& cplSiteName &

EU Telecom Market, Sans Roaming Charges

Ravi Kumar Palepu
7/11/2014
100%
0%

Under the new European telecom regulations, roaming charges for voice calls, texts and Internet access will be completely scrapped. In 2015, consumers from European Union member states will be able to use their mobile services at the same price as their native mobile services while roaming. (See Eurobites: Red-Letter Day for Roaming Charges and Continental Shift.)

This new regulation will not only have a positive impact on consumer and traveler costs, but will also drive operators to develop new revenue streams in the emerging telecom trends and services.

Roaming charges for voice calls and mobile data services have been a major hindrance to travellers, as they tend to avoid mobility services due to high roaming costs while abroad. Even for a proactive mobile user, service providers charge a considerable amount to receive a call or to pick up a voicemail message, resulting in an inflated bill at the end of the month. A recent survey by the European Commission of 28,000 EU citizens (conducted on the EU's behalf) illustrates that people drastically curb mobile usage while traveling abroad.

The survey found that:

  • 47% would never use mobile internet in another EU country
  • While traveling, only one out of 10 subscribers use emails in the same way as they would use in their native network
  • More than a quarter of them simply switch off their mobiles when they travel across the EU
  • Most of them divert to SMS, rather than pay for calls.

The new regulation is expected to depress the mobile operators' revenues by 2%; however, the new regulation will also have an upside for other telecom trends, including the Internet of Things (IoT), smart meters, mobile payments, BYOD, mobile apps, and OTT applications, where connectivity is essential.

Short term pain versus long term gain
In the short term, operators might experience some pressure on their margins, but in the long term the increased usage of mobile phones while traveling abroad will benefit the ecosystem as a whole.

The 47% of people who have never used mobile data services while traveling abroad represent an untapped market; this will help to subdue the revenue impact on the operators from the lost roaming charges. Secondly, the market would see additional revenue opportunities and substantial growth in value-added services, such as voicemail, text, OTT, and location-based services.

In addition, operators would be able to charge consumers on delivering content native to their home country -- for example, delivering a UK TV channel to a customer roaming in Italy -- and likewise providing location-based services, such as travel guides, maps, and language translation applications, at a premium cost.

This apart, operators can also look at new revenue streams in the enterprise (B2B) space by offering personalized services to enterprise customers through providing better value propositions on BYOD, unified communications, and M2M services. Across Europe, the EU study suggested that 94% of mobile phone users avoided using Facebook and Twitter while traveling to an EU country other than their own, and 70% of people who call other EU countries limit their call duration. The market will see an upward surge in mobile usage, as customers start to use their mobiles to access the Internet, use mobile apps, and make voice calls while traveling abroad.

Established telecom operators with significant presence in Europe can save on operating costs by opting for cheaper call center locations to service customers. The new regulations will have provisions to simplify the mode of operations across the EU by synchronizing airwaves sales. Small and medium enterprises, and especially mobile virtual network operators (MVNOs) that cater to the European market, will experience a decline in their revenues due to lower margins and an increase in customer churn rate. Subscribers using alternative methods, such as buying cheap SIM cards while traveling, would rely more on their current operator to provide better voice and data services, which will lead to improved average revenue per user (ARPU).

It's even possible that the European Commission will push its telecom reforms to foster a single market, an idea that has received some support in recent days. (See Italtel CEO calls for creation of borderless Europe with single digital market.)

Leading European operators might see an increase in customer acquisition and retention as consumers would be more persuaded by the quality of services, connectivity, and speed, rather than merely the cost. In addition, operators would gain better insights into customer usage and buying patterns, giving them the chance to drastically improve the customer experience.

— Ravi Kumar Palepu, Head of Telco Solutions, Virtusa Corp.

(1)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
vijay.srirambhatla
100%
0%
vijay.srirambhatla,
User Rank: Light Beer
7/17/2014 | 9:08:03 AM
Thanks for the interesting articile-
Ravi,

Thanks for the interesting article, well explained and insights on Operator & Consumer essentials with respect to Short term pain versus long term gain.

Many thanks,


Vijay S
More Blogs from Column
The technical challenges of going wireless aren't small.
As new ambitions demand next-gen support, IBB has identified three primary ways that CSPs can upgrade their OSS/BSS systems to deliver that support.
To succeed at virtualization, operators need to realize that standards bodies, open source initiatives and vendor ecosystems aren't going to help.
MANO in the NFV space will be put through its paces at Light Reading's fourth annual Big Communications Event in Austin next month.
Take control of your career and confront stereotypes, overcome biases and achieve the full measure of success to which your talent, hard work and ambition entitle you.
From The Founder
Either we perform a complete 'factory reset' on the way the telecom industry creates and deploys virtualization, or we face the consequences.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
The Urgency of Commercial 5G Services

4|26|17   |     |   (0) comments


The progress of 5G has been closely monitored in the industry. At the 2017 Brooklyn 5G Summit, the sense of urgency for a commercial 5G launch had started to surface among operators.
Women in Comms Introduction Videos
How Diversity Helps Comcast Mirror Its Customer Base

4|26|17   |   2:55   |   (0) comments


Diversity brings innovation, creative ideas and a way to reflect the broad spectrum of your customer base, Comcast Director of Customer Experience Jenelle Champlin says.
LRTV Huawei Video Resource Center
Mobile Operators & Video

4|25|17   |     |   (0) comments


Ovum's Ed Barton discusses the latest mobile operator strategies for mobile video.
LRTV Custom TV
Infinera Introduces Instant Network

4|20|17   |     |   (1) comment


Mike Capuano, vice president of marketing at Infinera, discusses the advancement from Instant Bandwidth to new Instant Network capabilities, which include Bandwidth License Pools, Moveable Licenses and Automated Capacity Engineering (ACE).
Women in Comms Introduction Videos
Vodafone's Eubank on Sponsors, Mentors & Moving On Up

4|19|17   |   4:25   |   (0) comments


Vodafone America's Head of Operations Kimberly Eubank breaks down the difference between a sponsor and a mentor and shares why both made a big difference in her career.
LRTV Custom TV
NYC Auto Show: Are We Smart Yet?

4|18|17   |     |   (0) comments


The auto industry is facing some big transformations as electric vehicles, autonomous technology and connected cars are seen as the future of the industry. During the much-anticipated NY international auto show, there was an emergence of new technology and mobility service on the show floor. Aside from performance, brands like Lincoln, Hyundai, Honda, Mercedes and ...
LRTV Huawei Video Resource Center
The Impact of Video

4|18|17   |     |   (0) comments


David Mercer from Strategy Analytics discusses the impact of video on current strategies.
LRTV Custom TV
Pardeep Kohli Discusses Network Transformation & the Market Opportunity for the 'New' Mavenir Systems

4|13|17   |     |   (0) comments


In a brief discussion at MWC 2017, Heavy Reading analyst Adi Kishore talks to Pardeep Kohli, CEO, Mavenir Systems about the creation of the 'new Mavenir' and some of the key challenges facing operators in today's market. A key theme of the discussion centers around operator need for software-only, virtualized solutions and how they will need to adapt to ...
Women in Comms Introduction Videos
Tech Maverick Shares Her Tips for Gender Inclusivity

4|12|17   |   7:28   |   (0) comments


Wendy Hall Bohling, a corporate escapee, author and gender exclusivity consultant, tells her story of sexism, bias and progress along the road to gender equality in the workforce.
LRTV Huawei Video Resource Center
Huawei at MWC 2017

4|11|17   |     |   (0) comments


At Mobile World Congress 2017, the biggest mobile industry gathering of the year, Huawei showcased its new innovations and solutions with the theme "Open Road," which focuses on cloud, 5G, operation transformation, videos and consumer-oriented products. Its campaign has been recognized by three awards given by GSMA.
LRTV Custom TV
China Telecom NFV Infrastructure on RSD

4|6|17   |     |   (0) comments


Lynn Comp, senior director of market development of Intel, is joined by Chong Zhang, storage engineer at Inspur and Ou Li Yan, architect for technology strategies of China Telecom, for a discussion of what NFV brings.
LRTV Custom TV
Nokia's IMPACT Software Demo

4|6|17   |     |   (0) comments


Khamis Abulgubein of IoT market development at Nokia demonstrates IMPACT (intelligent management platform for all connected things), a software solution with a horizontal approach to managing any device on any application.
Upcoming Live Events
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Brazos Hall - Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Surprise! AT&T Markets 4G Advances as '5G Evolution'
Dan Jones, Mobile Editor, 4/25/2017
Did Verizon Outbid AT&T for Straight Path?
Dan Jones, Mobile Editor, 4/25/2017
First Year TIPs the Scale Toward Success
Denise Culver, 4/24/2017
Verizon: Small Biz in Cybercrooks' Crosshairs
Carol Wilson, Editor-at-large, 4/27/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
TEOCO Founder and CEO Atul Jain talks to Light Reading Founder and CEO Steve Saunders about the challenges around cost control and service monetization in the mobile and IoT sectors.
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.