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Plugging the leaks in roaming revenues

Prakash Sadagopan | Oct. 15, 2010
How to tap on the mobile phone customers roaming needs

The mobile phone has become an integral part of our lives, for both work and play, with recent reports predicting that smartphones will account for 54 percent of the mobile phone market in Asia Pacific by 2015, further driving mobile broadband data use which is expected to bring in US$38 billion for operators in the region (Source: Frost & Sullivan, 2010).

The growth in smartphone use across Asia means more customers are using data services to access their e-mail and social networking services on the go, providing a large market opportunity for operators. Mobile service providers have encouraged this trend by introducing flexible data usage plans and data caps that allow customers to enjoy their use of mobile broadband services without worry, enhancing the user experience and positively impacting user loyalty.

However, this cap does not apply to charges incurred when roaming overseas. More savvy customers, mindful of the potentially huge charges for using data abroad, disable Internet capabilities on their devices, impacting the opportunity for operators, to generate more revenue. The same can be said of users who have experienced bill shock, the most recent being an incident where a Singapore subscriber chalked up more than S$1,000 (US$772) in roaming costs on her mobile device over just three days while on holiday in Malaysia.

In Europe, the European Commission has announced roaming caps of 0.80 (US$1.12) per megabyte of data used, and a maximum cap on bills of more than 50 (US$70)─ bringing an end to bill shock issues for customers. Many have predicted that this will mean charges are simply passed on to customers at home as operators try to recoup this lost revenue stream. However, simply increasing the cost of local services could be a damaging move for operators, alienating customers who are not loyal or locked in to their mobile providers.

Although roaming caps have yet to be implemented in Asia, it is envisioned that this could happen anytime in the future, and will be an issue of concern for mobile operators. The astute provider will see the caps not as a negative, but as an opportunity to not only generate revenue, and strengthen relationships with their subscriber base. Cost caps allow customers to feel safe in the knowledge that they will never be charged more than a set amount. As a result, subscribers will not be afraid to make full use of their phones, using data services alongside more traditional voice and text, whether at home or abroad, thus providing operators with new revenue streams.

For many customers a charge of, for example, S$50 (US$38), to browse the Web on the beach, access their e-mail or even use the online street directory to find their hotel is a reasonable part of holiday expenses. Operators who find the right balance of services and offer both access and holiday essentials, such as insurance, travel guides, and mapping services, stand to earn more than they would have done under regular settings.

 

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