The announcements were of course all made when going abroad was far from our minds, so probably lost on the average consumer. Now there’s a little more hope of holidays. The abundance of adverts on prime-time TV emphasise that tourist operators are hoping to capture the mood with January deals, and I sense people will go for them. Bill shock will be far from their minds, but it’s a real possibility now.

It won’t have gone unnoticed by the serial business travellers, however. When big international conferences and face-to-face sales meetings are back on roaming charges will hit budgets hard.

Technical delays

Analysis in Mobile Europe this week, highlighted that reversing roaming charges isn’t that easy. Vodafone and EE have said they will need to delay their plans because of the ‘unexpected’ technical difficulties they are encountering. This has led some analysts to speculate that VMO2’s decision not to reintroduce roaming rates wasn’t a result of philanthropy but technical capability. I’d say it’s. smart comms – taking an internal disadvantage and turning it into a PR advantage.

Though roaming fees are back on the agenda, this hiatus presents real opportunity for MVNOs. It’s a change in direction that they can capitalise on and use to steal a march on the MNOs.

Don’t forget, in the past, MVNOs have had a difficult time managing roaming. Wholesale costs have always been prohibitive to them putting competitive offers into the market. With no ownership of the network, it was a very one-sided cost too. MNOs benefit from incoming and outgoing roaming costs that can be ‘netted off’. No such luck for MVNOs they were exposed on margin and revenue. To the point that Roam like Home was legislation that some MVNOs challenged and called for exemption from.

In a twist of fate, MVNOs can now exploit the situation. As I see it, there are two clear choices. 1. be a PR hero, like O2, and differentiate by shouldering the costs and attract frequent travellers who will be higher value. Or 2. do the opposite and introduce roaming charges in line with the market and recover margin they have been losing through Roam like home.

eSIM – the real genie in the bottle for MVNOs

But there is a third option – a genie in the bottle. eSIM is where the money will be. It’s ripe for making international customer acquisition a cert.

What do I mean?

eSIM makes it easy to offer great SIM only deals without the need for a physical SIM. It just requires an eSIM profile. For MVNOs based in a European country (or any country for that matter) it’s the perfect way to target the mobile customers coming for short or long-term trips for business or pleasure.

Roaming was always important to people because you could be contacted on your number. But with apps like Teams and WhatsApp in the mix who needs to know your number? The mobile number is becoming less relevant provided you have access to high quality and affordable (read cheap) data.

With that in mind it’s unlikely that every visitor will need or care about having a number. But if you do, then it’s possible thanks to eSIM which provides a local number using local tariffs. It’s quick and easy to set up, which is what travellers will want.

Given operators seem to be reticent to implement eSIM, MVNOs could win here and trigger a far faster adoption of eSIM than expected. Operators will shudder at that prospect. But in the absence of being able to compete they are setting up the perfect conditions for MVNOs to take on the challenge. Customers will discover eSIM.

I know the received wisdom has always been that eSIM makes it easier for churn to manifest. But in markets that have high rates of eSIM penetration that’s not really been the case. It’s not a given IF you get your proposition right.

I’d argue that roaming supports this eSIM ‘stickiness’ too. If I was running an MVNO in any country that gets or will get lots of inbound international travellers, I would be seriously thinking about my eSIM strategy.

Why would you not offer an easy way to download a local SIM profile with lots of included texts and data? No searching for retail outlets, no fiddly set up and no plastic – a good eco message consumers want to hear. Just a new profile on my phone that works seamlessly and makes my holiday go swimmingly wherever I am.

Holidays will feel like a luxury, especially given the economic context households are managing right now. Every penny for hotels, flights, excursions, food and drinks will be scrutinised. Which is why I say, that for the MVNOs that can take some of the bill shock out of the equation, it will be piña coladas all round.

If you want help developing an eSIM strategy, then get in touch. I can help you design propositions for your target customer that will stand up to consumer scrutiny and win brand loyalty.

The post 2022: the year of eSIM? It’s a cert for roaming and MVNOs appeared first on Graystone Strategy.

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.

The post Roam Like Home No More – the MVNO perspective appeared first on Graystone Strategy.

Our research shows that 61% of people are worried about using their phone on holiday for fear of getting a hefty bill when they get home, and a fifth of people never use their phone abroad to avoid bill shock completely. However, once participants in the study were told about the new law, 63% said they would use their phone more, with half (49%) saying they would use more internet services. A further 43% added they would now use streaming services like Netflix and Spotify for at least 30 minutes a day.

Roam like home will have a significant impact on the UK mobile industry. It is undeniably a great deal for consumers, however the impact on operator revenues is significant, estimated by Juniper Research to be £1.3bn in 2017.

MVNOs in particular are disproportionately impacted by the changes as they are unable to sign bilateral roaming agreements and in most cases will pay the regulated wholesale rates for minutes, texts and data.

At the MVNO Congress in Nice in April, it is was very evident that MVNOs are extremely concerned about the risks of significant uplifts in consumers use of data products when abroad. So concerned, that some have negotiated special derogation from the EU to cap the daily roaming use. Find out more in our blog “The Shifting Sands of Roam Like Home.”

These concerns are justified.

What our research shows, is that different customer segments are reacting to the new legislation in different ways.

Technology Trailblazers, a market segment who are highly engaged with their mobiles expect to increase their use of data services. A third of them expect to be streaming for up to 7 hours a week when on holiday, that could be as much as 10GB in just one week.

However, the Settled Senior segment who are older more traditional mobile phone users, don’t expect the change in legislation to make a huge difference to them. Only 25% thought that they would increase their mobile phone use and any increase would only be “a little bit”.

The challenge for all operators now is to understand the different customer types that they have, this in turn will allow them to understand the likely increase in customer use.

Armed with this information operators can effectively build propositions that address the needs of their customers and if necessary mitigate some of the cost risks associated with “Roam like Home.”

At Graystone Strategy we have made this simpler for smaller operators and MVNOs by developing our Mobile Market Segmentation.

The segmentation model allows us to rapidly segment an operator’s base of customers into the 6 different segments. Then using the recent research we can overlay the expected impact of Roam like Home.

So if you want to get ahead of the potential risks of roam like home or more importantly take some of the opportunities that it presents, then please get in touch. Just drop me a message through our website www.graystonestrategy.com or e-mail me directly on james.gray@graystone-strategy.com

The post How will customer roaming use change when they can “Roam like Home” appeared first on Graystone Strategy.