EU Roaming Cap: Can “Roam Like At Home” Be Profitable?
As seen on the Telecom Council’s blog.
Many mobile operators are very concerned about the potential business impact of the European Commission’s proposal to eliminate roaming surcharges, starting June 2017. Soon European Union (EU) member mobile subscribers will be free to “roam like at home” – paying domestic prices regardless of where they travel on the continent.
The regulation could put the nail in the coffin for Mobile Virtual Network Operators (MVNOs) if they can’t find a way to control costs. It could also force smaller operators to limit or even eliminate roaming altogether.
Streaming video consumption is driving the tremendous growth in mobile data usage, including roaming. Ericsson has predicted that mobile video traffic will grow 50 percent annually over the next five years – consuming 75 percent of all mobile data traffic by 2021.
However, for savvy mobile operators, the European Commission’s proposal to eliminate roaming surcharges, along with expanding consumer video use in the mobile market, provide a perfect opportunity to differentiate in a crowded market. MVNOs that want to be “consumer champions”, enhancing and simplifying their customers’ lives, could well lead the market.
Content compression technologies can significantly reduce the bandwidth required for streaming video, but require MNOs to install expensive equipment into their network infrastructure. And, for MVNOs who are at the mercy of their MNO partners, they’ll most likely not get the benefit of these solutions – even where available – as the MNOs goal is to increase data revenue. But device-based video optimization, like MOBOLIZE | Optimize, can achieve the same results as network-based bandwidth solutions, dropping their cost of data transmission by up to 80 percent, with no capital expense.
Roaming cap or not, the ability to significantly reduce the margin impact of roaming data and extend the subscribers’ data enjoyment can only be a good thing – positively impacting customer lifetime value (CLV). With the major MNOs already responding by offering “roam like home” tariffs, cost-effective, device-based optimization can be a powerful strategy for keeping MVNOs in the game.
To learn more about device-based video optimization, please download this white paper.