Updated: May 28, 2020
The Financial Times commented two weeks ago on “the fall of the roaming empire: telecom groups face revenue loss as travel collapses” (in light of the COVID-19 outbreak) – and I have seen others also commenting on it. Having had some involvement with the roaming business at industry level - and also with my previous employer, I have to agree that the roaming regime definitely needs a revamp for the future.
While it is necessary it will unfortunately not be very easy - as there are too many players with strong interests in maintaining the roaming regime as it is. These include not only outbound and inbound roaming operators but also governments in some cases (due to revenues) - but not at least companies that support the operators and live directly from the existing roaming regime, be it clearing houses, various other forms of middlemen or other.
When I was working on this with the GSMA a few years ago, urging operators to have sensible roaming rates and avoiding “bill shock” for consumers, I was pushing for "reasonable" roaming business models within the current setup. It worked out to some extent, but there is still more work to be done.
Today operators with high inbound roaming revenues remain the primary reason for whatever is left of bill shock for consumers. Outbound operators have largely rebalanced prices and bundled roaming with domestic packages - or they are trying to differentiate themselves on outbound rates. In Europe, prices have also been regulated. Now what remains to be done is to get sensible wholesale rates to all inbound countries.
For the long-term, however, I believe there is a need for a totally new regime where the term "roaming" becomes history and where consumers or businesses can still have instant and complete service continuity wherever they are, at sensible cost - and without operators having to spend a lot of time on commercial agreements and technical testing for every new feature. All parties still in business should of course be paid their fair share, but it must all be greatly simplified. With 5G there could be an opportunity to get it sorted – but it will need some work!
Let us see if someone grabs this opportunity. If not, disruptive scenarios will probably continue to grow – and there might also be further regulation. Operators could also end up with more limited interoperability in the future, leaving more space for global players.