Cash on the hoof
Dennis Meurs, director of business intelligence at MACH, discusses the data roaming revenue generating options available to MNOs looking for new sources of revenue in a turbulent market.
Not a week goes by without the mention of ‘bill shock’ in regards to roaming. News stories abound about consumers returning home to find hefty bills and of some mobile devices incurring data charges – despite the function having been supposedly switched off. Negative publicity has instilled fear among consumers and business users alike when it comes to travelling abroad and puts them off using their mobile device for data services. The situation has meant that for too long data roaming has not achieved its full potential as a source of revenue for Mobile Network Operators (MNOs). MNOs are well aware of this reality and statistics from a number of European MNOs indicate that more than 40% of travellers switch off their data connection when abroad, preferring to use alternate methods including Wi-Fi and other offload access methods, thus side-stepping potential ‘bill shock’ risk, but equally not using the VPMN partner network. This represents a significant potential loss of revenue, for both the visited network and the home network.
Within Europe, EU legislation put into effect earlier this year has meant that mobile operators are now communicating more effectively with their subscribers about the types and levels of charges they might expect, as well as putting in place near real-time policy controls to ensure usage is properly monitored and managed. The FCC in the US has also commissioned a number of rules for MNOs to notify users when their monthly voice and data plans are nearing their limit. While these elements might protect subscribers from excessive bills and help them overcome concerns about roaming charges, subscribers still have very little idea about what a Megabyte of data actually means in terms of page views or downloads, thus continuing to impact possible data usage whilst travelling abroad. Many Smartphone devices are also set automatically to block data when roaming, although there have been some issues with devices transmitting data despite this function.
With roaming revenue from voice and SMS starting to plateau, the time is right for MNOs to do more to encourage mobile data roaming on their and their partner networks, and fully embrace this new revenue and subscriber loyalty enhancing opportunity. In order to do this, MNOs need to develop a better understanding of customer behaviour. They are sitting on a wealth of subscriber and equipment level roaming usage data. The difficulty traditionally has been to sort and use this data in order to gain useful information. The technology and tools that provide IMSI (subscriber) and IMEI (equipment type) level of business intelligence granularity are now becoming available to MNOs, signalling a new age of micro-segmentation for mobile roaming tariffs.
Using this level of detailed information about roaming data provides MNOs with the missing link helping them get to grips with core information on user behaviour. For example, when considering the lucrative enterprise segment, the marketing department at an MNO could identify their top 50 or top 100 enterprise accounts, then for each enterprise account identify the travel patterns of staff. If these staff are travelling but they are not using data services, then there is an opportunity to promote special tariffs to encourage data usage. The collection of subscriber usage data, carefully matched to user behaviour allows operators to innovate and develop highly tailored retail roaming packages based on the actual needs of individual customers. In reality, this means that MNOs can create packages that will serve individual companies and also address company-wide issues. For example, if a company executive travels regularly to Dubai, it would be possible to develop a roaming package for voice or data roaming that includes a ‘week pack’ for roaming in that region. When it comes to smartphone data usage, MNOs could create plans for specific device types such as the iPad to ensure users can enjoy the full functionality of their devices without it becoming too costly—thereby stimulating roaming usage.
Alongside this micro-segmentation, and in line with the current legislation in development across Europe and the US, MNOs need to be able to set usage policies and intervention criteria. One layer of intervention may result in subscribers receiving a text message alert as their payment plan threshold is approached, or even barring a subscriber from further activity if a particular limit is passed. In order to ensure the appropriate interventions are applied, such an approach can be scaled to each individual user. If we return to the enterprise segment example this means that a very senior executive at a particular enterprise may receive access to a greater amount of data usage, for example, compared with a more junior employee. This approach effectively applies pre-paid controls to post-paid subscriptions, but also encourages roaming data usage with peace of mind.
Data roaming is now booming and the time is right to maximise its market potential. As cultural and work lifestyles take subscribers out of their home-zones more frequently, they become more reliant on the services roaming can provide. Using the right tools, it is now possible to build flexible tariffs that encourage users to take advantage of the full functionalities of their phones when abroad. As the operating environment becomes increasingly saturated and competitive, the timing is right for MNOs to focus on their data roaming business model. In many countries there are a limited number of new subscribers available, so growth must be fuelled by more innovative and strategic methods, which take into account the fast-developing marketplace and the increasingly mobile user. By recognising new revenue development opportunities, MNOs stand to reap fruitful returns.