INTUG Publishes Paper on Dysfunctional Mobile Market

INTUG just published a new position paper on the shortcomings of the international market for mobile services. The publication is intended as a call to action for regulators, multinational customers (MNCs) and mobile operators. A truly international approach to services for business users would offer a host of benefits for all players – and even for the mass market consumer.

In fact there is no such thing as an international market for mobile services. But whereas in big parts of the world roaming is a non-issue, in Europe it is a barrier to innovation. Some multinational customers even put their mobile computing projects in Europe on hold due to the uncertainty of mobile data roaming rates and the hurdles their users encounter after crossing borders within the EU.

As a representative of an MNC put it:

“We don’t roll out mobile applications for our service engineers on the road [in Europe]. In the US we do, here we use paper.”

International service providers today piece together national offerings, using various forms of partnerships ranging from full subsidiaries and investment holdings to looser alliances. The level of control in such partnerships differs, resulting in country-to-country variations in service, products and pricing.

This way, offerings become virtual arrangements to help customers deal with national operating companies and their service/support structures.

While such arrangements do align some contractual terms and conditions, and can help customers gain a better view of their international mobile spend, they do not represent the true, competitive, one-stop shopping that international companies seek today.

International services are still merely offered as a layer on top of national services. But there is no reason why international service providers must continue to define their MNC offerings based simply on the "lowest common denominator" of what they can get a co-marketing partner in a country where they have no presence to agree to. This is not what MNCs expect, and puts too much "national flavor" in the offers.

Some operators with international reach recognize the needs of the business user, but their actions – such as establishing account management teams – do not go far enough. MNCs work internationally, and expect mobile suppliers to offer a seamless, borderless proposition consisting of:

  • international contracts
  • single ordering and delivery points
  • a single support contact centre
  • a single billing centre
  • a homogenous tariff structure

INTUG sees a lack of competition, which must be addressed by regulations, and inconsistent tariff structures with prices that are too hard to compare. INTUG sees fragmented pricing and service models, and national units of international operators that are most concerned about their own P&L.

Most MNCs faced with this environment admit defeat and rely on national arrangements. Several have told INTUG that they stopped trying to use an international approach and went back to national contracts, negotiating country by country.

“After trying to have an international strategy for our mobile communications, we had such bad experiences that we went back to a country-by-country approach.” – An international customer

An MNC however is more than just a collection of SIM cards, and can offer a much greater profit opportunity than operators currently perceive. They are willing to pay for ‘added value’; while reducing outrageous costs for services like roaming and mobile termination would encourage greater usage, thereby generating greater revenues for the operators.

While the market for the MNC segment is definitely "dysfunctional," this need not remain the case. Operators, MNCs and regulators can all take part in turning this market into a win-win proposition that benefits every stakeholder. INTUG’s goal is not just to allow quick-hit savings, but rather to facilitate long-term control and optimized mobile use.

Source: INTUG

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