Compared to Europe, roaming in the Middle East is still emerging. The region benefits from a high number of international visitors and migratory workers moving between countries, which increases the demand for roaming services in the region, leading to increased revenue for operators.
“We expect roaming revenues in the Middle East to increase, primarily driven by improving regulatory environment. The Gulf telecoms regulators have joined hands to regulate and reduce roaming prices in the region. The Gulf Cooperation Council (GCC) imposed roaming-voice-price caps in 2007, followed by SMS- and data-price caps in 2013. In May 2014, nine operator groups in Africa and Middle East announced their initiatives to reduce retail roaming tariffs across the region,” said Nishi Verma Nangia, senior analyst at Ovum.
Isabelle Mauro, head of Africa and Middle East at the GSMA comments that “where there is customer demand, operators look to make the appropriate investments as there needs to be a commercial driver to negotiate a roaming agreement. Where there are sufficient commercial reasons, for instance, people travelling outside the country or a high level of tourists visiting a country, then this will establish a need to provide roaming services.
The opportunity for operators is there. Many countries in the MEA region have become international business hubs and customers are demanding the service. To monetise this opportunity, analysts believe that innovative offers combining voice, SMS and data will help get more customers to use roaming.
“We are expecting an increase in the roaming traffic which will inevitably impact revenues,” said Tamara Al-Bakri, senior manager of Roaming and Interconnection at Vodafone Qatar.
John Lincoln, senior vice president, Small and Medium Businesses at Etisalat said that roaming requires different subcriber options: “The average trip of a roaming customer extends over four days and there are several trips in the same month. Hence, the need for month-long roaming packs is acutely felt. Most of our new roaming packs do not have binding contracts unlike other similar packages.
When negotiating with other countries, operators face the fact that international gateways, the facility through which domestic callers are connected to international numbers, are monopolies in at least 31% of Arab countries, according to the GSMA. Countries with liberalised gateways have experienced an increase in international calls and have reduced the cost of them thanks to increased competition.
“Markets with international gateway monopolies will continue to have high roaming prices as roaming includes international call termination which will be served at higher termination rates under a monopoly. Even if operators try to encourage roaming adoption in those markets, they may not be able to negotiate much on wholesale inter-operator tariffs, and thus roaming prices for consumers will still be high and counter-productive to roaming initiatives,” said Verma Nangia.
“Liberalising international gateways will reduce costs that operators cannot currently control and we urge governments to remove this burden,” noted Mauro.
Telecom fraud in roaming scenarios is an important concern for telecom operators, particularly for operators in developing markets due to the lack of sophisticated fraud detection infrastructure and less stringent regulations, analysts say. Telecoms Fraud — based on technical flaws or flaws in business process — is more common in roaming as criminals seek to avoid expensive international call costs. Roaming fraud is also harder to detect and act on, because the fraud is perpetrated from a network other than that of the subscriber, and because operators need to collaborate to take legal action.
“In markets where international call terminates rates still remain very high — due to international gateway monopolies or lack of regulation— there is higher likelihood of consumers bypassing these high charges and attempting fraudulent activities. These international calls, if carried over illegally, result in poor quality, and thus a shorter call time. And the consumers are rather swayed to other alternatives, such as OTT calls due to poor quality of experience on international calls. Consequently, the operator loses out on both sides,” said Verma Nangia.
In order to detect and combat roaming fraud, there is a GSMA regulated process. The GSMA's NRTRDE (Near Real-Time Roaming Data Exchange) enables operators to exchange roamer's call records between visited and home operators in real-time (four hours or less) to control the fraud globally.
“Cases of roaming fraud are rare but if we are to name an example that all operators in the region might face: the roamer can make roaming usage without having the service enabled or sufficient balance,” noted Al-Bakri.
“A partnership approach between all entities involved in the provision of roaming services is fundamental to minimise and reduce fraud. At an industry level and operator level large investments are made in technology, systems and analysis in order to minimise fraud,” commented Mauro.
OTTs are the alternative for some consumers when avoiding roaming and operators must provide a transparent and improved service to increase the demand for roaming services.
“Even on the roaming side, OTT VoIP services are severely rupturing operators' roaming voice revenues,” comments Verma Nangia.
Al-Bakri said: “Operators are seeking to stem the loss of revenue from inbound data roaming to discrete location WiFi hotspots. They plan to battle back by providing a carrier-grade Wi-Fi alternative for subscribers. Smartphones are fuelling the growth in WiFi and customers are taking this behaviour abroad yet WiFi providers are struggling to monetise.
Operators are also witnessing high taxation on international calls, which form part of roaming calls. “This is a cost that operators cannot control and we urge governments to remove this burden,” said Mauro.
“For instance, Kenya, Rwanda, Burundi, Uganda and South Sudan within the East African region have acknowledged that high intra-regional roaming charges constitute barriers to trade and can negatively impact regional integration which in turn may impact the free flow of goods and services. They have therefore proposed removal of the Surcharge in International Incoming Traffic (SIIT) between them as one of the measures to address this. We welcome this measure, but would encourage them to go further and remove the SIIT for all traffic to help reduce roaming prices,” she continued.
Nine MEA operators to reduce roaming tariffs
In May, nine operators in the MEA region agreed to reduce their tariffs on roaming services to promote mobility and make services more affordable, as CommsMEA reported.
Anne Bouverot, director general of the GSMA said on the announcement that “the initiatives of these nine operators are intended to serve to increase connectivity and make mobile more affordable for subscribers throughout these regions, encouraging greater adoption and usage of mobile services and enabling important socio-economic benefits.
“We have already seen a number of initiatives, for example: Airtel offers free incoming calls and local prices of the visited country across its footprint in Africa; Vodacom’s One Africa provides one low roaming rate on voice, SMS and data on its networks; and MTN (Nigeria and South Africa) recently launched Roam Like Home. We believe this positive trend will continue to provide benefits to customers in both Africa and MENA and shows that operators are responding to customer needs for cost effective regional roaming,” noted Mauro.
“I believe that roaming tariffs will go down. The data prices will go down with time,” comments Ihab Hinnawi, CEO of Umniah, one of the nine operators.
“Vodafone Qatar is committed to reduce the roaming charges and we are doing that already in GCC and Europe through Vodafone Passport. The plan is to include more countries in the Vodafone Passport service and to introduce more innovative roaming offerings. Vodafone is part of the GCC Roaming Working Group and we strongly support this committee’s efforts to reduce the roaming charges and enhance the customer roaming experience,” said Al-Bakri.
Verma Nangia believes that operators are now making a big commitment to make roaming more affordable. “Roaming, though a small percentage of operators revenues, contributes significantly to their profitability. However, operators around the world now do recognise that roaming prices need to be brought down to remove customers' fear of bill shock and encourage roaming adoption,” she said.