Consumers widely welcomed the introduction of EU Regulation IV, which formally came into effect on the 15th June 2017, as an important victory against increasing roaming costs when travelling within Europe. Forcing operators within the European Union (EU) to apply a ‘Roam Like at Home’ (RLAH) with fair usage policy for all roaming subscribers, the legislation aims to thwart anomalous or abusive usage of regulated retail roaming services by customers.

Nonetheless, EU Regulation IV was also predicted to present a number of substantial challenges to EU operators. Areas forecasted to be of concerns included traffic volumes, revenue, fraud, retail rates and abuse.

Mobileum undertook some detailed research with operators across 28 EU states to explore how European operators managed during the initial stages of implementation. The study examined how operators coped in the first month after EU Regulation IV came into operation. This included reviewing if the predicted increase in traffic materialised, if early signs of fraud and abuse had appeared, and whether the large group of previously silent roamers became active users.

More money on data

Respondents were near-unanimous in reporting a strong or very strong increase in data traffic (87%), which was widely expected to be the case with subscribers likely to lose concerns around ‘bill shock’. While only half of operators highlighted an increase in SMS usage, voice usage saw a more significant increase (71%).

However, it is important to review if these increases in usage have been enough to compensate any loss in revenue as a result of EU Regulation IV coming into effect. The responses to this were unexpectedly mixed, with more than three quarters (76%) of respondents highlighting that the usage increase experienced was not adequate to bridge the gap, while a little over a fifth (22%) stated the opposite.

Despite the EU commission stating that domestic retail rates should not rise to recompense for this additional cost, incidences of this happening in some EU countries have been reported. Over a third (35%) of operators we engaged with stated that they planned on changing retail rates based on usage changes. We would expect this to have increased several months on now that the legislation has more fully bedded in.

When it comes to roaming abuse, just over a quarter (26%) of EU operators said they had witnessed an increase or strong increase. Only 17% reported a similar impact in terms of fraud, while unsurprisingly the majority in both cases highlighted no change. Nevertheless, the legislation’s fair usage policy does mean it is becoming increasingly difficult for operators to watch out for abuse and fraud. There’s no doubt that fraudsters will be monitoring what loopholes have appeared and how they can take advantage of them.

Seeking silent roamers

Our research identified a disparity between operators in terms of the visibility of silent roamers. More than half (59%) stated that between 0% to 25% of their roaming customers remained silent, while over a third (34%) estimated it is between 25% to 50%, and just 7% saw more than half of their roaming customers as silent. As subscribers get more used to the introduction of the legislation, we expect to see a large number of these silent roamers becoming active.

Although operators might have introduced fair usage policy for open data bundles, it is evident that finding detection and action on permanent roamers is particularly complex in nature. Although this clearly needs to be addressed, we would recommend that in the long term operators focus on innovative roaming bundles for international roamers. Gaining an understanding of their customers via analytics, segmentation and dynamic/spot pricing is the key to grow roaming revenues for operators, while they should also focus on experience and quality of service to their subscriber roaming in the EU.

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