COMMENT: Is the region reducing roaming tariffs enough?

Operators in the region see roaming as a traditional revenue stream
Charges, European union, Government, Industry, International call, International calls, Operators, Price cap, Regulators, Roaming, Telecoms, Columns, Data

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Summer is gone and consumers have been roaming around the globe, using the rates that the operators set. Some of them will still experience the shock bill, despite the recommendations that some regulators in the market have announced to prevent this phenomena. Is the region doing enough to avoid this unpleasant surprise after the holidays?

Roaming prices is a major concern for operators and, last year, just nine operators in the Middle East gathered for an initiative presented by the GSMA to reduce roaming prices in the region. However, there is still work to be done.
In May 2015, the GCC Ministerial Committee for Post, Communications and Information Technology approved the gradual reduction of roaming, telephone calls, text messaging and data service prices throughout the GCC countries.

Telcos in the region agree that roaming can become a better revenue source for them if they make it more accessible to their customers and help to reduce the “bill shock” effect, as the Committee explained.

Europe has gone further on roaming regulation and, after reducing the prices last year, the European Commission announced the end of roaming charges in June 2017. The EU has achieved retail price reductions across calls, SMS and data of over 80% since 2007. In Europe, data roaming is now up to 91% cheaper compared to 2007. However, not all the European operators have seen this reduction as something positive for the telecommunications business.

The region is home to prominent business hubs— such as Dubai or Doha, and roaming is a must to offer connectivity when doing business. Roaming is also an important aspect of a healthy tourism industry, and visitors from outside the region are not likely to be impressed by hefty roaming charges. Just to set an example, passenger traffic through Dubai International Airport was up 23.2% from a year earlier to 6.2 million people just in May, according to Dubai Airports.

Given that the opportunity to embrace roaming is here in the region and there are plans to attract more visitors, the operators now have an opportunity to improve customers’ experience of roaming, and potentially increase roaming revenues too. The math is simple: lower fees for voice and data roaming, accompanies with greater transparency, will increase usage.

Thankfully, regulation is in place to ensure that operators throughout the GCC move at the same speed.

In the latest regulation approved in May for the GCC operators, the gradual price reduction is set to begin from 1st April 2016, for a period of three years. The reduction, still to be defined, will be applied for local calls within the roaming country, incoming calls while roaming and text messages. As for data services while roaming in the GCC, the procedure will begin 1s April 2016 and will resume for five years.

These reductions have a limit, as the regulator will have to be reviewed them in three years, for calls and SMS, and in five years, for data services. Operators need continuity in the regulations in order to set long term strategies, which will benefit their business and the country’s economy.

Europe is a great example, where healthy competition is regulated by the European Commission, and since 2007, the volume of the data roaming market has grown by 630%.

While the GCC is a much smaller market than Europe, it is likely that the region will see strong roaming growth in the coming years. This trend will benefit mobile users and operators. But perhaps more importantly, the development shows the power of collaboration between the regulators to harmonise markets and bring positive change.

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