As we approach the end of the decade, so much has changed for the telco (especially mobile) and roaming industry in particular. From an end-user perspective, the key visible transition was from voice to data (and associated apps, thanks to smartphones), SMS to OTT messaging, cheaper tariff plans and demand for quality, privacy and security.
From mobile operator’s perspective and vendors in ecosystem, it was an overhaul of the whole technology stack (UE to SIM to radio access to the core network as we migrate from 2G to 4G/VoLTE) and associated backend systems and apps. The roaming industry also evolved drawing similar parallels across core tenets of retail, wholesale, experience and network services. However, if I look at ongoing technology trends (key ones highlighted below), I get an impression that we are just starting and entering the dawn of new era and must prepare of another busy year (and the decade) in the telco and roaming space.
As per industry analysts, the total number of mobile subscriptions are projected around 8B in 2019 and expected to grow at 2% given saturated market penetration, however cellular IoT is projected to grow from 1.3B in 2019 to around 5B by 2025. As per UNWTO, the number of international tourist arrivals was pegged at 1.4B in 2018 and expected to grow at 3-4% growth in 2019. The number of outbound mobile roamers are projected around 837M in 2019. While historically mobile roaming witnessed significant growth in terms of revenue but with the introduction of RLAH (Roam Like at Home), we witnessed significant growth in traffic but flat or declining roaming revenues. Roaming revenues are, however, expected to stay flat (maybe grow at 2% CAGR) over the next four years, representing around 6% of total operator billed revenues and $51 billion in value in 2019. So, what are key drivers for the future of roaming:
VoLTE subscriptions are expected to reach 2.1B by the end of 2019 but still a very small footprint when it comes to VoLTE roaming/agreements. However, as operators sunset 2G/3G networks and prepare to launch 5G SA, VoLTE roll-out/roaming will be inevitable.
Cellular IoT (LTE-M and NB-IoT) roaming is bound to pick up momentum as use cases evolve for verticals requiring global connectivity, service continuity, regional breakout and reduced latency while abiding by permanent roamer and local regulation.
5G subscriptions are expected to hit around 13M by the end of 2019 as operators have launched 5G NSA (Non-standalone mode) with focused use cases of eMBB and FWA. We expect to few 5G SA commercial launches in late 2020. Some of the operators have already launched 5G Roaming but it’s still early days and we have a long way to go. Network Slicing, edge computing, software-defined modular architecture, automation, personalization and cloud-native architecture will be the foundation stone of the networks of the future with inbuilt AI/ML models as operators continue their journey towards digital transformation. However, more than technology, demand for 5G will be subject to killer use cases for enterprise and consumer segment – will it be Cloud gaming for bandwidth craving Gen Z?
Non-public networks (Private LTE/5G) will be visible in many geographies for verticals (no limited to) manufacturing, logistics/supply, mining, utilities. Imagine the number of networks in a country evolving from say 3 or 4 to 1000 (City MNO, Transport MNO, Public Safety MNO). Connectivity, QoS, Privacy and Security will be key service attributes for Industry 4.0 use cases. It will be interesting to see how much of pie will be grabbed by Wifi (with the evolution of Wifi 6), the long-ignored sibling of cellular.
Roaming Regulation is a global phenomenon with models of Roam Like At Home and Roam Like At Destination. As a result, silent roamers will continue to fall in many markets, driven by RLAH and cheaper bundles and so will be the bill shock problem for end-users.
Retail roaming commercial models will further evolve wherein visiting users would be able to a) breakout locally for data access or specialized content through a local subscription while retaining their identity and service profile and b) obtain service from the visited network itself by using a local identity through Remote SIM Provisioning (eSIM). To support that, managing Customer engagement via digital platforms will be key.
Wholesale Roaming commercial models which are technology-neutral will evolve to support VoLTE, M2M annexures and application of a new commercial model of BSR/BCE (Billing & Charging evolution). Many Blockchain-based wholesale roaming clearing & settlement initiatives in PoC stage may become commercially viable as group operators (or consortium) agrees on the same. With 5G, notions of slice charging at wholesale level subject to XLAs (Experience Level Agreements) will be a game-changer and pave the way for roaming-as-a-service.
Customer Experience and quality will be key differentiator what operators can offer to end-users as well as enterprise customers. Visibility on E2E (End-to-End) Roaming and Interconnect quality will be in demand, though AI-powered operations will hold the key to assure customer experience.
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