2016-01-28-奥纬咨询-Roaming_will_radically_change_in_Europe_first,_and_in_most_countries_after_that_8页_943kb

THE ROAMING TSUNAMI: A DISRUPTIVE FORCE IN THE MOBILE INDUSTRY

Core Content

The document discusses the significant disruption caused by the Roam Like At Home (RLAH) regulation in the European mobile roaming market, and its potential ripple effects across the global industry. It outlines how this regulation is transforming the economic model of roaming, leading to a shift from high prices and low volumes to low prices and high volumes. This change is expected to impact operators' business strategies, pricing models, and customer relationships.

Main Viewpoints

• Roaming as a Disruptive Force: Roaming is set to become a radical disruptor, challenging traditional business models and potentially reshaping the entire industry.
• Economic Transformation: Roaming has historically been a high-margin, low-volume business due to opaque pricing and lack of competition. RLAH will force operators to adopt a retail-minus pricing logic, where wholesale prices are determined based on retail needs.
• Impact on Volumes and Prices: The removal of roaming charges will lead to a tenfold increase in roaming volumes, while prices will drop significantly. This shift will make roaming more accessible and reduce the fear of bill shocks among users.
• Cross-Border Price Levelling: RLAH will create a price convergence across European markets, as operators are forced to align their roaming prices with domestic retail prices, reducing the ability of some markets to sustain higher prices.
• Threat to Traditional Operators: The new roaming model could challenge traditional Mobile Network Operators (MNOs) by enabling Mobile Virtual Network Operators (MVNOs) or digital players to enter the market with more attractive, bundled pricing options.

Key Information

Current Roaming Market Issues

• Roaming data prices are 5–100 times higher than domestic prices.
• Only 5–10% of latent demand is fulfilled due to high prices and low volume.
• Consumer behavior is driven by fear of unexpected roaming charges, leading to data disconnection while abroad.

RLAH Regulation Overview

• Effective by June 2017, RLAH eliminated extra roaming charges for EU users.
• Wholesale pricing was capped at €0.05 per minute, €0.02 per SMS, and €0.05 per MB (excluding VAT).
• Domestic retail prices were also capped to ensure parity.
• A fair usage policy limits excessive roaming, but the overall goal is to make roaming affordable and seamless.

Forecast for 2020

• Latent demand is expected to grow 5x by 2020.
• The inherent demand is 125x the current roaming traffic, driven by:
  • +2x total connections
  • +27% international mobility
  • +3x usage per user

Implications for Operators

• P&L Management: Operators must integrate roaming into a single, unified P&L and move away from isolated management.
• Customer Perception: Roaming is currently seen as unaffordable; operators must redefine it as a value proposition through effective communication.
• Strategic Shift: The disruption is CEO-level, affecting revenues, pricing, and customer retention.
• New Pricing Logic: Operators will need to manage ARPU rather than just unitary prices, similar to how the industry transitioned from standalone voice to bundled services.

What Can Be Done?

Operators should:

• Anticipate retail disruption by introducing worry-free tariffs.
• Review strategic settings to assess threats from digital entrants.
• Improve customer experience to align with digital expectations.
• Communicate effectively the new roaming approach.
• Revise wholesale strategies to reflect new pricing and volume dynamics.
• Prepare for retail price disruption in high-price markets to preserve ARPU.

Broader Industry Impact

• The RLAH model is expected to spread globally, with operators like Vodafone, Telefonica, and AT&T already adopting similar policies.
• The tsunami effect of RLAH could extend beyond Europe, influencing domestic pricing dynamics and competition strategies.

Conclusion

The RLAH regulation marks a Copernican revolution in the roaming business, fundamentally altering how operators manage pricing, volumes, and customer relationships. The transition to a low price, high volume model will require a collaborative, integrated approach and a strategic rethinking of the entire business. This disruption is not only reshaping the roaming industry but also has the potential to transform the broader mobile market.