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How will the new ‘Roam Like at Home’ legislation affect resellers’ revenue?

July 21st, 2017 by Mandy Fazelynia

The 15th June 2017 saw new legislation come into effect requiring mobile operators to give end users the ability to use their phones in Europe without incurring additional roaming charges. This is a big thumbs up for end-users, but what does it mean for UC resellers and their bottom line?

The new Roam Like at Home regulations are great news for end users. We’ll now be able to use our allocated call, text and data bundles whilst away on holiday in Europe, and keep in touch with family and friends as if we were at home in the UK. And even if we do go over our monthly allowance, we’ll be charged at standard UK rates and not astronomical roaming rates.

But for the big mobile operators, the news isn’t so good. The legislation represents a substantial drop in revenue and a big hike in operational costs. The operators will still have to pay the inter- connect charges incurred from the foreign networks, but they will no longer be able to pass these charges onto end-users which will make a huge dent in their profits.

In fact, analyst firm Juniper Research has estimated that revenue for mobile operators across the globe will drop from £19.4bn in 2016 to £12.4bn in 2017 – that’s a staggering £7bn of potential lost revenue. And for UK mobile operators, it’s estimated that roaming revenues accounted for £2.7bn out of total sales of £18.4bn in 2015 – almost 15% of their total income, which is now in jeopardy. So it’s highly likely that operators will find a way to offset this loss and the most obvious way for operators to do this is to increase their tariffs.

The full picture will become clearer over the next 12 months but there will inevitably be a vast change in behaviour from end users. There’ll be a certain increase in usage abroad and for those who were previously ‘Silent Roamers’ – only using free WiFi to avoid incurring costs – there’s likely to be a substantial behavioural change now that they have their whole UK bundle at their disposal.

Unfortunately, this new legislation could mean a loss of revenue for resellers too and the start of changes to tariffs and charges, but whatever happens, it’s vital that resellers keep their end-user customers up-to-date with what’s going on. Mobile operators have already raised charges for rest-of-world roaming so resellers should communicate this to customers immediately to avoid the occurrence of bill shock.

It’s also crucial for resellers to make sure that customers are aware of which countries are included in Roam Like At Home by network, as not all European countries are and high roaming charges are still applicable within those destinations.

 

The team at Zest4 will be watching developments closely over the coming months and will keep partners up-to-date with any changes from the networks. Our team are also here to support resellers with communications and education for end-users, so give us a call.

For more information and advice on mobile solutions from Zest4, call 0161 956 3355 or visit http://www.zest4.com/mobile.php.