Tareq Masarweh is analyst at Ovum
Tamara Al-Bakri is head of Roaming at Vodafone Qatar
CommsMEA: Does the regulatory environment in the MEA region promote roaming? What should be improved by regulators to promote roaming?
Al-Bakri: The regulatory entities in GCC region have definitely taken some necessary actions to regulate the roaming rates between GCC countries and currently they are studying the regulation of data roaming in GCC. In addition, they have conducted a big research project in the region to better analyse each of the markets and come out with a solid set of recommendations when it comes to roaming call rates regulation.
CommsMEA: In May 2014, nine operator groups in Africa and Middle East announced their initiatives to reduce retail roaming tariffs across the region, how the roaming business has improved since then?
Al-Bakri: During 2014, many operators in the region have launched very attractive roaming offers and propositions which had an impressive impact on roaming usage where we’ve seen significant growth in traffic especially in data. Additionally, many operators have also started to look closely into silent roamers trying to design targeted offers to stimulate more roaming usage. We see a big potential in this segment which is around 60% of the total travellers who either turn off their cell phones or just receive messages without making any usage.
Rugege: I think that it is still early in the day to make a definite pronouncement on the full effect of the decision by the nine operators made in May last year.
However looking at the ITU ICT indicators Report for 2014, it is worth mentioning that this region has seen tremendous growth in the relevant period. Exactly how much of this growth was as a direct result of the decision made in May last year is yet to be determined.
CommsMEA: Is the customer ready for roaming? How does the bill shocking effect affect the consumer when roaming?
Masarweh: I wouldn’t say many customers are ready for roaming, after all the service was found for those who would still need their number with them while travelling frequently. Multi-simming or purchasing a visitor SIM card upon arrival is and will still be a major trend in the MEA region due to high price sensitivity. I do, however, see that due to the competition in the aviation industry and growing economies in the region, travel is no longer becoming a higher-mid class luxury but rather an affordable activity and hence more can affect the roaming demand curve.
Rugege: The customer has been ready for roaming for a while now. However customers have had to cap their enthusiasm for this valuable service due to the exorbitant cost of roaming, especially data roaming. The Bill shocking effect on the Consumer has been to ensure that their Data roaming is switched off before they even venture out of the network of their local provider. This has a negative effect especially on business travellers who continue to conduct business even when they are away from their home zone.
Al-Bakri: In the region we still need to work on educating the customers more about roaming and change the perception in mind about the roaming charges. Today, many operators are offering roaming packages with daily, weekly or monthly CAP to avoid bill shock situations.
CommsMEA: What should operators do to promote roaming in the region?
Masarweh: One of the most recent and successful models in increasing roaming adoption can be done by an operator working on alliances and partnerships where they ensure to have “preferred roaming partners” that encourages users to spend a prepaid roaming capacity. For example, Etisalat introduced a roaming package where a user can buy voice and data minutes to be consumed within a defined period of time. The capacity is “hard capped” and access expires once either time or units run out, thus insuring the elimination of the surprise factor and increasing healthy adoption.
CommsMEA: What benefits can operators expect when promoting roaming?
Rugege: More traffic, improved competition and lower prices for consumers. and a well ICT connected citizenry.
Masarweh: The ultimate benefit for an operator would be to achieve additional revenues and to uplift the ARPU. However, nowadays it is more of ensuring high-value customers’ stickiness to the network.
Al-Bakri: Silent roamers and low usage customers have become a significant revenue growth opportunity for mobile operators.
CommsMEA: To monetise this opportunity, analysts believe that innovative offers combining voice, SMS and data will help get more customers to use roaming. How would you recommend to monetise roaming?
Rugege: I agree with analysts and will add that all the focus of the above combined offers should be geared and supported in such a way that it keeps the users connected at all times to things that are important in their daily lives without incurring too great a cost due to the fact that they are away from home and local provider.
I would propose that the operators concentrate on providing value-added services that would be enhanced by roaming rather than imposing prohibitive tariffs that discourage roaming. One such a service would be enabling financial transactions like mobile money across borders, monitoring their stock markets, accessing and managing their travel itineraries etc. so consumers can continue to do business wherever they are.
Masarweh: I agree with analyst opinions, in principle. However, these mostly look at uplifting or maintaining ARPUs and trying to get value from the subscriber as much as possible. I wouldn’t agree to featuring a fixed roaming component as travel can be an inconsistent habit to most. I would generally agree with either purchasing a bundled roaming package for the duration of travel when needed or potentially having an add-on option where people opt in and ask to have that right with the bundle (AED 50 a month buys you 150 flexible minutes that can also be used to receive incoming roaming minutes by Etisalat was a smart idea).
Al-Bakri: We believe in customer segmentation and targeted offers to serve every individual according to his/her needs and this includes: Identifying the entire silent and low-usage roamer segments in real time, evaluating the reasons for this behavior and encourage increased roaming usage by customised offering that suit exactly what every customer needs and expects.