 | Issue: | 2010 |
| Article no.: | 8 | |
| Topic: | Successful delivery of broadband services | |
| Author: | Shlomo Wolfman | |
| Title: | Co-Founder & COO | |
| Organisation: | Starhome | |
| PDF size: | 308KB |
About author
Shlomo Wolfman the co-founder, COO and former CTO of Starhome, has 25 years’ experience in real-time telecommunications systems, telephony and IP technologies. Mr Wolfman has led product development, R&D, marketing and business development teams at leading technology companies such as Comverse Technology, Inc., VDOnet Inc. and Tadiran Telecom Ltd. Shlomo Wolfman holds an MBA and B.Sc in Electronic Engineering.
Article abstract
Smartphone users who use the Internet extensively tend to do so while travelling abroad – but only on their first trip. Bills for data roaming can provoke severe bill shock; many subscribers demand their money back upon their return and/or threaten to cancel their subscriptions. Cheaper ways of making calls when roaming, including Skype, exist. The first operators to seize the opportunity and offer cheaper data roaming will be better prepared to increase their market share and capture new subscribers.
Full Article
A friend of mine, a devoted football fan, was looking forward to travelling to South Africa to see his country’s team play in the World Cup. He packed his scarf and vuvuzela and headed off to the newly revamped Soccer City Stadium in Johannesburg. His iPhone, an integral part of his daily life, was the first item he packed in his carry-on. While he was travelling, he wanted to keep everyone in his Facebook profile posted with new pictures and status updates, and Twitter his every move. He would even be able to send his brothers pictures of the match in real-time. My friend is the kind of guy who simply cannot resist the temptation of checking his emails or catching up with the latest news in his various social network groups. With global data roaming he was able to surf the net and send back pictures whenever and wherever he wanted. He returned home from his World Cup holiday in good spirits, only to be brought back down to earth by his latest mobile phone bill; it was almost equal to his trip to South Africa. He’s now recovering from a severe case of ‘bill shock’. This is not an uncommon occurrence. Many roamers are unaware of the higher prices of data roaming when overseas, and a significant percentage of users demand their money back upon their return and/or threaten to cancel their subscriptions. My friend’s behaviour was no different from that of the new breed of global data roamers. Data roaming has become a natural part of many travellers’ lives and surfing the Internet while on-the-go, is now mainstream when roaming, but at what cost? Evaluating the game The prices of 3G devices are falling sharply and the demand for Internet access is rising. The recent market hype has seen each new dawn bring with it new and improved high-end handsets. BlackBerry, and an abundance of other state-of-the-art smartphones, have caused a stratospheric soar in data roaming. Statistics support the experiential evidence. Informa Telecoms & Media’s latest Global Mobile Roaming Report 2008-2013, predicts that by 2011, after Asia Pacific, Europe will form the second largest mobile data user market by contributing approximately 23.5 per cent of global data users. Game strategy The current use of high-end handsets and the irresistible urge to surf the Internet while roaming has caused a massive surge in global data roaming. The data-roaming explosion in Europe led to EU regulations of data roaming caps in an effort to eradicate bill shock. EU regulations stipulate that subscribers roaming within the EU must be given a data-roaming limit of €50; however, subscribers can opt to increase their usage by selecting another tariff option. The earlier mobile pricing wars for voice calls between operators – and the European Commission – forced various companies to swing into action and offer cheaper ways of making calls when roaming. The first players on the field were Skype. Skype’s popularity soared and now accounts for 12 per cent of global international calling minutes. The use of local SIM cards increased and VoIP calls became more popular. Companies that stepped up to the plate and seized the opportunity to offer cheaper voice call alternatives picked up the gold medal. It is evident today, that even with the new data roaming caps in place, subscribers are still cautious of using their handsets for data roaming while abroad. According to Informa Telecoms & Media’s latest Global Mobile Roaming Report 2008-2013, voice calls still account for 86 per cent of operator revenue. One of the possible reasons for subscribers’ lack of enthusiasm for the new EU regulation is the absence of operator pricing competition in the EU data roaming market. Even with the new age of smartphones and subscriber data addiction, the data roaming market is still not solid enough to offer better choices and rates to subscribers. Competition would drive down rates and offer data roaming subscribers an even better deal than that guaranteed by the new regulations. To establish a lead in the data roaming market, operators must now seize the same opportunity as those who got in early with cheaper voice call alternatives, and offer cheaper data roaming packages. The new WiFi-enabled smartphones that allow subscribers to connect at free public hotspots, surf the net and make VoIP calls and is a good alternative to traditional provider networks. Subscribers are moving towards WiFi enabled phones to cut costs and reduce bill shock upon returning home. The data roaming market is ripe for attractive, alternative, data roaming packages. Operators who get on board early with innovative packages are better armed to beat any future regulations and potential outside competitors. All evidence points to roaming tariff charges as being the main concern for roaming subscribers, and mobile operators who use pricing and bill shock prevention solutions as growth strategies are going to win subscribers. Moreover, operators need not worry about loss of revenue as studies of price elasticity in Europe have shown that if prices are set to match elasticity, revenues can increase without an overall increase in price. The field is ready Fortunately for mobile operators, the transition to more effectively managing mobile roaming data does not have to be difficult, since the major pieces are already in place. Industry experts are predicting the shares of sales for Advanced/Open OS global handsets will increase every year until 2012, when they project sales of these handsets will reach nearly 30 per cent. Feature phones are also proliferating. The browsing capabilities and screen size of these two types of phones provide an advanced mobile data experience. Industry research shows that the majority of international roamers are affluent and they are accustomed to using their mobile device for browsing. This valued segment would not need to be educated from scratch, or even re-educated. In fact, 20 per cent of operator revenue in 2008 came from data services, so subscribers are well aware of how to browse and use the Internet from their mobile devices. Be the first Mobile operators have begun deploying roaming control solutions that provide a bundle of services that will satisfy all of the users’ data, voice and messaging roaming needs, while helping the operators comply with all relevant regulations. Operators who deploy such solutions will be able to provide flat fees and packages, and notifications with prices, to their roaming subscribers. Operators who deploy roaming control solutions also benefit from steering solutions that optimise the quality of services for data roamers. Operators have historically had difficulties steering high-end handsets (such as iPhone and Blackberry), but new technology enables operators to steer based on handset type, so that all roamers can access data. Increase revenue now The decline in the global financial market, coupled with reduced revenues for mobile operators, means that now is the perfect time for operators to search for new revenue boosters. Mobile data roaming is one such area, due to high customer demand, the handsets already in use, the availability of content and advertisers, and the upcoming implementation of stricter regulations. Mobile operators who want to triumph in our competitive market are well advised to keep their eyes on the mobile roaming data segment and be the first to offer innovative initiatives.
