EU roaming charges are changing
Following the news that Members of the European Parliament have voted in favour of eradicating mobile roaming charges for subscribers across Europe, the telecoms industry braces itself for a new era in international communications.
Since the EU began the introduction of legislation to reduce roaming costs in 2007, the mobile industry landscape has changed completely, from one dominated by voice and messaging to an ecosystem revolving around data usage. This evolution has also had a profound impact on the demand for roaming services, with reliance on data usage leading to demand for constant connectivity.
This has been nourished by the ease of accessibility offered by smartphones and roaming bundles offered by major operators in most major European markets – many of which offer LTE roaming while abroad. The quality and speed of data connectivity is a vital element in encouraging growth. In some markets such as the UK, where all major service providers offer LTE, operators are now offering domestic upgrades from 3G at no extra charge. And it’s no surprise that consumers expect the same level of service while outside of their home market.
How will the EU roaming regulations impact this? Not that significantly.
Many of the operator bundles already in place are priced to encourage usage at the same level when business and consumer customers leave the country. Those paying standard roaming tariffs are likely to be encouraged to increase the amount of data used while abroad, carrying a margin for both the visiting and subscriber networks.
Although service providers are now relying on a decreased margin per unit, ARPU is actually likely to sustain due to the explosion in traffic volumes. This is in addition to an anticipated decrease in ‘silent roamers’ – subscribers who turn off cellular services when they are outside of their home country.
The availability of high-speed roaming services and price reductions seen in recent years have already caused a dramatic increase in data roaming volumes, further lowering the cost will cause an even more drastic rise.
LTE roaming to become a worldwide opportunity
The European summer holiday season sees an annual rise in roaming traffic from holiday-makers venturing further afield, armed with their mobile devices. Since 2014, double-digit monthly growth in LTE roaming traffic has been experienced by carriers worldwide, illustrating this increased demand from for high-speed data is prevalent all over the world.
Nearly all consumers in developed markets across the globe now have access to domestic LTE, and with this widespread availability comes the expectation and demand for similar data speeds when users travel abroad – just like we have seen in Europe.
The depletion of EU roaming fees will impact roaming prices outside of Europe, as operators see the increased volumes that can be achieved introducing value bundles for subscribers. These can be achieved through competitive commercial agreements with selected partners and can provide an excellent value-add for subscribers.
Many forward-thinking operators have already arranged new LTE roaming agreements and the relevant technical interconnections to make this a reality for their subscribers, and are reaping the rewards through both revenues and loyalty.
Opening up the roaming market
Outside of traditional operators, the new legislation also provides great potential to usher in a new era of innovation from new parties in the mobile ecosystem. We are likely to witness the launch of new “roaming only” pan-EU MVNOs, largely focused on the machine-to-machine and data-centric market, which are predicted to be a huge market driver in the coming years. This dynamic new marketplace will further fuel the profitability of roaming services and stimulate cross-border data usage.
Reduced costs also open up the international market to app-based OTT players and small virtual mobile operators (which use a host network to operate in their home country to appeal to niche markets) to begin to provide their subscribers with cross-border services.
As these new players are introduced to the ecosystem, traditional operators will need to collaborate with them to ensure ubiquitous services are offered to all subscribers. The end result is a truly connected continent, where new entrants and competitive incumbents both work to increase mobile usage and ensure complete customer satisfaction.
With LTE providing the backbone for the next generation of communications, this can become a reality and eradicate those who chose to ‘silently roam’ on cost grounds. This boost in roaming traffic will offset the loss operators will initially feel once the ban is set in June 2017 and over the next two years, it is up to operators to capitalise on monetising data roaming where they can, and then once the new cost structure is in place, it will be the subscribers turn to thrive and roam.
Daniel Kurgan is CEO of wholesale telecoms carrier BICS
Mambu and the UAE’s digital banking journey
Miljan Stamenkovic enjoys the dynamic and constantly evolving world of fintech banking. In his current role as General Manager for MENA for Mambu, Stamenkovic sees opportunity in abundance.
“When I joined Mambu with my team in 2019, we came with the fintech, entrepreneurial mindset and DNA to build and grow Mambu’s business in the MENA (Middle East and North Africa) region. Before 2019, the region used to remind me of a desert, at least in terms of cloud service providers and cloud adoption. But this past year has been a wave of progress.” In November 2020, Mambu opened a new office in Abu Dhabi Global Market, as the region has quickly become a key market for Mambu.
He explains, “There are data protection laws. There are cybersecurity regulations and most importantly, a variety of major tier one cloud service providers that are available. But what particularly excites me here at Mambu is the opportunity to rethink business models together with our clients and really bring them to life. This is where I saw a great fit with Mambu and its composable philosophy.”
Creating a neobank and challenger bank ecosystem has been his ultimate goal. “In my opinion, this actually creates a unique opportunity to partner with some of the best fintechs in the region and build the region’s first and true challenger and neobanks.”
Stamenkovic credits Mambu’s partnership with Banque Saudi Fransi (BSF) for the success that has driven the bank forward in the region. “When I think about all the challenger and neobanks that have grown massively over the past decade,there is one common denominator for all these new initiatives. I would say they really operate like a tech company rather than a bank. - BSF is leading this approach in Saudi Arabia.”
He continues, “This brings a competitive advantage for tech companies. These platforms are each managed individually but can be swapped in and out. And when put together, they actually form the backbone of a company's technology capability. This is why tech companies and banks like BSF actually can get products to the market a hundred times faster than their more incumbent peers.”
The implementation, he stresses, is an evolving process, where each component is trialled and checked and swapped in and out according to its effectiveness. But it’s down to the dynamism of the team on the project to initiate these changes. “As critical as technology is to digital transformation, the DNA of people working on these initiatives is the key to success. At BSF they have a true startup and entrepreneurial mentality.”
He explains that Mambu is helping BSF deliver an entire new banking experience while providing soft core banking services hosted, in this case in Saudi Arabia. “Mambu sits at the heart of BSF's new challenger bank and its technology stack. So, this actually enables BSF to take an entirely cloud native approach, having Mambu at the centre of its ‘Digital Engine’.”
Stamenkovic points out, “Mambu enables banking like a modern tech company. Banks used to be built to last, but today they need to be built to change. And that's what we're enabling here.”