LTE Roaming: Global Market Status and Drivers for Growth - Deployment plans, vendor choices and monetization strategies
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LTE Roaming: Global Market
Status and Drivers for Growth
Deployment plans, vendor choices and monetization strategies
Sponsored byContents
Executive summary .................................................................................................................................... 3
The survey respondents ............................................................................................................................. 3
LTE roaming market status ........................................................................................................................ 4
LTE market overview.................................................................................................................................. 4
LTE roaming market outlook ..................................................................................................................... 4
Market development: Strategies to increase LTE roaming usage and take-up ......................................... 5
How are operators planning to approach the pricing of LTE roaming? ................................................... 5
Service strategies: What new services will drive LTE growth? ................................................................. 7
LTE roaming deployment strategies ......................................................................................................... 8
LTE roaming deployment timing ............................................................................................................... 8
Scope and range of LTE roaming agreements.......................................................................................... 9
LTE roaming challenges ......................................................................................................................... 10
Operator strategies for selecting roaming vendors ..................................................................................... 11
Conclusions ............................................................................................................................................... 13
Recommendations .................................................................................................................................... 15
This Informa Telecoms & Media/Tata Communications White Paper is the first of two on the LTE roaming
market that cover the key challenges it faces and the opportunities arising from its development. The second
White Paper, which will be published later on this year, will focus on the evolution of roaming in the face of
changing technology, regulatory, and business models and the strategies operators can adopt to benefit from
this nascent and fast-developing market.
© Informa UK Limited 2013. All rights reserved.
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Limited.
© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com 2Executive summary
1 The global mobile roaming market is at a crucial moment in its development, with a myriad of
technological, strategic and regulatory forces re-shaping a market that is made even more dynamic by
changing end-user behavior. Operators have a unique opportunity to capitalize on these changes and must
prepare in the right way to be able to remain competitive. With the arrival of LTE comes a new technology
standard that both creates new capabilities for operators in terms of quality of experience offered to their
subscribers, and at the same time also significantly increases the complexity of implementing and managing
a robust roaming services in multi-technology environment . In our Industry Survey, the biggest challenges
facing operators in successfully implementing LTE roaming include technical, operational and strategic
issues, including inter-standard roaming, LTE steering of roaming and an expected “signaling storm”. As a
broad base of end users increasingly look to use a myriad of different data services when they travel, it is
essential that operators have the means to offer robust connectivity and a quality of experience that replicates
home-market levels. Without the right underlying technical and operational foundation in place, operators will
miss the opportunity that LTE provides to offer the enhanced quality experience of mobile broadband services
when subscribers travel.
2 This paper finds that the majority of operators have yet to finalize their LTE roaming strategy as they are at
the early stages of in-market LTE rollouts. There are numerous building blocks that operators need to put
in place to realize the LTE opportunity, including the increased complexity and challenges that come with
LTE roaming service deployment. LTE offers operators the opportunity to streamline the number of roaming
partners they have as much as it creates new service opportunities. According to the survey, 54% of operators
expect to have fewer than 50 bilateral roaming partners as they evolve toward LTE, suggesting a growing role
for roaming hubs as operators look to LTE to reduce roaming complexity.
3 This paper also highlights that the mobile data roaming opportunity remains largely untapped, but is set
to accelerate at an even greater rate than at present. While over 40% of survey respondents expect to see
an increase of more than 30% in annual data roaming traffic over the next three years, operators must
put in place the right technical and operational capabilities as well as pricing structures to be able to tap
the huge latent demand for LTE roaming services. Legacy issues surrounding “bill shock” means that many
mobile travelers use mobile data much less than they do at home, representing a significant opportunity for
operators to increase customer value and roaming revenues. Operators will need to continue to rethink their
approach to pricing to stimulate roaming data usage if they want to encourage roaming data use and minimize
the frequency that users connect to free WI-FI networks. Reducing roaming complexity while expanding
roaming reach at the same time as positioning to maximize the potential of the enhanced capabilities of LTE is
the considerable challenge that operators face, and is one this paper hopes to help operators meet.
The survey Fig. 1: What is your company’s primary area of business?
respondents
In May and June 2013, Informa
Mobile operator
Telecoms & Media conducted 32%
an online survey of the global
Other (please specify)
telecoms industry about emerging 7%
LTE roaming trends. More than Roaming hub
1%
400 responses were received, of Mobile virtual network operator
which 188 were from operators 5%
International wholesale carrier
(see fig. 1). 7%
n= 423
Source: Informa Telecoms & Media
In terms of company types,
operator respondents represented
the largest percentage, illustrating included regulators, consultants, segmentation of the respondents,
their interest in the nascent LTE systems integrators, component especially in the number of
roaming market. There were suppliers and OTT service operators that have already
a range of non-categorized developers. So the LTE ecosystem launched LTE or are planning to
respondents (“Others”), which is well represented in this launch.
© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com 3The survey respondents were Fig. 2: In which region are you based?
distributed around the world (see Africa
Western Europe 14%
fig. 2). Europe and Asia Pacific were 22%
especially strong regions, because
of the early LTE rollouts there and
Asia Pacific
because of the large amount of Middle East 22%
intra- and inter-regional roaming 13%
within them. LTE rollouts are taking
North America
place in the other regions, but more 11% Central and Eastern Europe
9%
sporadically there. Latin America
n= 423 9%
Source: Informa Telecoms & Media
LTE roaming market The revenues from global mobile voice roaming, according to Informa
data roaming will increase Telecoms & Media research.
status dramatically between 2011 and
LTE market overview 2016, delivering a total CAGR of The majority of service growth (in
LTE network launches are 13.4%, or approximately US$13 service-specific units) is expected to
accelerating in all regions as billion, over the period compared come from data services; the annual
operators look to increase network with approximately US$5 billion for volume (in MB) of data services is
capacity and offer higher-speed forecast to grow by 328% over the
mobile broadband access than 3G
provides. Building on TeliaSonera’s Fig. 3: Global LTE deployments by region, 1Q13
world first LTE launch in Sweden 34
35
and Norway end-‘09, there were
30
108 networks deployed by end- 23
March ‘13. Of these launches, the 25
Deployments
majority were in Western Europe 20
16
(see fig. 3). 15
11 10 8
10
6
Subscription growth is accelerating 5
as operators build out and expand 0
pe
pe
a
a
a
fic
st
networks and also adjust LTE
ic
ic
ric
Ea
ro
ro
ci
er
er
Af
Eu
Pa
Eu
Am
Am
e
pricing levels to make them
dl
rn
ia
rn
th
tin
id
As
te
e
M
or
st
La
es
N
Ea
attractive to a broad base of users.
W
There were 90.5 million LTE
subscriptions at end-March, with Source: Informa Telecoms & Media
the top 10 markets led by the US
and Japan (see fig. 4). Fig. 4: Global, top 10 LTE operators, 1Q13
30
26.3
LTE roaming market outlook
25
LTE subscriptions (mil.)
If we map the status of LTE roaming
20
deployments onto forecast data-
roaming growth, we see how 15
11.6 10.5 9.3
important LTE technology is, with 10
6.6
its greater capacity and spectral 5.2 5.1 3.5
5
2.0 1.3
efficiency, to both enable this
0
growth and to harness effectively
SA
SA
ss
o
m
+
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S
ra
ile
oM
or
U
PC
co
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le
ob
U
U
C
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ire
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Te
oC
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it by enhancing the customer
y
el
ro
KT
Te
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W
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et
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i
an
ob
SK
M
on
TT
tN
ftb
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experience of using mobile data
riz
N
rin
So
T
Ve
&
Sp
AT
roaming.
Source: Informa Telecoms & Media
© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com 4Fig. 5: Global, voice, SMS and data roaming traffic in service-specific units*, 2011-2016
Roaming traffic 2013 2014 2015 2016 Increase 2011-2016 (%) CAGR 2011-2016 (%)
Voice traffic (mins 000s)
Global total 54,409,531 62,533,731 69,159,700 74,551,861 111.8 16.2
SMS traffic (SMS 000s)
Global total 12,772,717 15,201,615 17,364,576 19,236,429 149.7 20.1
Data traffic (MB 000s)
Global total 4,424,146 5,841,650 7,290,409 8,694,187 327.9 33.7
*Includes local & international voice calls, originating & terminating SMS messages, and business & consumer data
Source: Informa Telecoms & Media
forecast period, compared with global roaming market, primarily by roaming. There is still significant
112% for voice services’ minutes reducing the overall number of trips latent demand among users for
and 150% for SMS messages (see and also by reducing the frequency roaming data services from which
fig. 5). The developing regions of roaming usage, the data roaming operators could profit, and they
show particularly high CAGR rates market remains largely untapped, could capture much of the roaming
in relation to data traffic growth, with considerable latent demand data use that currently goes over
although these regions have waiting to be kindled by changes free Wi-Fi networks if they had the
relatively lower starting points. in usage behavior and operators’ right service mix in place.
roaming tariffing strategies.
Roaming service revenues will How are operators planning
remain dominated by voice between to approach the pricing of LTE
2011 and 2016, but the increasing Market development: roaming?
penetration of smartphones, growth Under pressure from competition,
in application development and
Strategies to increase regulation or a mixture of both,
dissemination of data services to LTE roaming usage operators continue to reduce the
customers through app stores
and take-up amount they charge subscribers
will help to increase the share to use roaming services. During
of revenues generated by data The high propensity to use data the second quarter of each year,
services, the only service that services in-market and the there are a slew of operator
is expected to see growth in the relatively low propensity to use announcements on reduced
coming years, according to Informa them while roaming indicates that roaming rates ahead of the
forecasts (see fig. 6). there is much for mobile operators traditionally busy summer travelling
to do if they are to realize the period. A recent example of this was
While the economic downturn has revenue potential of the roaming Swiss incumbent Swisscom sharply
had a considerable effect on the market, particularly in data reducing, by as much as 70%, the
prices of its mobile data roaming
Fig. 6: Global, market shares of roaming service revenues, 2011 vs. 2016 packages for the EU and to other
destinations.
2011 2016
Related to the issue of the amount
operators charge for roaming
Data Data is how they price the services.
36% 47% Bundling of roaming services is
Voice Voice becoming more widespread among
59% 49%
some of the large multinational
SMS operating groups, with Vodafone,
59%
SMS for example, charging a flat rate to
4% enable subscribers to carry over
Source: Informa Telecoms & Media
© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com 5their home-market bundled voice Fig. 7: Operators are using a lot of new types of data plan in their home
and data allowances. market
Application-specific
plan (e.g., FaceBook, 49.8
In terms of data, it is difficult WhatsApp, Spotify, etc.)
for operators to assess whether QoS-based plans
46.7
charging per MB or using a daily
Dynamic data plans
rate leads to more profitable usage. 39.6
After much experimentation on Shared data plans
38.2
approaches to data roaming, an
Unlimited data plan
emerging trend is for operators 36.9
to offer a range of roaming tariffs Toll free data plan within
a tiered allowance 33.8
to meet the demands of customer
Additional data “Turbo
segments, and, within that range, boost” plan 29.3
the distinct roaming demands of Specific plans for different
devices (i.e., iPhone, 23.1
enterprise and consumer users. In
Galaxy, etc.)
this way, operators can offer daily
Other (please specify) 2.7
data rates with a set data limit and
0 5 10 15 20 25 30 35 40 45 50
per-GB rates for each different Response (%)
customer type.
n= 225
Source: Informa Telecoms & Media
Despite the regulation that caps the
amount European operators can
charge per MB when users travel them. Other operators, especially There is considerable interest
in Europe, there is still a large the large multinationals, can in zero-rated data in the US,
disparity between operators’ data be expected to launch their with AT&T the most vocal about
rates; for instance, Vodafone UK own roaming apps as the year wanting to offer toll-free data,
currently offers daily data roaming progresses. while Verizon and T-Mobile have
in the EU at £0.69 (US$1.08) per also expressed interest in it. AT&T
MB, while Telenor Norway offers To try and increase the use of has gone as far as to survey its
data access in the EU or EEA at a data roaming with LTE, operators customers’ interests in this type
maximum cost of NOK29 (US$4.96) plan to launch a variety of new of data.
per day for 20MB. types of service plans, according
to the survey: 50% of the survey Outside the US, there are already
After years of bill shock, a key respondents plan to launch some examples of zero-rated data.
emerging principle in roaming application-specific plans, while Facebook announced in March 2013
pricing is transparency. To almost as many plan to launch that it is partnering with 18 mobile
increase roaming use, operators QoS-based plans to boost data operators in 14 countries to provide
have to make sure that end roaming use and monetize traffic free or discounted data access
users feel secure in knowing (see fig. 7). to Facebook messaging for their
how much using mobile services subscribers. UK operator EE offers
when roaming will cost them. There has been considerable free access to film downloads as
Some operating groups, such as interest in zero-rating certain part of its tariffs without taking the
Telekom in Germany and Orange, applications among operators in data consumed out of the monthly
have introduced a travel app to numerous markets. The idea of allowance.
help roamers to stay aware of zero-rated data, where content
how much they have used their providers, rather than the mobile Approaches such as these are
mobile while travelling. Through subscribers, pay the operator for already shaping innovation in
awareness of mobile use, roamers consumers’ use of their content, roaming tariffs and will do so more
are likely to use mobile services can be a “win-win-win” for mobile as operators learn what works
more rather than less – as long as operators, content providers and best and what doesn’t in profitably
they know how much it is costing subscribers. driving usage.
© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com 6Service strategies: memory games using services that operators launch
smartphones through LTE in their home markets and also
What new services connectivity. roaming-specific services, such as
will drive LTE growth? • Similarly, SK Telecom launched data-roaming usage applications,
two new price plans to promote travel roaming-related applications
One of the promises of LTE is that games using LTE network and and roaming-related location
it enables operators to launch new more plans to expand gaming services (see fig. 8).
services, including enhanced voice content for LTE users.
and messaging services, that exploit To offer each of these services,
its capabilities. Operators will build on these initial operators will need to be able
foundations to launch more services to use the enhanced capabilities
Broadly speaking, LTE-only content as LTE networks are deployed more of LTE networks in the roaming
and services haven’t been a top widely and as subscription uptake context. They will need to closely
priority for operators at this stage gathers pace. This will become align their LTE roaming technical
of the market’s development, increasingly important for operators capability with the services they see
notwithstanding early Rich as they look to increase the value as the main usage drivers for LTE
Communications Suite (RCS) of the range of services available roaming.
launches over LTE and some other to LTE users to stem ARPU dilution
early moves into the market. and churn to OTT players. While offering and monetizing
services such as video streaming
Operators aren’t seeing LTE-only Similarly, as operators launch LTE will be the most challenging from a
content as the main driver to roaming and extend their footprints technical perspective, each service
differentiate 4G from 3G services and capabilities, they will be in that operators offer over LTE
yet. Instead, they are focusing on a position – and will also face a roaming will need to be provisioned
branding and different bundled commercial imperative – to launch to users to offer the best quality
voice/ data/ SMS allowances to new types of services that use the of experience possible. If the
make 4G distinct from 3G. That capabilities of LTE. These services experience isn’t comparable to the
said, there are some early moves in will be a mixture of the types of in-market experience, users will be
this area, with operators launching
LTE-only content/ services, and also Fig. 8: What specific applications/services do you plan to launch in order
testing of how LTE can be used to to drive LTE roaming usage? (please select and rank your top three)
deliver VAS/ content better than
Top 1 Top 2 Top 3
over 3G. Some examples of this
include: Location-based services
• Sprint examining how LTE can Social networking
be used to optimize mobile video
delivery. Video calling
• The RCS launches by Metro PCS Travel-roaming-related apps
developed with content partners
and operators in South Korea.
HD voice
• Ericsson’s partnerships with
operators on using LTE for Video streaming
broadcast (including Telia, Verizon Rich Communications Suite
and Telstra). (RCS)/ messaging
Premium data connectivity
• South Korean cellular operators, quality
LG Uplus, SK Telecom and KT, are I have no plan to launch
specific applications
targeting mobile games to drive
their LTE markets: Data usage monitor
• LG Uplus has launched 0 5 10 15 20 25 30 35 40 45 50
“C-games”, a cloud-based Response (%)
game platform that enables n=117 (mobile operators and MVNOs)
Source: Informa Telecoms & Media
subscribers to play high-
© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com 7more inclined to stop using it when roaming: South Korean operator The timing of in-market LTE
roaming than they would when in SK Telecom and Hong Kong’s CSL launches is critical because
their home market. Ensuring an have launched an international LTE operators can gain a clear
optimal quality of experience for roaming service, for example. In an competitive advantage if they launch
subscribers is inextricably linked to aggressive move to encourage LTE early in the right way, forcing rivals
the operators’ ability to create and roaming use, the LTE roaming plans to react to blunt any first-mover
monetize roaming data usage. offered by the two operators are the advantage.
same as their 3G roaming charges.
What’s perhaps surprising, given The timing of LTE roaming is less
the enhanced capabilities of LTE, Meanwhile, in June 2013, Tata critical than the timing of in-market
is that a large proportion of the Communications and Telecom Italia LTE because, for the majority of
survey respondents have no plans Sparkle implemented the first LTE ordinary mobile users, LTE roaming
to launch roaming services to take roaming peering between two IPX is not a core service that determines
advantage of these capabilities. providers, laying the foundation how they chose their mobile operator.
However, it can be expected that for growth in LTE roaming traffic. The exception to this is the enterprise
if operators successfully deploy This, along with SK Telecom and market; LTE roaming will be more
specific services and applications CSL’s agreement, shows that the of a critical factor in the selection
that drive LTE roaming use –and early movers are pioneering how to of a mobile service provider for this
when the barriers to deploying them implement LTE roaming and laying sector. Given that the enterprise
decrease – then the operators that the initial parts of the foundation for market historically accounts for
currently have no plans to launch others in the industry to build on. around 80% of operators’ roaming
LTE services will face a strong revenues, offering LTE roaming is
strategic imperative to do so. LTE roaming deployment the next logical step that operators
timing will need to offer after launching
LTE roaming deployment With LTE network launches in-market LTE, and is a service that
strategies gathering pace, operators are will likely be a key differentiating
There are significant challenges to already formulating their LTE factor in future enterprise roaming
implementing LTE roaming, primarily roaming strategies. Despite a negotiations.
because a change in roaming handful of early LTE roaming
architecture is required, including the deployments, notably between SKT Informa’s LTE roaming survey
transition of the GRX service to LTE and its roaming partners in Asia shows that the largest percentage
roaming in the next few years, which Pacific, as well as between Telstra of the operator respondents, 43%,
means maintaining simultaneous SS7 in Australia and CSL in Hong Kong, either have launched or plan to
and Diameter signaling networks. for the majority of operators, even launch LTE roaming in the next six
those that launched LTE early such months – and a further 29% plan
LTE roaming also offers challenges as Verizon and TeliaSonera, these to launch in 6-18 months time (see
from a strategic perspective if discussions remain at an early stage. fig. 9).
operators replicate the bilateral-
roaming-agreement approach in Fig. 9: When do you plan to launch LTE roaming?
the LTE domain. This will lead to a
significant increase in complexity Already launched
as new roaming partners are added More than 18 months 21.5%
28.1%
for LTE, including the operationally-
intensive inter-operator testing
required.
In the next 6 months
21.5%
While LTE roaming is still very much
6-18 months
in its infancy from a deployment 28.9%
perspective, early moves are
being made. Some operators have n=121 (mobile operators, international wholesale carriers)
Source: Informa Telecoms & Media
already implemented bilateral LTE
© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com 8Given that each region differs and experimentation tied to price From a global perspective,
significantly in terms of in-market cutting. domestic and intra-regional
LTE deployment readiness, it’s no destinations remain the top
surprise that there is also a marked Where operators strike LTE strategies for LTE roaming,
disparity between the LTE roaming roaming agreements will largely according to Informa’s survey (see
plans of the operators from the be determined by the insights they fig. 10).
different regions. have from their existing roaming
traffic and expected future growth Looking at this from a regional
Because LTE launches are just to new countries and regions. They perspective, current market
starting to be rolled out in Africa will use new LTE agreements to dynamics will be mapped onto the
and Latin America, the majority of position for this expected growth; LTE roaming scenario, with for
operators in these regions, 52.9% for example, to tap the increasing instance, inter-regional roaming
and 41.2% respectively, plan to traffic in the China-Africa roaming the most important roaming
launch LTE roaming from 2015 on. corridor. destination for operators in the EU.
Conversely, because of the more
advanced status of in-market LTE For many operators, especially The number of roaming partners
rollouts in Europe, Asia Pacific in emerging markets, domestic an operator can connect to is the
and North America, the majority roaming remains the most sum of its bilateral and hubbing
of operators in these regions have important roaming consideration. relationships. Roaming hubs have
either launched LTE already, or plan However, even in markets where seen growth in the amount of traffic
to by the end of 2014. domestic roaming is still in place, they carry since 2009 as operators
this framework is gradually look to consolidate existing bilateral
Scope and range of LTE being eroded in favor of lowering agreements onto hubs, and also
roaming agreements barriers to moving between the to extend their roaming reach.
The economic downturn has had a regions within countries: India is Moreover, the entrance of two major
considerable effect on the global perhaps the most notable example operating groups, Vodafone and
roaming market, primarily by of this, with domestic roaming France Telecom, has helped growth
reducing overall business and expected to be removed later in in the market, as these companies
leisure travel but also by reducing the year. As domestic roaming operate hubs as discrete commercial
the frequency of roaming: Actual regimes are removed, roaming units while also migrating operating
and forecast growth in the number considerations for these operators companies’ roaming agreements
of trips made by mobile users will give way to international onto their hubs. For smaller
fell over the 2007-2011 period roaming, whether it be intra- operators and new entrants, hubbing
at a CAGR of 8.5%, according to regional or inter-regional. makes particularly strong financial
Informa research. However, this
trend is now reversing and the Fig. 10: Rank the following LTE roaming strategies in order of importance
number of trips mobile users make (1 being the most important and 3 being the least important)
is forecast to grow by a CAGR of
15.4% between 2011 and 2016. Not Domestic Intra-regional Inter-regional
surprisingly, the enterprise sector
is forecast to remain slightly more 3
resilient to the economic downturn
than consumers with a CAGR of
2
7.53% in the number of trips that
enterprise mobile users make
over the forecast period. The gap 1
is narrowing though; the number
0 10 20 30 40 50 60 70
of trips made by consumers is
expected see a CAGR of 7.24% Response (%)
over the same period, primarily n= 146 (mobile operators, MVNOs, global carriers & roaming hubs)
Source: Informa Telecoms & Media
as a result of increased usage
© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com 9and operational sense as it allows Fig. 11: How many LTE bilateral roaming partners do you expect to have in
them to efficiently and quickly fill three years time? (please select one option)
the destination gaps in the markets More than 300
8%
where their customers roam. 201 to 300
4% 1 to 25
101 to 200 26%
As operators roll out LTE, roaming 10%
hubs will play an even more
central role in operators’ roaming
portfolio because they will seize 51 to 100
the opportunity to streamline the 24%
26 to 50
number of partners they have. 28%
According to Informa’s survey, the
majority of the operators expect n= 142
Source: Informa Telecoms & Media
to have up to 50 bilateral roaming
partners as they evolve their
roaming strategies in step with LTE Fig. 12: Which one of the following roaming regions/ routes is considered
rollouts (see fig. 11). the highest priority for the next 12 months as you roll out your LTE
roaming service? (please select one alternative)
Eastern Europe
From a regional perspective, 4% Africa
operators in Africa, Asia Pacific 6%
Latin America
and North America expect to 6%
have as few as 1-25 bilateral Middle East
Western Europe 18%
roaming partners in the next 38%
three years, showing the extent of
consolidation of roaming partners North America
17%
as LTE networks are launched.
Operators in the Middle East Asia Pacific
21%
expect to have the highest number
of LTE roaming partners in three n= 146 (mobile operators, MVNOs, global carriers & roaming hubs)
Source: Informa Telecoms & Media
years, at 51-100, a reflection of the
number of bilateral agreements
they currently have in conjunction relationships with partners to tap need to evaluate how LTE sits in
with an apparent disinclination to the region’s rising significance from relation to their in-market portfolio
move toward hubbing solutions a roaming perspective. of services.
to consolidate the number of
interconnections. LTE roaming challenges Following on from this, there
On the one hand, the LTE are even more implementation
From a global perspective, Western roaming opportunity is clear and and technical challenges for the
Europe will still be the main priority straightforward: LTE roaming operator to overcome with LTE
roaming destination for operators offers operators considerable roaming than there are with
for the next 12 months as they roll opportunities to offer new roaming in-market LTE services: How do my
out LTE (see fig. 12). Asia Pacific services and replicate the home existing roaming agreements sit
and North America will also be LTE-user experience for users when within my LTE roaming strategy?
important roaming destinations they travel. But on the other hand, Do I strike new LTE roaming
for operators, reflecting the LTE roaming presents considerable agreements or do I extend my
ongoing importance of traditional challenges, and on every level: existing agreements into LTE?
roaming routes and the continuing From a broad strategic perspective, Which of the enhanced technical
emergence of Asia as a travel operators first need to assess capabilities of LTE can I use
destination. The growing importance how they are going to position LTE most effectively in the roaming
of Asia represents an opportunity roaming in the context of their context? How do I monetize these
for operators to strike roaming other roaming services, just as they capabilities?
© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com 10Fig. 13: The top three challenges for LTE roaming Diameter signaling is an important
element for the operation of LTE
networks as it interfaces between
1 Inter-standard roaming
the policy engine (PCRF) and
the customer databases (HLR,
HSS) for subscriber-mobility
2 LTE steering of roaming
management and QoS policy.
SIP signaling is also expected
to become more important as
3 International and domestic signaling storm
operators start deploying VoLTE
and RCS services. Session Border
n = 305 Controllers (SBCs) are considered
Source: Informa Telecoms & Media
to be pivotal components to
enable this functionality. Each
While spectrum fragmentation countries, fragmentation remains of these elements combine to
and handset availability are a major problem. The dangers of create complexity and challenges
major challenges, the survey fragmented spectrum are already to monetizing the growing use of
respondents, from a global looming, with Informa research roaming.
perspective, indicate that the top identifying 11 spectrum bands being
three challenges for LTE roaming used for LTE, making it difficult Informa expects Diameter
are: inter-standard roaming: for vendors and manufacturers deployments to both increase in
LTE steering of roaming: and to facilitate global roaming and number and evolve (in terms of
an anticipated international and achieve economies of scale on technology, deployment type, etc.)
domestic signaling storm (see fig. equipment. as the first wave of LTE network
13). deployments is completed.
Operator strategies for Over and above enabling LTE
The rollout of LTE networks selecting roaming vendors roaming, advanced functionality
is likely to have an impact on Given the considerable technical from Diameter components,
operators’ steering-of-roaming and strategic challenges to Diameter protocol normalization,
agreements because 3G data implementing LTE roaming, interoperability with legacy 2G/3G
users may roam onto 4G networks, operators need to carefully assess networks, and QoS policy are all
even if they are not part of their roaming vendor partners to expected to be considered during
the preferred list of networks. be in a position to maximize the 2013. Given the fact that operators
Therefore, ensuring that preferred full potential of offering enhanced are also pushing towards online
networks are roamed onto when data roaming to their subscribers. and real-time charging, Informa
subscribers travel within range This decision is surrounded by expects Diameter signaling to
of LTE networks that aren’t an extremely dynamic range of become a more important topic
part of an operator’s preferred- market realities, both technical during this year.
partner network will be crucial and strategic, as well as possible
to ensure roaming revenues as future scenarios, including how Moreover, the rollout of LTE
more operators roll out their LTE much data travelers use currently services – primarily VoLTE – is
networks. compared with how much they are expected to drive signaling
likely to use as operators’ roaming volumes even higher, increasing
Spectrum fragmentation is another strategies evolve in relation to the need for operators to assess
challenge the roaming industry travel patterns, regulation and the Diameter infrastructure
has to deal with. While regulators evolving service strategies. What capabilities of potential roaming
within regions and between regions makes an operator’s decision about vendors. As operators plan their
can help create a healthy LTE its roaming vendor even more LTE roaming strategies, they
ecosystem by working together of a challenge is the uncertainty are taking advice from Diameter
to identify spectrum that is as surrounding how these factors will specialists about dedicated
harmonized as possible between develop. signaling components rather
© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com 11than adding an extra layer of help enhance subscribers’ roaming • Ensure that the vendor can
functionality provided with other experience. support CSFB signalling.
network elements (e.g., PCRF,
HSS). Diameter is often considered Another key approach to minimizing These requirements are borne
to be a critical protocol for the this complexity will be to reduce out by Informa’s survey, which
operation of an LTE network and the number of roaming agreements indicates that a roaming vendor’s
recent outages in 3G roaming operators have as they strike their LTE roaming footprint and
have provided adequate proof that LTE roaming agreements. Making expertise are the most important
dedicated elements for Diameter new agreements for LTE roaming factors when operators make the
load balancing are necessary. offers operators the chance to decision to select a service provider
migrate or consolidate their current (see fig. 14). A significant minority,
This enhanced technical capability, bilateral or hubbing roaming 25%, said that IPX reach will be the
while adding complexity, provides agreements to a new platform with primary driver.
significant opportunities for a new or existing roaming provider.
operators to monetize current and As already discussed, roaming
new roaming traffic more efficiently As they assess roaming partners hubs are an option for operators to
and effectively. for LTE in the context of their potentially reduce the increasingly
overall roaming strategy evolution, complicated roaming ecosystem.
There remains a lot of scope for operators will need to: They are designed to expedite
operators to improve the roaming • Offer QoS within the LTE roaming and simplify the formation of new
customer experience of existing context to harness the benefits of roaming partnerships by acting
services. While operators have LTE. as a convergence point for all the
complete visibility of customer • Ensure that the scope of the roaming agreements of those
usage on their own networks, they vendor’s roaming footprint meets operators attached to it. Joining a
cannot build a complete near-real- their current and likely future hub can benefit mobile operators in
time view of customers’ usage while requirements. two main ways: it lowers the cost
roaming. This is further complicated • Assess the robustness of the to an operator of offering roaming
in scenarios where customers can signaling experience the vendor services; and it produces new
access multiple networks when offers. revenues through new traffic with
they roam because of the number • Assess the capability to offer new partners and through offering
of network-sharing agreements carrier-grade Diameter signaling. new services.
between operators. When choosing • Ensure that the vendor can offer
their roaming partner, operators seamless reporting, monitoring While bilateral roaming
should consider how far vendors and trouble-shooting across interconnections will still play
can offer usage-based insights to 2G-3G-4G. an important role, the added
complexity that LTE roaming
Fig. 14: What would be the primary driver for you to select a LTE roaming brings can be expected to lead
service provider? (please select one option) operators to look more and more
to hubs to reduce it. Among the
Other (please specify)
6%
Current GRX provider survey respondents that were
13%
from roaming and wholesale
departments, 40% are “likely” or
“very likely” to outsource their
LTE roaming on-net footprint
31% IPX reach Diameter signaling function, while
25% 25% are still uncertain (see fig. 15).
IP eXchange (IPX) is a GSMA-
Roaming expertise
26% defined industry-standard IP-based
interconnection technology. It
n=110 (mobile operators, international wholesale carriers) provides a number of advantages for
Source: Informa Telecoms & Media
roaming service providers based on
© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com 12improved interconnect and transit Fig. 15: Do you plan (“what is your willingness”) to outsource your
as well as improving the richness diameter signaling network function (e.g., DEA) for international roaming
to your IPX provider? (please select one option)
and experience of data roaming.
IPX provides a consistent and Yes – very likely
15%
robust route to improved roaming Don’t know yet
25%
interconnect, particularly with data
roaming.
IPX can help operators offer an Yes – likely
25%
enhanced data-roaming experience No – unlikely
that can be managed from end to 35%
end and manipulated in real time,
which is useful for providing specific n=14 (roaming and wholesale departments)
Source: Informa Telecoms & Media
data-roaming services requiring
particular attributes (e.g., consistent
connectivity, high bandwidth, low Fig. 16: Which of the following are the most important services that your
latency), and it is future-proofed for IPX provider needs to offer as part of the basic LTE roaming service?
(please rank your top three)
data-roaming services because it
uses an all-IP core. Top 1 Top 2 Top 3
Roaming data clearing
It will be crucial that IPX providers (data, VoLTE)
Roaming Ffinancial settlement
provide a solid platform for (data, VoLTE)
operators to be able to monetize LTE roaming operational testing
and management services
IPX-based data roaming. The
LTE roaming hub
survey respondents chose roaming
LTE steering of roaming
data clearing, roaming financial
settlement (data, VoLTE), LTE- LTE hosted DRA/DEA
hosted DRA/DEA and roaming hub 0 10 20 30 40 50 60
as the most important services an Responses (%)
IPX provider needs to offer (see n = 110 (mobile operators, international wholesale carriers)
Source: Informa Telecoms & Media
fig. 16).
Conclusions
The global mobile roaming market approaches, many mobile users gradual approaches to reducing
is at a critical juncture in its either restrain their mobile use prices. Although there is a gradual
history. It presents operators with while traveling or turn off their shift in the users’ perceptions
many new opportunities but also phones when they begin their about how much roaming services
many new challenges. holiday: The fallout from charging cost, their perceptions that the
extremely high roaming prices in cost of roaming is prohibitively
Operators are re-assessing how the past has caused consumers to high persist. This is the case
they approach roaming pricing at continue to be extremely cautious even in the EU, where focused
the same time as launching new and wary about using roaming regulation at the wholesale and
services to encourage profitable services. retail levels has led to roaming
mobile usage by as many of rates priced at a mild premium to
their customers that travel as Operators are addressing this home-market rates, a premium
possible. But, as a result of legacy “anti-roaming” mindset with which is set to all but disappear
© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com 13next year if the new proposed that the operators risk missing the consumers while retaining
regulation comes into effect. opportunity of a potential retail enterprise roaming revenues
roaming user base that remains, against the encroachment to both
In regions without regulation to a large degree, untapped. from OTT and Wi-Fi players?
to bring down retail roaming
rates, roaming revenues are still The advent of LTE roaming The outlook is extremely
predominantly generated from offers operators the chance encouraging for the mobile
enterprise users. Because of this, to re-evaluate their roaming roaming industry. Data-roaming
operators in these regions, like strategies. Can they significantly usage is expected to grow by more
those in Europe before regulation increase roaming usage with than 40% annually, representing
began, face the conundrum of how new tariffs that encourage usage a significant opportunity for
to lower retail roaming rates to across the board? Can they reduce operators to tap new monetization
encourage very price-sensitive roaming-related costs as they opportunities if they can position
consumer usage without reducing launch LTE and collapse existing themselves to take advantage
prices for enterprise users, whose agreements into new ones? Can of this increase by replicating
usage patterns are less price- they exploit the capabilities of LTE successful in-market data
sensitive. to tap new usage scenarios and strategies in the roaming context.
new users? Can they encourage
Operators in Europe answered this existing roamers not to switch off Given that bill shock remains one
conundrum by resisting for as long roaming when they travel and seek of the most significant barriers
as possible lowering retail rates out the nearest Wi-Fi hot spot? to data roaming, operators must
by a sufficient amount to cause a closely assess how they can
significant increase in consumer LTE roaming offers operators effectively deploy tools to ensure
usage because they wanted to the potential to exert more transparency on usage to drive
maintain high enterprise roaming control over the overall roaming traffic. Some operators, such as
rates. Eventually, regulation experience and bring it more in France Telecom and Deutsche
forced their hand. line with the data experience in the Telekom, have already deployed
home market. Diameter signaling data-usage applications to
It is, however, questionable for LTE roaming will play a major overcome end-user fears about
whether operators in other role in terms of enablement and roaming bill shock and operators
regions, in today’s mobile market, monetization, especially with the should learn from these early
will able to replicate this strategy. implementation of online charging deployments how to offer similar
in national and international usage monitors to their customers
Why? It is mainly because markets. to offer more transparency.
operators – in all regions – face a
major threat to roaming revenues As we’ve seen, the technical Earlier in this paper, the following
from OTT and Wi-Fi substitutes. challenges to LTE roaming are questions were posed: How do my
These players are succeeding in not inconsiderable. From a high- existing roaming agreements sit
capturing a high volume of voice level perspective, we have argued within my LTE roaming strategy?
and data roaming, and driving the that operators must choose their Do I strike new LTE roaming
so-called “consumerization” of roaming partners with a view to agreements or do I extend my
enterprise mobile use. The threat maximizing their current roaming existing agreements into LTE?
from these players is pressing capabilities while evolving them Which of the enhanced technical
enough that they pose a very real most effectively into the next capabilities of LTE can I use
danger to operators’ enterprise generation. most effectively in the roaming
roaming revenues – not just their context? How do I monetize these
consumer roaming revenues. The other major challenge that capabilities? This paper aims if not
Moreover, it’s not just that OTT operators face is strategic. to have definitively answered these
and Wi-Fi players pose a major This can be boiled down to the questions then to have provided an
threat to operators’ enterprise following: How can operators incisive framework within which to
and consumer revenue – it’s also encourage roaming use among address them.
© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com 14Recommendations
1. Operators should ensure they have the technical capability to offer a good quality-of-service (QoS) to
roaming end users to maximize the quality of their LTE roaming experience: LTE roamers, especially
enterprise roamers, will expect their in-market LTE experience to be replicated when they travel. Ensuring
LTE data speeds and robustness of delivery will be essential for operators to position LTE roaming as a
premium experience – especially to the enterprise market where critical applications will be accessed over
LTE. Operators need to ensure their roaming vendor partners can offer a robust network with scalable reach
to meet their key roaming requirements. According to Informa’s survey, video calling and social networking
will help driving LTE data roaming use, both of which require good QoS support to maximize the quality of the
users’ experience.
2. Operators should approach LTE roaming with a view to monetizing as much data-roaming traffic as
possible: The availability of free Wi-Fi means users, especially consumers, often prefer a lower quality-
of-experience (QoE) at no cost to a premium experience. It is essential that operators can ensure steering
of roaming. This will minimize any roaming revenue leakage that results from the increased complexity of
keeping subscribers on preferred networks as the LTE network rollouts will have an impact on preferential
roaming agreements. Operators should look to partnerships to be able to capture as much roaming data use
as possible by meeting end-user expectations on QoE in the context of how much they are paying for it.
3. Operators should invest in improving tools to offer more transparency in roaming usage: Bill shock is
still the main barrier for data-roaming usage and it will be a major boundary for LTE roaming. Smartphone
applications need to evolve to provide accurate and real-time information about usage and be integrated
across other operator channels such as the Internet and the contact center.
4. Inter-working and inter-operability capabilities are essential to offering a robust roaming quality of
experience: Legacy roaming expertise is paramount to enable operators to handle roaming traffic traveling
across different technology standards and over equipment from different vendors.
5. Operators need to partner with vendors that have a significant and scalable IPX reach from the physical
layer to the application layer: With the potential amount of data generated via LTE roaming, in particular at
peak times (the so-called “signaling storm”), operators need to make sure the IPX infrastructure for roaming
can handle unexpected spikes in traffic and also have the scale to handle long-term growth in signaling
traffic.
6. Operators should consider partners with established experience of mission-critical applications and with
a carrier-grade solution on the Diameter-signaling network function: As the mobile industry prepares for
the advent of a signaling storm, Diameter entities in the IPX carrier vendor’s network will play an increasingly
critical role in mitigating the risks posed. Operators should select a roaming vendor with a global carrier-
class IPX network and Diameter function infrastructure, coupled with a proven track record in global roaming.
© 2013 Informa UK Ltd. All rights reserved. www.informatandm.com 15YOUR GLOBAL RESEARCH PARTNER
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Tata Communications is a leading global provider of a new world of communications. The Tata Global Network
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