Hello from MACH Insights 2011: The issue of the moment -- Roaming
Hello from Berlin. That’s right! I’ve been traversing the Globe. On Friday I was in San Diego with Qualcomm and on Sunday I arrived into Berlin for the MACH Insights 2011 event for a fascinating look at the world of mobile roaming and billing.
Roaming is, as regular readers know, a subject close to my heart.
I was dismayed — utterly dismayed — watching Morten Broegger’s keynote yesterday. Morten is CEO of MACH, the company behind the event. I was dismayed by one key figure:
42% of subscribers, globally, do not use roaming when they’re abroad.
Isn’t that ridiculous?
Indeed I gave some thought to sticking up my hand and asking Morten if he could highlight how many subscribers, globally, sort-of-used mobile roaming when abroad.
I’d go so far as to say that a further 30% of people carefully control their roaming bill (for data and otherwise) whilst the rest of the travellers — those with companies picking up the crazy tab — roaming without a care.
Morten is in a position to know precisely what’s going on around the world given the fact that MACH works with 650 of the world’s 800 or so mobile operators, providing an array of roaming, billing and outsourced management services.
It does get worse though.
Another figure I was astounded by was the fact that approximately 40% of enterprise travellers don’t actually use roaming either. Presumably because their CFOs are paying attention to unnecessary or overly inflated costs.
There were some pretty grim faces throughout the audience — most of the 150+ attendees at the event represent some of the world’s leading operators — although glimmers of excitement did appear when delegates got a look at some of MACH’s funky new roaming ideas. (I’ve got a video coming on that shortly).
The thrust of Morten’s message was ‘evolve or die’.
Well, not die. But fade away, slowly.
He highlighted that the that 42% of customers who don’t roam at all represent a phenomenal opportunity for revenue growth. Indeed, the industry knows that the impending (potential) doom of regulation is steadily approaching and instead of fighting it, Morten advises proactively embracing the challenges as an opportunity. Fight it and you’ll lose market share — because one of your competitors will be there to sweep up the disaffected customers.
It’s a compelling message and one that I explored in some detail in the panel discussion that I held at the event. I was delighted to play the role of moderator, especially since it featured such a luminary panel:
– Mark Newman, Chief Research Officer, Mobile Operators Strategies, Informa Telecoms & Media
– Tommy Bertling, Senior Marketing Manager, Swisscom Switzerland
– Lokdeep Singh, VP Tech & Innovation, MACH
– Vesa Terävä, Acting Head of Unit B2 – Implementation of Regulatory Framework, DG Infso, European Commission
Interestingly, even the EU representative charged with investigating the issue of roaming, Vesa Terävä, had his phone’s roaming capability switched off.
At one point, Mark from Informa pointed out that the ability to pick-and-choose from reasonable data plan offerings (e.g. €2 per day for Facebook access from the beach) was the way ahed of the market. I broke off from the panel discussion and asked the audience.
“Is anyone here planning on implementing some modified, new, exciting and fair roaming rates?” I asked, surveying the gathered mobile operator roaming representatives.
Silence.
Total silence.
“So Vesa Terävä is right to be investigating the market then,” I concluded, and we got on with the panel discussion.
No wonder the industry is in a blind panic. It’s not just roaming, there’s a whole host of issues winding up the executives — but roaming is one of the big challenges because it gives the industry the excuse to charge stupid rates to customers.
Let’s be clear, charging for roaming is just an excuse. Fundamentally, it’s an excuse. It was valid years ago. But today, the operators are selling the same piece of rope, just in a different geographic location.
It’s (broadly) the same cellular technology. Indeed it’s the exactly same GSM standardised equipment that I’m using, the only difference is that I’ve traveled to a different country.
The argument for hugely increased pricing gets seriously, seriously sticky when you look at the big mobile operator groups who WHOLLY own networks in tens of countries.
The price of a bottle of Coca Cola does not change (vastly) between the United Kingdom and France. Yes there’s a slight aberration caused by exchange rates. But it’s broadly the same cost. Likewise when you look at the cost of a Big Mac. Or, an Apple Mac. Again, a MacBook Air costs broadly the same in any country, allowing for exchange rate and VAT changes.
Ergo, why should a globalised telecoms provider feel compelled to charge its customers dramatically different prices in different countries?
Because that’s the way it’s been.
Because they depend on that revenue.
Because individual operators still have to argue with each other to hammer out a negotiated cost when there’s true roaming occurring (i.e. when I, as a Vodafone customer, roam on to T-Mobile Germany).
If I’m a Vodafone UK customer, am I actually ‘roaming’ when I use Vodafone Germany? Really? Tell me that with a straight face.
And — back to Morten’s keynote — tell it to the European Union. This is precisely why the EU is having to get stuck into the mobile operators.
Vesa Terävä actually commented that, “This is not something we should be doing.”
I asked him to qualify that, to make sure I hadn’t misunderstood. He confirmed he meant that the EU shouldn’t have to wade into the markets and fix the roaming issue. The market should sort it out.
But it’s not.
And when you’ve got companies such as MACH developing innovative solutions that offer novel ways for delighting the (roaming) customer and for dramatically increasing revenue, it’s seriously disappointing to see lots of roaming stagnation across the globe.
(In the interests of balance, I should point out that MACH are just one of an array of customers who can help operators out managing their roaming challenges.)
Having sat through an array of smart presentations (and after moderating the panel), by the end of the day I was about ready to pop with frustration at the marketplace.
So I did.
I popped, right on camera. Watch me get progressively more annoyed in real time…
Here we go:
