Three and Free make important roaming choices

Written by on August 28, 2015 in BillingViews, Opinion with 0 Comments

OLAmongst the good news from Three recently – subscribers up, revenues up, outlook rosy – was a surprising little nugget. Apparently they have saved their customers £1.5 billion in roaming charges since they scrapped them two years ago.

Even if this figure does not quite add up to savings for customers of £750 million a year, it is still quite a saving. And quite a loss of revenue.

We have long been advocates of abolishing roaming charges, before the Regulator dictates that they are abolished. We have happily reported on the skirmishes between ex EU Commissioner Neelie Kroes and the dark suited executives at Vodafone, who, according to a spokesman a year ago,“are not against roaming alliances, they just want a monopoly on them.”

That Three (not to be confused with Free, the French firm that offers free roaming for 30 days anywhere in Europe) can afford that loss of revenue is interesting. Perhaps it is small company after market share vs incumbent. Of course it is not a scientific formula, but if Three, with almost nine million customers can save its customers that, then how much could Vodafone (other companies are available) save its customers. Or, to put it another way, how much revenue would it lose?

Vodafone UK has in excess of 19 million customers. So, presumably, it is looking at losing about twice the amount that Three has done – so £1.5 billion a year.

Multiply that across Vodafone’s portfolio of properties and it is easier to understand their reluctance to abolish roaming charges. And why they can afford so many meetings with the Regulator when they should be sorting out their network across the railways, highways and rural areas of one of the richest economies in the world. Actually, if they invested that £1.5 billion in simple connectivity in one of the richest counties in one of the richest economies in the world, we might sympathise. They did claim abolishing roaming charges would stifle investment.

The question is whether the increase in revenue counteracts the loss in roaming charges, if they were abolished tomorrow.

The answer is that forward looking companies like TripAdvisor fervently believe so, indeed are happy to pay Telefonica to offer their customers roaming packs so that they can continue to use TripAdvisor as they do at home. As Tony Poulos reported after his meeting with the company last year, ‘TripAdvisor has over 280 million unique visits per month and many of those are either existing or potential roamers for mobile operators.’ You can see the potential for TripAdvisor. Other digital service providers are also actively looking to partner with operators. After all, they have the compelling products, the operators have the channel.

Ultimately, the digital service providers are ahead of operators in this kind of thinking and business model. They would indeed be ready to reap the rewards of abolishing roaming charges.

Sadly, as yet, incumbent operators such as Vodafone, are not. And are prepared to throw lawyers and money at delaying the dreadful day.

In the meantime, smaller, agile, forward thinking operators such as Three, Free! in France and Rogers in Canada are paving the way.

We wish them luck.

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Alex Leslie

About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .

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