Cell C’s decision to cut international roaming rates is good business
On Tuesday Cell C announced that it had reduced international roaming rates for 99 networks in 58 countries.
Effective from 13 September 2017, the operator will charge a standard fee of R10 per minute for making and receiving calls, R10 per MB of data, and R2.99 per SMS on certain networks in the listed countries.
While these price reductions may appear to eat directly into profits previously earned from roaming customers, the move is part of growing trend of mobile operators offering lower roaming rates.
This is according to a new study published by Juniper Research, which found that operator revenues from international mobile data roaming are expected to grow at an average annual growth rate of 8%, reaching $31 billion in 2022 compared to $21 billion in 2017.
This is despite a global fall in data revenues by 11% in 2017 – as a result of operators increasingly offering RLAH (Roam Like at Home) packages around the world.
RLAH enables users to use their monthly voice, data, and messaging allowance while roaming without incurring additional charges.
“There is very limited room for improvement on voice roaming in terms of increasing the scale of revenue,” said researcher, Nitin Bhas.
“However, with data, alongside the potential to offer customised, contextual roaming bundles and services, the cost per MB is expected to fall significantly in most regions. This will encourage ‘non-data’ roamers to become active roamers.”
The silent roamer
Juniper forecasts that the global average roaming data usage per user per annum will increase from around 500MB in 2017 to almost 1.6GB by 2022.
This is being driven by the targeting of the “silent roamer” – customers who exercise caution, or do not use voice and data services at all while roaming, and are thus are a non-user segment.
Juniper’s research found that this behaviour continues to represent a huge challenge to operators both in terms of customer satisfaction and lost revenue. However, it estimates that silent roamers, declined to 67% of mobile roamers by the end of 2016, down from 71% in 2015.
Furthermore, Juniper forecasts a further decline to 53% by 2022, as operators focus more on silent roamers.
“This sector will continue to offer a far larger opportunity than increasing usage amongst active roamers to offset revenue losses,” said the report.
Read: Cell C launches new Facebook and WhatsApp data bundles
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