Roam Like Home No More – the MVNO perspective

We’ve started to see the first announcements related to roaming in Europe come through. Despite the promises from operators that Brexit wouldn’t change things, here we are facing the reality that some customers will be heading back to the complicated and costly days before ‘Roam like Home’ came in (June 2017).

Each operator is different but it seems new and upgrading customers to brands like BT and EE will be most impacted. They will get charged a fee of £2 to use their minutes texts and data package across 47 European destinations. It’s likely to cause real annoyance on top of everything else travelling abroad conjures up at the moment.

Yes, there are alternatives like using the hotel WiFi or buying a local Sim or even ESIM if data is essential, but generally consumers will be annoyed they have to do this in the first place. That said, I think we’re likely to see some innovation here, as companies tap into the indignation caused and seek to make money by competing head to head. I’m sure more services like https://www.airalo.com/ will pop up.

On the flip side, for my MVNO clients there’s real opportunity. It reverses their fortunes.

By their very nature, MVNOs don’t have the luxury of their own networks, but their consumers still want to roam. When the Roam like Home legislation disallowed charges for EU roaming, MVNOs had a substantial cost risk and no associated revenue. It forced them to include roaming minutes, texts and data in their bundles. This roaming traffic was charged wholesale at a premium, and the MVNOs had no way of recouping the costs. In fact, it was so problematic that some MVNOs applied to be exempt from the legislation.

In a twist of fortune then, UK MVNOs may well be breathing a sigh of relief and can legitimately go back to the original model and charge without making any loss. So, as travel starts to open up, their options to build propositions, which can add extra margin from roamers, or at least mitigate the roaming costs, also open up.

But, and it’s a big but, there is a looming sting in the tail. One of the other “benefits” of Roam like Home was a regulated intra EU wholesale rate. As the UK is no longer obliged to follow Roam like Home, so there’s the potential that host operators may increase these charges for UK MNOs and MVNOs. Once again cost will be back on the agenda for MVNOs.

Of course, in the last four years, MVNOs have worked out roaming cost mitigation. They’ve had to, and because it is such an emotive issue for them and for consumers, they may well choose to continue to offer Roam like Home style offers on the grounds of brand differentiation. If they can find ways to make roaming more palatable compared to the MNOs I think they will.

But they need to get it right first time. So my suspicion is that MVNOs will do one of two things 1. watch to see how consumers respond and then develop their propositions or 2. make a big play on not charging at all. Either way they have to have a good handle on their customer segmentation. Understanding the types of consumer in their base, which could have changed over the last year, and their propensity to want roaming as standard or as ‘bolt-ons’, will be very worthwhile.

But essentially, it all adds up to having a plan, and I believe the sooner they get one in place the better. Even if the plan is to do nothing.

If you need help weighing up the options and developing your mitigation strategy then pick up the phone. I can help you assess the market, whether it’s good to be a leader or a follower here, and the way you can build brand kudos with consumers as a result.

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James Gray

Managing Director at Graystone Strategy

James has over 20 years of experience working in the telecoms and retail industries. He is an expert in subscription-based business models, CRM, direct and indirect channel management and major proposition development and launches. He has held a number of Marketing Director and Consumer Director roles.