About author

Lars Houbak is the founder and Chief Executive Officer of Mobilethink since its inception in 1999. Mr Houbak has engineering background, with several years of international experience in the global telecommunications and software industry, working in both Spain and the US. He dedicates most of his time to sales and marketing initiatives including go-to-market strategies and the overall positioning of the company and its solutions to the market.

Article abstract

Roaming charges are prohibitively high, and the pressure to reduce them is growing as Mobile Data usage soars. Operators should consider a new business model that providesseamless handover to local pre-paid SIM card partner. Although the lucrative Data roaming revenues are reduced considerably, the trade-off is gaining greatercustomer retention. The key is to provide on-device self-care with automatically streamed re-configurationofthe local SIM card.. This on-the-air self-care eliminates the high costs of call centres, making this proposition viable.

Full Article

Much has been written over the years about roaming costs being excessive. Surveys on the subject proliferate, and legislators are now getting involved, trying to set roaming capping that cost the taxpayer millions in the process. The simple fact is that network operators are under significant pressure to enhance falling ARPU and roaming charges are now a significant part of their revenues.

The rapid increase in the use of mobile email and internet means that mobile data bills will continue to soar unless the industry takes steps to reduce operational costs and make new investments in their networks.Roaming charges have become a topical issue. They will continue to be so while industry forecasters are predicting mobile data usage over the next few years growing almost 40-fold from 90.8million Gigabytes in 2009 to 3.6 billion Gigabytes by 2014.

Perhaps most concerned about roaming costs are, and will continue to be,business travellers. They simply don’t have time to pop into a local Costa Coffee shop (if they can find one) for free Wi-Fi. They need to keep in regular touch with headquarters. They need to receive emails and calls from their regular customers back home or in other locations.

According to a recent study, two thirds of US businessmen in Fortune 1000 companies are being asked to use their mobile phone less when abroad. Forty-eight per cent admit to checking email and browsing the internet less when abroad than they would if at home to reduce costs, 70 per cent make fewer or shorter phone calls, 20 per cent tie themselves to landlines to make calls, and currently only ten per cent swap to a local SIM to avoid high charges.

Legislators in Europe have set about trying to limit roaming charges within European States. In a Europe-wide survey published by Eurobarometer on international mobile roaming prices, they found that an overwhelming majority of EU citizens believe the EU should step in to make sure that prices for making and receiving calls on mobile phones when travelling in other EU countries should not be substantially higher than those at home. They established that European mobile phone users continue to pay between €4 and €6 for a four minute call abroad and roaming prices for such a call could exceed €12.This is bureaucracy in blinkers. If you’re doing business in Africa or China, any European legislation capping roaming charges has no bearing on the subject.

Clearly, the best solution for operators for better serving a travelling businessman is to handover the customer to local roaming partners via prepaid SIMs. This ensures customer retention since they will receive more stable services from a local SIM card.The home operator may receive a smaller income from the subscriber as a result, but in the long run this will lead to improved subscriber retention if the local SIM switch is hassle-free. Of course, it is also important that each operator has an automatic device re-configuration installedas an option, to prevent losing out on business from the prepaid high data volume business customers... A new mobile business model!

So, in these challenging economic times, with businesses increasingly focused on emerging economies, it’s time to ask “How can we, as a mobile industry, better serve the business traveller”?Quite simply, the mobile industry needs a radical change in the way it goes about business and embrace new, best-practice operations in the rapidly changing and fragmented mobile landscape.

One way would be to continue betting on high revenue from roaming customers. However, the question is: Will this continue to create revenue if the customer is unhappy about the spiralling costs?
The other way is to bet on customer retention by providing a seamless handover to local pre-paid SIM cards from local roaming partners, which will provide a fast track mechanism to get businessmen using ARPU-enhancing Internet services without delay.

To make this work, operators need to eliminate the current high cost of call centre support. If they move to on-device self-care, the customer becomes his own call centre at no cost to the operator!
Intelligent on-device self-care services through Over-the-Air configurations will enable a businessman in Africa, or any other continent, to simply switch on his handset and the new device configuration will be streamed to him automatically and seamlessly, enabling him to surf the net, pick up mail or send MMS immediately.

From an operator’s standpoint, on-device self-care offers other significant savings in customer care. It’s known that one of the top three issues being handled by call centres concerns connectivity and that it takes on averagethree calls to resolve a smartphone issue.If you run the numbers and take the cost of a call centre agent being US$10 per call, a network operator is losing US$30 per user by simply hanging onto the archaic call centre practice of customer care.By investing in low-cost automated connectivity systems that allow OTA on-device self-care, the cost can be recovered within months.

Device manufacturers also have a key role in this new mobile business model, by offering mobile users automated on-device, self-care support. By embedding OTA connectivity standards into devices, which enable the operator to automatically set up the devices with the latest settings, the switch from one SIM to another becomes seamless and user-friendly.At the end of the day, that’s what we all want ... customers who are delighted with their hassle-free service, wherever they may be. That spells high retention and recurring revenues.