This is our latest guest post form Guy Reiffer from MACH. I have fought for transparent tariffs for data roaming for several years and have highlighted some of the points that I agree with!
Towards the end of last year, we announced the results of our annual analysis of roaming traffic. It painted a positive picture for the state of the global data roaming market, showing that data download volumes have increased by 97 per cent year-on-year. For the first time, our analysis showed that subscribers are using data more than voice when roaming. But now is no time for operators to rest on their laurels. The simple fact of the matter is that the volumes of data consumed while roaming remain a fraction of that consumed on the home network. In fact, it is worth noting that subscribers use around 300 times more data at home than they do when abroad. This represents a huge opportunity for operators, but it is an opportunity that can only be realised once operators have worked out how they can encourage subscribers to keep up their data consumption while on their travels.
For this to happen, there needs to be a sea-change in how data tariffs are set for the roaming environment. To a great extent, this will be achieved by providing greater transparency to subscribers over what they are being billed for. Such an approach will effectively remove the fear of bill shock which has, for far too long, made subscribers wary of switching on their data when abroad. So how can this be achieved?
Simply stated, operators need to remove all confusion around roaming charges. Today, the majority of operators structure their tariffs on price-per-megabyte, a model that shares some similarities to the way in which voice calls were charged as a total of minutes used. The problem with this approach is that far too few subscribers actually know what constitutes a megabyte; they have no frame of reference to judge how much they are using. In addition, many smartphones and resident applications continue to consume data even when not being used by the subscriber. This leads to a disconnect between the service that the user perceives that they have received and the bill that they are asked to pay.
Increasingly, operators are instituting transparent, service-based charging packages that are tailored to the individual needs of the subscriber. Business users, for example, have an email-only package which would give them access to their inbox at an economy rate, with additional services such as web surfing carrying a higher cost. MACH’s own studies show that the majority of people want either email, social networking or web browsing, or a combination of these three. By providing an opt in service, the user is protected from background processes consuming their data allowance and the fixed price of these schemes means there are no hidden charges.
Operators typically face significant time-to-market issues when implementing these types of solutions; one operator has quoted a 2 year timeline from concept to implementation. In order to overcome this hurdle, some operators are now moving to third parties who are able to offer cloud-based managed solutions. Such solutions can solve bill shock, offer more choice to the consumer and be implemented in less than 6 months.
In the near future, there is potential for even more innovative approaches to roaming tariffs to be taken. In the EU and other parts of the world, operators are finding their data roaming businesses increasingly put under the regulatory spotlight. It is possible that many operators will look to use service bundling to create packages that are outside the existing regulatory framework – potentially a highly lucrative approach that will also benefit subscribers through greater tariff flexibility. Within the regulated markets, it is also probable that operators will look to utilise unregulated technologies such as Wi-Fi. This will usher in new models for inter-standard roaming, with new tariff structures outside of existing regulation.
The opportunities presented by data roaming constitute what is arguably the most important revenue growth area for operators with MACH’s own estimates indicating the market to be around 900M Euros per annum for the operator community. If it is to be realised, however, tariffs will need to be more granular, transparent and personalised. The way subscribers consume data has changed radically in the world of smart devices we now find ourselves in. The challenge for operators is to adapt their tariffs to this new environment and do everything they can to encourage subscribers to keep on accessing data regardless of where they are.
About Guy Reiffer
Guy Reiffer was appointed Vice President, Marketing for MACH in July 2010, and in June 2011 he took on the additional responsibility of corporate strategy definition. In this role, he assumes full responsibility for MACH’s corporate strategy development, as well as for the company’s global marketing strategy and programme, including product marketing and marketing communications of the company’s full portfolio of hub-based communication solutions. Guy originally joined MACH as Product Marketing Director in early 2010.
A 20 year veteran of the telecommunications industry, Guy has worked for the last 10 years in convergence solutions, mainly at small start up innovators where he has headed up both Marketing and Product Marketing functions. These roles have covered the areas of fixed to mobile convergence, presence & instant messaging, multimedia communication solutions for corporate, and the GSMA Rich Communications Suite.
Guy started out in the telecoms industry in 1989, first working for British Telecom in the UK and then moving to Nortel where he designed and deployed telecom networks in both Energis (UK) and Infostrada (Italy) as part of the deregulation of the telecoms market in the 1990s. During this time, Guy was instrumental in defining the first operator network to use only VoIP in BT Spain.
Now take the low price strategy, not just cheap supermarket and Spanish clothing retail stores, many stores, including large international supermarket chains also taking the same strategy.