan.

To sum it up, roaming revenues are threatened, so operators must change the way they offer roaming to adapt to the new environment.

Fundamental to what we believe here at ROCCO is that operators must embrace the concept of “true roaming”.

And by true roaming, I mean the ability of the user to be as productive when he or she travels as they are at home.  There shouldn’t be a limit on coverage or services.  And usage prices should be similar to what the user has in his home network.

There’s no denying that the free Wi-Fi in most hotels these days is a major challenge.  Why should you use roaming services on GSM at a higher cost?

So the mission of the operator is to ensure the user remains productive.  And solid strategies for boosting roaming are out there, but to discover those strategies requires much more thought and analysis.

How is social media changing things?  What will be the impact of our greater attachment to the cloud and IoT?  These are important questions, and at ROCCO our mission is to help operators find answers.

Copyright 2016 Telexchange Journal

 

About the Expert

Jason Bryan

Jason Bryan

Jason Bryan is CEO of ROCCO, a Roaming and Interconnect Research and Consulting Company based in the UK serving Operator and Vendor clients globally.  Jason has been working in International Roaming and Interconnect for 20 years for companies such as Vodafone Group, Telefonica Group and was the Chair of the GSMA Roaming Innovation Group.

Jason has presented in all kinds of Industry events including TED, Total Telecoms, GSMA and is often asked by Vendors to present ROCCO’s Roaming and Interconnect Research and Strategic Reporting at their customer events.   Contact Jason via

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