Roaming has and always will be one of the core ingredients behind the success of the wireless industry. Imagine if cellular phones couldn’t roam outside a single cell site, or if subscribers were still restricted to just using their home networks. In my opinion, the simplicity of our domestic voice roaming plans can be traced back to one key event. In May 1998 AT&T Wireless launched a revolutionary service called Digital One Rate. Prior to Digital One, a consumer had to address local rates, high roaming fees and extra long distance charges. Digital One easily consolidated everything into high buckets of minutes at one flat fee. No longer did consumers have to fear bill shock when a “Roaming” icon was on their phone. This became a win-win for all parties. The plan was extremely popular, with new consumers quickly adopting wireless phones as part of their everyday use. The numbers speak for themselves in the table below:
15 years after the Digital One Rate Plan was introduced, the mobile industry again is set to transform the way consumers interface and interact with their devices. This time around involves data roaming. I believe the driving forces behind this growth opportunity are:
- Smart Phone Adoption. Nearly 700 million units were sold in 2012 resulting in a 40% y-o-y growth rate.
- M2M. The use of telematics and other devices will increase significantly over the next 3 years
- LTE Network Launches and Increased Speeds. Video streaming is now the norm.
- New Regulations (both Domestically and Internationally). Will help remove bill shock as well as keep a level playing field between Tier I and Tier III operators.
Over the next few blogs I will dive into many areas impacted by Roaming Management, in particular data roaming. Wireless Carriers are again at a pivotal inflection point which will impact the next 15 years. How do they develop an offering like AT&T’s Digital One Rate, which simplified the process, sparked incredible growth and forever changed the way customers use their wireless phones, but at the same time protect their revenues and support profitability? How do they manage processing and validating their records across multiple technologies and OTT players to eliminate revenue leakage? On the global front, how will plans change to protect customers from bill shock and allow them to freely leverage their wireless devices no matter where they may be across the world?
On a personal note, I recently had the opportunity to travel to Rio de Janeiro, Brazil last week. I discovered the voice and data plans are still too expensive to allow me to freely call or text while in Brazil. I found myself constantly monitoring my phone, switching off the data when not needed. Where possible, I leveraged Skype over WiFi to avoid paying $100s of dollars in roaming fees, but where does this leave the service provider? They are letting an OTT service bite into their core business. I’m still hopeful in the future that International plans will closely replicate the simplicity offered in today’s domestic plans, and allow my one phone to become a true global device.
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