BARCELONA -- Mobile World Congress 2017 -- Forthcoming European regulations that will effectively scrap the fees customers pay to use data services abroad are expected to generate a 16-fold increase in levels of data roaming traffic between 2016 and 2018, according to forecasts provided by BICS, the international carrier division of Belgian incumbent Proximus.
The increase is expected to put considerable pressure on operators because it will obviously not be accompanied by an increase in revenues -- but rather fueled by customers taking advantage of the freedom to use their domestic data allowances when travelling.
From June this year, EU mobile phone users will be entitled to use their devices in other EU countries as if they were in their domestic market, with operators banned from charging them additional "roaming" rates.
"Operators are extremely afraid of what will happen in the EU with this regulation," says Raphaël Glatt, the head of signaling for BICS , in a conversation with Light Reading. "Operators have to upgrade and they sometimes don't want to bear the cost or are looking for other ways to handle it."
One immediate consequence could be an increase in the price of other services, says Glatt, such as roaming charges for travel outside the European Union. Yet while operators had repeatedly threatened price increases during their long battle with regulators over roaming, they may struggle to follow through for competitive and other reasons.
Glatt complains that regulations are actually reducing the incentive for operators to make investments in new technologies. Another example, he says, is the EU's tough stance on data privacy, which could be a disincentive to investment in big data and analytics systems.
Such technologies could help operators to identify new revenue streams and develop a better understanding of customer behavior. But operators may be unwilling to spend money on the technology if privacy regulations prevent them from making use of the data that it generates.
The prospect of expenditure on network upgrades to cope with a forthcoming data tsunami sounds like good news for the world's network equipment makers, although Glatt is unconvinced all suppliers stand to benefit significantly given the downward pressure on hardware costs.
"Hardware is also becoming commoditized so it is not as simple as saying you need more and therefore I will charge more," he says. "The challenge for companies now is about finding new revenue streams."
While BICS claims to have been investing heavily in its international carrier network to handle forecast traffic growth, it has also been targeting expansion into new markets and trying to grow its presence in non-traditional customer segments.
Mobile virtual network operators and over-the-top players have in the last couple of years emerged as two of the company's fastest-growth customer groups, for instance. BICS has also been ramping up its portfolio of offerings in areas such as business intelligence, analytics and the Internet of Things. (See BICS Looks to MVNOs, OTTs for Growth.)
"We have to diversify and go for a broader market because the traditional one will not give us the growth that we expect," he says. "We have to expand into other markets and offer them the value we were offering before to mobile operators."
Glatt says BICS is facing tough competition in the market for core network services as well as on the bandwidth side.
"Roughly 50% of operators worldwide have launched LTE roaming so there is still a big market to take even if the value is quite low," he says. "When it comes to bandwidth that is also quite aggressive but if the price per megabyte falls the volume increase might compensate."
— Iain Morris, , News Editor, Light Reading