Telenor Announces Affordable Data Roaming

At the now concluded Mobile World Congress (MWC) 2015 event, there was much chatter about the continuing challenges of how costly roaming is, particularly across Europe.  In fact, it has been a huge problem in Europe for several years that has even attracted attention of regulators to combat what is seen as an “anti-roaming” stance by many operators who seem satisfied with current high-margin rates.

However, Telenor Group chose MWC as the venue for changing the game. Jon Fredrik Baksaas, President and CEO of the Telenor (News - Alert) Group announced it is launching a company-wide retail roaming initiative in a move to eliminate high and unpredictable costs for data-hungry consumers using mobile services while abroad. The company will gradually introduce roaming initiatives across the group, starting with Europe in 2015.

“We want to encourage our customers to use data services wherever they are when on international travels. There shouldn’t be any reason for Telenor subscribers not to use mobile data services also when they are abroad,’’ explained Baksaas. He added, “The move from voice to data is on and we need to deliver affordable, simple and predictable data services to our customers when travelling. I am pleased to announce that Telenor Group is moving ahead and will take a leading position on this widely and long-debated topic.”

The goal is to boost usage and enable customers to use their cellular data plans more

As Telenor pointed out in support of its efforts, most people when travelling turn off their data roaming out of rate shock fears.  They note that almost half of European Union citizens would never use mobile data abroad, according to European Commission (EC) figures. In addition, 90 per cent of them limit their use of basic services like e-mails, whereas more than 25 per cent prefer to switch off their smartphone when abroad.

Telenor knows from whence they speak. Their own statistics show that only 30 percent of Telenor’s European data usage customers are using data roaming when travelling.  Put simply, Telenor Group wants to increase data roaming usage in its European markets to 80 per cent or more by the end of 2017. The reasons are pure economics. They believe the risks of lowering prices far out-weigh the benefits of greater usage.

The company is basing its retail roaming packages on three pillars:

• Affordability (affordable and predictable prices. No need to switch data roaming off)
• Cost control (no surprises. You know what you pay – with default price packages)
• Simplicity (capped and well-known prices per day and geographical zone, only differentiated over 3 zones in the world – and with fixed top-ups when needed).

Telenor Sweden is the  first company within the Telenor Group to launched a new data roaming package. In January, Telenor started offering Swedish consumers a SEK 29 (EUR 3.1) 100 MB data package per day covering all of Europe. Using Barcelona as an example Telenor says it means that a Swedish customer in Barcelona for one week  gets 700 MB for approximately SEK 200, which compares with approximately 1300 SEK with the price cap of 0,20 Euro/MB as regulated by the EU. It notes that Telenor Norway will be the next business unit to introduce new data roaming packages during the second quarter.

“It’s about time we really do an effort on making roaming attractive for our customers. Roaming is the essence of what mobile communications is all about, being mobile. We also believe Telenor will benefit from this move – switching off data roaming is lost revenue. We will continue to be innovative, strive for attractive solutions and place our 186 million customers at the core of our decision making.’’

“When one of Telenor’s customers roams abroad, the customer uses the network of another operator, which in turn Telenor has to pay for through wholesale roaming rates. The industry therefore also needs to work on driving down wholesale rates and establish wholesale models that encourage increased roaming traffic,’’ concluded Baksaas.

As one of the leaders in rolling out 4G LTE (News - Alert) services, facilitated by the use of next generation signalling capabilities that make roaming easier for the customer on a variety of fronts including security and interoperability with other service providers, this acknowledgement that “switching off data roaming is lost revenue” illustrates a rather disruptive mindset change. 

Whether it gets copied by Telenor competitors will be fascinating to watch.  Some of the reactions are likely to be driven by where in the process of deploying 4G LTE any given service provider happens to be.  And, even then, as a recent report from GSMA (News - Alert) by Informa, LTE Roaming: Global Market: Status and Drivers for Growth-Deployment plans, vendor choices and monetization strategies, highlights, challenges remain.  In fact, the report describes why Diameter Signaling is such an important part of enabling operators to make LTE roaming economically viable. 

In the short term defaulting to Wi-Fi when travelling, despite the hassles this may involve is going to be the preferred solution for frequent travellers. How far Telenor can move the bar on having subscribers use Telenor’s services instead of Wi-Fi by leveraging its signalling capabilities is something literally the whole mobile world will be watching.