Before the IoT there was roaming: The importance of getting the basics right

Mary Clark, Syniverse

There is no doubt that the Internet of Things (IoT) and other wearable innovations boast considerable long-term market valuations. A new report from PriceWaterhouseCoopers predicts that IoT will have a US$4.5 trillion impact on the global economy, adding four percent to global GDP by 2020.

While the report concludes that mobile will play a decisive role in the IoT ecosystem, mobile operators must commit to business model changes in order to compete for these revenues. As Mary Clark, CMO of Syniverse says, operators that adjust their current business structures will be better positioned to benefit from potential IoT opportunities.

Preparing for Internet of Things

The pace of change and innovation in today’s mobile ecosystem can make it difficult for an operator to stay focused on its core business areas – mainly roaming – which carry billions of dollars in revenue opportunity. With IoT still in its infancy, operators must be more pragmatic in their core strategies if they want to benefit from the opportunities promised by IoT and wearables in the future.

According to Juniper Research, the global roaming market is worth in excess of $57 billion today, and is expected to rise, by $30 billion, to an estimated $90 billion by 2018 if mobile operators implement the right pricing strategies to unlock increased roaming demand.

Meanwhile, consumers worldwide view roaming pricing as a significant competitive differentiator between mobile operators. A number of operators use aggressive “roam-like-home” offers to gain domestic subscribers. When surveyed, 35% of customers said they would switch their mobile contract in return for a 50% discount on roaming costs.

Operators can address this by implementing intelligent roaming solutions – including real-time roaming detection, targeted offer campaign management, audience segmentation and data roaming sponsorship – to gain a stronger position to retain subscribers and benefit from their share of the expanding roaming market and IoT market.

Using intelligence to capture revenues

Since roaming is an established industry with the business relationships and underpinning technologies already in place, tapping into these revenues is an evolution of current practices. By leveraging real-time data intelligence tools, operators can provide subscribers individualised pricing offers that are guided by usage patterns. The operator can then generate incremental revenues by using targeted, real-time offers to turn “low spender” or “partial user” (e.g., voice only) segments into regular roamers and to increase revenues generated from high-usage customers.

These individualised pricing offers encourage subscribers to use mobile devices anywhere they travel just as they do at home. For example, an operator can send a roaming subscriber an offer that matches the person’s expected amount of usage with the capability for the subscriber to monitor usage and spending in real time. This incentivises the subscriber to use data to enjoy seamless hotel check-ins, navigation and phone calls all on their mobile device.

Additionally, new, innovative partnerships with consumer brands and enterprises can drive roaming revenues through sponsored data incentives. In this scenario, a brand pays for a subscriber’s roaming data to allow the user to access content. For example, an online travel company could sponsor its customers’ data when making online hotel or flight reservations.

The lack of flexibility in operators’ legacy billing and provisioning systems is the key contributor to stagnated innovation in the areas of roaming offers and intelligence. While justifying changes to these decades-old systems will require analyses and business cases, the return on investing in innovation will enable operators to capture the projected, incremental $30 billion in roaming revenue and will open up considerable potential within the anticipated $4.5 trillion IoT market.

Mary Clark CMO of Syniverse with Syniverse logo in backgroundThe author is Mary Clark,
chief marketing officer,
Syniverse

 

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