International roaming is one major area that will take a massive hit from the COVID-19 outbreak. You would have thought that the impact of COVID-19 on telecoms operators would be positive. You would be wrong, according to Juniper Research, who have published a free report on the enforced end of roaming revenue for operators.
The report points to a loss for operators of $25 billion in the next few months. This is obviously based on the now crippling effect of stopping travel. Many airlines are already in deep trouble. Some observers believe that a quarter of airlines will go bankrupt. The whole industry will be in jeopardy if Governments do not intervene.
Juniper believes that 650 million passenger journeys will be cancelled and as a result, international roaming will dry up completely.
Yet, the days of paying a premium for roaming are over anyway and it is time that operators found new models to compensate. Perhaps the current crisis will provide a much needed catalyst.
The discussion has been going on for many years at conferences and trade shows. Too often, we have criticised operators for building the network and letting others take the lion’s share of the revenues that it enables. Perhaps 5G will provide an opportunity and an impetus for change. Already we are seeing investment and growth being driven by the outbreak. Telstra, for instance, has pumped money into 5G and halted planned cutbacks.
Suddenly the things that operators have been criticised for in the past are in high demand. As the world goes home to work, bandwidth becomes a precious commodity. We realise that without it we would be stuck.
One thing that is certain is that the world will change shape radically. Companies that were valuable will become far less so. The opposite is true, too.
Sam Smith, chief strategist at Juniper also points out that these lost roaming revenues are completely lost, not simply delayed. And much of the travel that has been cancelled will not be rebooked.
And, of course, once things get back to normal it will be a ‘new normal’. Travel will be examined in much more detail. Non-essential travel will be banned for months to come.
Other areas will enjoy massive growth. Zoom’s share price has doubled in a month, apps that allow virtual parties and gatherings are becoming extremely popular. Games and online content are enjoying enormous growth.
Operators will have to think hard and fast about how to fill a $25 billion hole (even though that is only about 6% of their revenues).
Maybe now, when necessity has to be the mother of invention, operators will look to digital services for extra revenue, or finally grab hold of the fact that they should be our trusted partner in the online world, not simply the gateway.