And as people across the EU are packing their bags and beginning to book their summer holidays, the forecast for mobile operators is cloudier than ever—with the telecom industry reporting heavy losses due to the end of roaming charges and the continued rise of OTT mobile apps.
The end of roaming charges in the EU in the summer of 2017 saw holidaymakers and business travelers breathe a sigh of relief and mobile operators scramble to respond to the huge blow to profits by moving to a recurring revenue model.
The highly anticipated move by the EU was in the pipeline for over ten years and was eagerly awaited by the 500 million European citizens who can now make calls, send text messages and use data across borders without their mobile operator applying extra charges.
The push to drive the “roam like at home” policy caused a headache for mobile operators who benefited from the extra charges they could apply to holidaymakers that were calling, texting and streaming content abroad.
It’s no secret that the abolishment of roaming charges was heavily opposed by the telco industry, but the roaming charge debacle is a small chapter in a much larger question facing the industry: how can it adapt to new trends and consumer demands rather than knee jerk reactions that involve blocking popular consumer legislation?
There’s no doubt that the telco industry faces many challenges but there’s also real opportunity in the way overcome these issues.
The Challenges Facing Mobile Operators
The roam like at home policy is just another thorn in the telecom industry’s side and one more problem in a long list of mounting challenges faced by the mobile industry.
OTT mobile app services like Whatsapp, Skype and Facetime are replacing SMS and calls. These “free” services are cutting into the bread and butter of mobile operators and drying up once healthy streams of revenue for the industry.
This trend has seen the industry’s Average Revenue Per User (ARPU) decline from 34.58% in 2007 to 22.11% in 2015. And It’s estimated that by 2019 the OTT market will have doubled with over 330 million active users.
The Internet of Things is also posing difficult questions concerning how well for the telecom industry is prepped for the revolution. A study by Telecoms.com found that 86% of mobile operators say they’re not ready to launch or monetise IoT.
The threat is that their lack of preparation will be their downfall in a similar way OTT services came along and left the industry feeling dizzy with envy.
Beyond the challenges of OTT and IoT, the industry is still struggling to provide customer service that meets consumers’ expectations. Customer service that embraces technology to provide faster and more efficient solutions. A study found that the chances of a customer leaving their mobile carrier rises by 30% if they were on a call with a customer service rep for more than 15 minutes.
Content is Carriers’ New Opportunity
The long timeframe it took for the 28-nation bloc to pass the policy should have given mobile operators plenty of time to come up with creative solutions. The task at hand now is to identify the challenges and turn them into opportunities.
A huge challenge that mobile operators face is the immense growth in traffic which is putting strains on networks. These surges in data highlight the demand for content by the consumer and an opportunity for mobile operators to explore a move to a recurring revenue model where they can charge for content in a win-win scenario for both the consumer and operator.
The opportunity provides a chance for the telco industry to move from a punitary and reactionary model to a model that enhances subscriber loyalty and growth by giving the consumer what they want: high quality content.
The world has changed completely since the iPhone was first introduced and the industry has faced some challenging times. The key lies in leveraging the disruption to the benefit of mobile operators. The good news is that the flip side of a Holiday shopping season is the sharp rise in mobile usage and that means new mobile content subscribers. With large operators now eyeing streaming services, infrastructure improvements and mobile technology becoming as personal and as sophisticated as ever—without a doubt, 2018 will be the year of content.