As operators gear up to delivering LTE roaming in Europe – and with it the promise of ubiquitous IP access for everyone, everywhere – it presents new opportunities and challenges for our individual businesses and for the industry at large.
LTE opens up new possibilities to deliver a compelling customer experience, greatly differentiating from the 3G experience that utilises LTE’s properties of speed, increased capacity and low-latency. Those operators that deliver this experience across borders will undoubtedly have a competitive advantage. 4G consumers’ propensity to use more data is now well-documented and, if we are to assume this behaviour will continue in a roaming context, then the potential for increased revenues for operators is there but the flip side is that this means increased risk of bill shock.
At this stage in the game, some obstacles still exist to delivering truly global 4G roaming. None larger perhaps than the fact that LTE runs on different spectrum bands in the world’s largest economies; the US and China. This presents a considerable technical challenge that will not be overcome for some time, not to mention the monetary impact for device manufacturers aiming to support multiple spectrum bands.
In this new IP world and with the continued pressure on prices in Europe from regulation and competition, how do operators make the roaming business model sustainable while delivering an improved customer experience?
Seemingly, the environment is ripe for change and could and should force operators to be more efficient in how they run their roaming businesses. What is clear is that the charging principles at both a wholesale and retail level, established in the industry for many years and based on per mb rates, need to be completely re-defined. It’s never easy to completely change processes that have become established over a number of years. It will require investment but above all it will require educating customers successfully. I have no doubt that customers understand that roaming comes with a price, however we must coach them through why and how we will deliver that pricing in the future. Above all, as always with roaming, it must be utterly transparent if we are to gain that lost trust.
LTE provides a golden opportunity to take a new approach to pricing for data by charging on the basis of ‘quality of service’, with customers potentially prepared to pay for quicker access and download times. Additionally, operators outside of Europe have already begun to experiment with application-specific charging solutions, whereby costs for data could be paid for by the content provider, rather than the consumer. Offering data for free in a roaming context will be hotly debated as to its pros and cons but the risk of being commoditised like voice is there. What is clear is that the operators that manage to navigate this pricing conundrum successfully will be the winners. As will those that tackle the risk of bill shock successfully, with water-tight solutions that grow consumer trust.
With the inherent retesting requirements that come with 4G to ensure smooth handovers the industry should have no illusions about how long the road is to deliver truly global 4G roaming. Of course no one can be sure what the future of roaming will look like in 12 months or 18 months’ time, but now is the time for the industry to shape a brighter future for operators and consumers alike.
