Finally, a mobile industry chief declares war on roaming charges

Written by on February 28, 2017 in Opinion with 0 Comments

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The head of Bharti Airtel and the GSMA kicked off MWC17 by declaring a war on mobile roaming charges that are hurting not only the industry’s revenues, but also its reputation.

Sunil Bharti Mittal – founder and chairman of Bharti Enterprises, and the recently elected chairman of the GSMA – said the mobile industry’s reputation with consumers is so bad that in studies evaluating brand reputation, “we’re only just above the tobacco industry.”

One reason for that, Mittal said, was the insistence of cellcos to cling to the old mobile roaming business model that served as a major cash cow for the industry in the early days of mobile. But applying the same model to data roaming has been a disaster, he said.

Roaming was hard enough in the old days where you needed a CDMA phone to roam to the US,” he said. “Now we have a global [3G/4G] network than makes it easy, yet 55% of subscribers switch off their roaming when they travel and buy a prepaid SIM or use Wi-Fi. For subscribers in emerging markets it’s upwards to 90%. This is a disaster that our own industry has created, and it must stop.”

Consequently, he said, “I am declaring a war on roaming.”

To that end, Bharti Airtel stated on Monday that starting April 1, all Airtel customers (including for Airtel’s networks outside of India) would no longer be charged for incoming calls of SMSs, and no premium will be charged on outgoing calls. Also, data roaming charges are now a thing of the past.

Mittal said the GSMA also encourages its operator members to follow Airtel’s example. “Roaming charges and bill shock will come to an end, I promise you,” he said.

The announcement generated considerable applause from the audience.

Mittal added that roaming charges was just one of several problems the mobile sector is facing as it attempts to pursue the GSMA’s vision of ubiquitous 5G connectivity for everyone and everything. Subscriber growth and revenue growth are slowing down while traffic is spiking and capex investments are at best staying flat: “As an industry we are spending $200 billion a year on hard capex, not including spectrum costs.”

Meanwhile, market caps are shrinking and return on capex is declining, he continued: “It’s better to just take that money, let it sit in the bank for a couple of years and go play golf.”

Mittal said that apart from ditching roaming charges, the mobile industry needs other reforms to move forward, starting with the adoption of active sharing of infrastructure similar to the consortium model of subsea cable operators or even the “netco” model of national broadband network projects.

“Current efforts such as tower sharing, passive infrastructure and fiber sharing are great, but they’re not enough,” he said. “We need full netco models. Yes, there will be problems and issues, but the GSMA will look into them.”

On the regulatory side, Mittal urged governments to stop handing out licenses like candy in the name of raking in revenue and spurring competition (which doesn’t work after a certain number of licenses are handed out) and adopt policies that encourage consolidation of network operators.

“You want a few solid operators in each market who have the ability to make the necessary network investments in these new technologies to handle demand for data and deliver the speeds that people want.”

Mittal also called on governments to cut back on unnecessary taxes, levies, overpriced spectrum auctions, USFs and other fees that cut into operators’ abilities to invest. “We are still feeling the heavy hand of the exchequer,” he said.

This article was first published on our sister publication Disruptive.Asia.

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About the Author

About the Author: John is editor of Disruptive.Asia and was previously managing editor at Telecom Asia. He has been covering the Asia-Pacific telecoms industry since 1996. He has two degrees in telecommunications and has worked for six years in the US radio industry in various technical and advisory capacities, covering radio and satellite equipment maintenance, studio networking, news writing and production, the latter of which earned him several regional and national awards. .

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