oint of view by Ceri Tinine, expert in the MVNO industry
Analysts predict that roaming traffic will nearly double over the upcoming 5 years. 10 to 15% of the operators active on the European market are MVNO’s who have taken little advantage of the roaming opportunity so far. Given the mature telecom market, the high number of failures amongst MVNO’s and the increasing roaming revenues, Ceri Tinine – Manager at Analysys Mason in London and MVNO expert – points out that roaming might be a key differentiator amongst MVNO’s.
Roaming revenues on the rise
Roaming regulations to protect end users and assure correct competition have been introduced in the European Union. This legislation has brought down roaming charges encouraging people not to switch off their mobile phone when travelling. This trend combined with an increasing demand for data is set to significantly increase the whole of roaming revenue and has created opportunities for both mobile operators and MVNO’s. Both trends enable MVNO’s to better compete in the roaming space. While 5 years ago, roaming was not important for MVNO’s, today it should be a no brainer for MVNO’s to include it in their service offering.
How to start monetising the roaming opportunity
An MVNO has three possibilities for outbound roaming: piggyback on the host operator, set up bilateral agreements or use a roaming hub. Light MVNO’s will often simply piggyback on their host operator offering them the best terms in set up but giving them little to no flexibility in the roaming rating. When the reach doesn’t have to be large, full MVNO’s will choose to set up bilateral agreements themselves with specific countries. For the remainder of countries, they can rely on their host operator. Full MVNO’s, roaming only MVNO’s or ethnic MVNO’s targeting travellers have a bigger roaming need. Even if they are small companies, they can generate a nice volume of traffic to specific countries and a roaming hub is in these cases the ideal solution. A roaming hub gives access to hundreds of international roaming agreements. Based on single and dual IMSI technology, it assists MVNO’s to provide subscribers with a seamless roaming user experience. And it supports them to grow more independent from a host operator.
A changing market with roaming opportunities for the MVNO
Within every challenge hides an opportunity. Complying with the new regulation, will put pressure on the rates but stimulate roaming usage. The increase of demand for data also reflects on the roaming needs and will continue to grow. European MVNO’s can grasp part of the rising roaming revenues when they make the enhancement of the roaming footprint part of their strategy.
Written by Katrien Busschaert, BICS | 10 April 2014