Global Trends in International Roaming

 As 2015 began, it looked as if roaming charges within the European Union would soon be a thing of the past. The movement to establish “roam like at home” (RLAH) service—meaning that mobile users traveling abroad in member states would pay the same rates for voice, SMS and data that they pay their operator in their home country—began in 2007, motivated in large part by consumer discontent. In 2014 the anti-roaming movement, spearheaded by European Commission telecommunications chief Neelie Kroes, gained momentum, with voice roaming charges cut by 25 percent and those for data by 50 percent in July. Two months earlier, as a culmination of the gradual phasing-out process that had begun in 2007, the 28-member Commission voted to abolish roaming charges completely by the end of this year.

However, it now appears that the excitement was somewhat premature and that the practice of charging for international roaming will not imminently come to an end in the EU. In January 2015 the EC indicated that the December 2015 target date would be pushed back, and a proposal from Latvia, which holds the rotating presidency of the body, mentioned mid-2018 as a possible new goal.

The backing away from the original timetable was brought on by objections from member states and was motivated by factors both economic and technological. One of those is the economic and geographic differences between member states. Among the roaming dissenters were Finland and Croatia; situated on the borders of the EU, both countries have more citizens traveling outside the Union than within it, so that RLAH would cost them more than it would save. Another objection to ending roaming now is the lack of spectrum uniformity across the EU, which makes it more difficult and consequently more expensive (in terms of interconnection fees) for operators to connect their signals across borders.

On the other hand, in certain regions outside Europe we have seen smaller-scale attempts to reduce or eliminate roaming charges, an indication that anti-roaming sentiment exists in many if not all markets and that roaming charges will continue to be eroded over time. In January, the East African Community (EAC) countries—Rwanda, Kenya, Uganda and South Sudan—launched an initiative called One Area Network that provided “roam like at home” voice service to mobile callers from any one of the four countries while traveling in any of the other three. In April the initiative was expanded to include data. Russia has also established no-roaming agreements with neighboring countries in Eastern Europe and Central Asia, while in February Japan and Australia discussed lower roaming costs—especially for data—between the two countries in advance of the 2020 Tokyo Olympics.

Anti-roaming measures are generally seen as a victory for consumers at the expense of mobile operators, and indeed MNOs have vociferously objected to the lowering or eliminating of roaming surcharges on the grounds that they reduce revenues and thus make it harder to invest in the building up of network infrastructure. It is true that better infrastructure will permit lower interconnection fees and thus enable operators to lower roaming fees without damage to themselves, but governments must also participate by auctioning spectrum in such a way that there is more frequency uniformity across borders. From the operators’ point of view, the anti-roaming delay in the EU at least gives them some time to prepare for the inevitable. And politics aside, an important reason why it is inevitable is the increasing presence of public Wi-Fi networks worldwide. Used in conjunction with OTT services including VoIP, this type of connectivity will cause cellular roaming to be less and less necessary over time.

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Japan, Australia to Cooperate on Mobile Roaming

On 13 February Japanese and Australian representatives discussed roaming rates between the two countries in preparation for the Tokyo 2020 Olympic and Paralympic Games. The discussions took place during the first of several Information and Communication Technology (ICT) Policy Dialogues between the countries. The meeting addressed the facts that thousands of people travel between Japan and Australia every year and that there would be substantial benefits from providing transparent and reasonable international roaming rates to these tourists and business travelers. The two countries’ representatives will explore ways to lower mobile roaming costs between them, with a focus on data.

In addition to the EU’s plan of abolishing roaming fees by 15 December 2015, we have also written about other global regions in which countries have struck agreements to reduce roaming costs for customers traveling between them. For example, the launch of One Area Network by Kenya, Uganda and Rwanda on 1 January 2015 drastically reduced roaming for customers calling across the borders in these countries. The East African decrease was intended to help stimulate growth in the telecom sector, as the previous roaming charges were beyond the reach of many people living in those countries.

Any roaming agreement that could potentially be put into place between Japan and Australia, particularly during the 2020 Olympics, will have a positive impact not only on subscribers but on operators, as well, since the lowering of roaming rates will most likely result in increased phone use by customers. Spectators at global sporting events such at the Olympics are very likely to post on social media so operators will drive revenue with reasonably priced data roaming packages. Japan’s overall economy is also likely to benefit because lower roaming rates could result in travelers having more money to spend while in the country. These latest talks between Japan and Australia give us more reason to believe that roaming charges will be reduced or eliminated in both developed and emerging regions throughout the globe.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues or to speak with the research team: http://www.tarifica.com/contactus.aspx

Free International Roaming in Asia

Malaysian mobile operator U Mobile has launched free international roaming services for postpaid consumers traveling across Asia. Travelers to Cambodia, Hong Kong, Indonesia, the Philippines, Singapore, Thailand and Taiwan will receive a 50 MB international roaming data allowance free of charge. Usage beyond this limit will be charged at pay-as-you-go rates, with a maximum of MYR 30.00 (US $9.33) per day. Travelers will have to manually select the partnering mobile networks, which are CamGSM (Cambodia), PCCW (Hong Kong), Telkomsel (Indonesia), Globe (Philippines), StarHub (Singapore), Taiwan Mobile (Taiwan) and True (Thailand). This promotional offer is valid until 30 November 2014.

As free international roaming offers go, this one is limited in scope. It  provides an allowance of 50 MB per day of roaming data in select countries, on select partner networks only. In addition, at a pay-as-you-go rate of MYR 7.50 (US $2.33) per megabyte (which applies to all of the countries where roaming services are provided, except Vietnam), the roaming cap means an excess data allowance of 4 MB per day, which is very small.

However, this offer must be examined in light of other factors. It is the first free international roaming data offer to be launched in Malaysia. Market leader Maxis offers a data roaming plan for 100 countries with a cap of MYR 38.00 (US $11.82) per day. This offer is meant to promote U Mobile’s Unlimited 50 and Unlimited 80 plans, which were launched in January 2014, a month after U Mobile became the second operator to launch 4G services in Malaysia. These plans, priced at MYR 50.00 (US $15.55) and MYR 80.00 (US $24.88), respectively, provide unlimited on-net calls, unlimited data with a throttling threshold of 2 GB and 3 GB, respectively and allow sharing of minutes and data between up to three SIMs with a charge of MYR 10.00 (US $3.11) for each additional SIM. While 4G services are currently limited to small portions of the country, U Mobile’s 3G radio access network sharing agreement with Maxis is enabling it to provide 3G speeds across the country. This latest promotion, though limited in nature, adds some value to a competitive offer and indicates an aggressive strategy on the part of U Mobile, which aims to increase its market share from its current level of 10 percent to between 15 and 20 percent in the next five years.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx