Global mobile enabler Syniverse launched a new study, undertaken with economists at Strategic Economic Engineering Corp (SEEC), concluding that delivering aggressive and compelling retail roaming offers to subscribers is the key to helping operators avert $46 billion in opportunity risk caused by focus on newer innovations like the Internet of Things (IoT) and wearables that may prove a costly market distraction.
“The pace of change in today’s mobile ecosystem sometimes makes it difficult to keep focus on core business areas like roaming that still carry tens of billions of dollars in revenue opportunity,” said Mary Clark, Chief Marketing Officer, Syniverse. “It’s critical for operators to take action to protect and drive revenue in the face of fierce battles for subscribers.”
Behind the hype
Although huge estimates have been put on the value of the IoT and wearables markets, operators must commit to major infrastructure investment and wholesale business model changes in order to compete for these revenues. If operators maintain their current business structures, the returns may become just a fraction of their potential.
Significantly larger opportunities ahead
The global roaming market is worth in excess of $57 billion today. It is expected to rise to an estimated $90 billion by 2018 if mobile operators implement the right pricing strategies to unlock increased roaming demand, according to Juniper Research. Roaming represents 4.4 percent of total mobile revenues today ($1.3 trillion in 2015, according to the GSM Association [GSMA]) and could rise to 6.4 percent by 2018 ($1.4 trillion revenues by 2018, according to the GSMA).
Roaming pricing is rapidly becoming a significant competitive differentiator. For example, a number of operators are using increasingly aggressive “roam like home” offers in the battle for domestic subscribers – especially in the U.S., the U.K. and Germany – to differentiate from their market rivals.
By combining primary consumer research, analyst data and market forecasts, SEEC has revealed that potentially $16 billion in revenues may be at risk if major operators do not introduce compelling roaming offers for customers in the U.S., the U.K. and Germany. On a country-by-country basis, this works out at risk values of $13.4 billion in the U.S., $1.7 billion in the U.K. and $1.7 billion in Germany due to subscribers switching service providers to benefit from better roaming offers.
“Our analysis shows the competitive importance of roaming pricing, and, as a result, we’re advocating measures for mobile operators to focus resources on their long-term roaming strategies and deliver the proactive offers and experiences their end users increasingly expect,” said Sam Brown, Founder and CEO, SEEC. “While there is a competitive threat, it’s not all risk and downside. There are billions of dollars up for grabs for mobile operators that can find the right intelligent roaming solutions to unlock end-user demand – a simple evolution of current practices.”
Intelligent roaming upsides
SEEC’s analysis of industry sources has highlighted that the market for intelligent roaming – such as real-time roaming detection and roaming offer campaigns driven by audience segmentation – has the potential to generate significant near-term revenues for operators around the world. Intelligent pricing solutions are essential if the mobile industry is to unlock increases in demand for roaming solutions worth more than $30 billion by 2018, according to Juniper Research. This $30 billion intelligent roaming opportunity combined with the SEEC estimate of $16 billion of revenue that could be lost in the battle for domestic subscribers due to “roam like home” offers has resulted in more than $46 billion potential risk for operators that become distracted.
"Consumers are increasingly viewing roaming pricing as a significant competitive differentiator of mobile operators worldwide," Clark said. "Operators that stay focused and implement intelligent roaming solutions – such as real-time roaming detection, targeted offer campaign management, audience segmentation, discounting and data roaming sponsorship – are in a stronger position to retain subscribers, protect their domestic revenues and benefit from their share of the increasing roaming segment."
About Syniverse
Syniverse is the leading global transaction processor that connects more than 1,500 mobile service providers, enterprises, ISPs and OTTs in nearly 200 countries and territories, enabling seamless mobile communications across disparate and rapidly evolving networks, devices and applications. We deliver innovative cloud-based solutions that facilitate superior end-user experiences through always-on services and real-time engagement. For more than 25 years, Syniverse has been simplifying complexity to deliver the promise of mobility – a simple, interoperable experience, anytime, anywhere. For more information, visit www.syniverse.com, follow Syniverse on Twitter or connect with Syniverse on Facebook.
