Passage to profit
Operators have suffered as a result of a decline in roaming fees from tourists and business people, and now the threat of caps looms large. CommsMEA looks at strategies operators can adopt to bolster roaming revenues
It is telling that the neologism ‘staycation' was picked up by dictionaries in 2009, as a growing number of people around the world shunned holidays abroad in favour of a vacation in their home country. It was not only recreational travellers that cut back on flights overseas, with enterprises slashing travel budgets, resulting in analysts predicting another bumper year for the providers of video conferencing equipment as executives look for an alternative to face-to-face meetings.
Speakers and delegates at last month's Roaming Congress MENA event in Dubai were largely in agreement that the boom period when more travelling simply equated to more roaming revenue has now gone. Faisal Al Dwaikat, director of roaming and international services at STC's Kuwait-based telco Viva, told those gathered in Dubai that during the past year most operators experienced reduced roaming profit, potentially a serious blow when for most operators roaming revenues are a significant percentage of total revenues.
As the economic crisis which dampened travel budgets begins to alleviate, challenges remain for those involved in formulating the roaming strategy for operators, with the region's regulators keen to see a reduction in roaming tariffs.
While the cynical might say this is the usual repeated refrain from the regulators, and although it is true that policy makers have in the past come together to voice concerns about the price of roaming with no impact on prices, it does point towards growing momentum for change.
In January the GCC steering committee of communications and information technology met to consider a reduction on mobile roaming fees. Among the items on the agenda was a memorandum of understanding (MoU) drafted by the Arab Regulators' Network (Aregnet) which called for mobile users to be protected from "unduly high prices charged for international roaming".
As well as calling for greater transparency and more easily accessible information on charges, the document contained proposals to limit the amount that operators can charge roamers based on the cost of international calls.
It should be noted that the MoU allows signatories to opt out of the section that stipulates the prices that should be set for tariffs. And although implementation of the proposals is down to the regulators of each country - and regulators can sign up to the memorandum and opt out of the price control aspects - the document and the discussions surrounding it are part of a wider push for greater control over roaming fees, according to Justin Connor, regulatory advisor for trade group Samena Telecommunications Council. He says that operators need to be prepared for any changes that might be implemented.
The central argument for greater regulation is cost, but the other chief area of concern voiced by regulators is the lack of clarity surrounding the rates charged by operators. Aregnet's MoU suggests a website be established to present the details of charges in a clear and easy to digest format.
It could be argued that it is a suggestion that the industry has already taken on board, although some operators are at a more advanced stage of implementing the concept than others. Spreading the word and informing customers is an important part of the job for roaming teams, according to Tariq Hamid Qureshi, Warid's manager for international business and international roaming, who says that steps need to be taken to make roaming tariffs easier to understand.
"Subscribers need to be educated on roaming tariffs," he says. "There's no point developing good tariffs if you don't educate your customers. Customer service teams need to be trained so they can be familiar with the dynamics. SMS are a great way to inform, and mystery shopping helps to increase the quality of the advice customer service teams give to customers."
Communicating a clear message is easier when the product being pushed is clear, simple and easy to understand. In September 2008, UAE operator Du launched its ‘One region, one rate' platform which standardised roaming tariffs in the GCC, and, the operator says, resulted in a 10% increase in outgoing calls.
Antonio Ricciardi, senior manager marketing, commercial, Du said that the operator identified several areas that had a direct impact on the experience of roaming, with two areas in particular standing out: affordability and simplicity.
The tariff offers three zones with an incoming call rate of AED1.25 per minute, because, as Ricciardi says, "customers are very sensitive to incoming call rates". The operator claims to have seen a 44% monthly increase on acquisition of post paid customers since the launch of One World, One Rate, thanks in part to the roaming products but aided and assisted by other promotions and offers.
As with Du's offer, the central theme to Kuwaiti behemoth Zain's borderless roaming ‘One World' offer was being simple to understand. But the real power behind the proposition came from the number of operators within the group, and the number of borders that Zain customers could in theory skip across without having to find out what it would cost to make a call.
Not all operators have the size and scope of Zain. But going it alone is not an option, according to Wail Saleh, VAS and roaming senior manager at Jordan's third largest operator, Umniah. He uses a well worn phrase to describe the course of action he thinks late entrants and challenging operators should take when it comes to roaming: "If you can't beat them, join them," he says.
Expanding geographical footprint by partnering with operators can generate some good headlines for operators who, with the right marketing, can present an image of a company with a global reach.