Roaming revenue is coming back – time to fix those leaks

roaming revenue
Image by lukpedclub | Bigstockphoto

ITEM: Roaming is set to reclaim its role as a cash cow for mobile operators in the next few years as the COVID-19 pandemic subsides and 5G proliferates. But cellcos will also have to plug a serious revenue leak in their roaming processes.

A new report from Juniper Research reckons that the value of the retail roaming market will reach $19 billion by 2027 globally – a whopping 98% increase from $10 billion in 2022.

According to the report, that growth will be driven by 5G growth in two key areas: (1) the number of 5G roaming subscribers across key international travel corridors between North America, Europe and Asia Pacific, and (2) the amount of data those roaming subscribers will generate.

That’s partly because many of those roamers won’t just be using 5G smartphones – they’ll also be using cellular-enabled laptops, wearables and tablets.

International travel on the rebound

The other key factor contributing to the roaming revenue revival is the fact that international travel is starting to become a thing again. The impact of COVID-19 on travel took its toll on mobile operators.

Stats vary, but according to GSMA figures, operators in “high tourist footfall countries” in Asia, Europe and North America saw revenues drop by 20–30% on average in 2020. In Hong Kong, which notoriously had some of the strictest COVID rules in the world for inbound travelers until earlier this year, roaming revenues plunged 50% in 2020. At the time, Juniper estimated operators would lose $25 billion in roaming revenues by the end of the year because of the pandemic.

The new Juniper report predicts that international travel will return to pre-pandemic levels by 2024. That means mobile operators have some time to prepare themselves – which Juniper recommends they do by turning to roaming vendors to manage the ever-growing complexity of roaming ecosystems.

That’s good news for roaming vendors like Mobileum, Tata Communications  and Syniverse, whom Juniper names as the top three vendors capable of providing the necessary roaming partnerships, service and product offerings, as well as key value-added services like roaming security and risk assessment solutions.

That said, Juniper urged roaming vendors to provide solutions that enable operators to create novel roaming services, such as real‑time self-management platforms protecting subscribers from data overuse whilst roaming. That will enable operators “to reduce the number of silent roamers and thus maximise roaming revenue from international travel.”

Let’s tall about roaming revenue leakage …

In any case, roaming vendors will have their work cut out for them, as COVID-19 wasn’t the only thing impacting roaming revenues. Back in 2021, Juniper warned that mobile operators stood to lose a whopping $2.1 billion in roaming revenue by 2026 from misidentifying roaming data traffic:

The report found that the inability to distinguish between 4G and 5G data traffic using current standards will result in greater losses as the travel industry returns to pre-pandemic levels and 5G adoption increases.

In that report, Juniper said that cellcos would need to reject established roaming clearing practices in favor of the GSMA’s BCE (Billing & Charging Evolution) protocol to minimize revenue leakage.

Research author Scarlett Woodford wrote at the time: “By combining BCE with AI-enabled roaming analytics suites, operators will be ideally positioned to deal with the rise in roaming data. Separating roaming traffic by network connectivity is essential to allow operators to charge roaming partners based on latency and download speed, and maximise overall 5G roaming revenue.”

That report is here.

The new report is here.

Related article: As international roaming revenues stop for operators, now what?

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