SADC Roaming update

There are approximately 5.6m mobile roaming* users in Africa (or 1.3% of the subscriber base) – this is low when compared to 15% in the USA or 17% in Europe. The case for the Southern African Development Community (SADC) is only slightly healthier – of the 125m subscriber in 15 member countries, 3.1m roam (2.8%) – the assumption is that is around 4% of the operator revenues.

High roaming costs are not normally under the control of the subscribers’ mobile provider – the retail tariff is largely determined by the IOT (Inter Operator Tariff) which is normally around 80% of the tariff, with the subscribers network applying a 25% mark-up. Using some global benchmarks, the roaming call tariff could be as low as R1.47 per minute, if costs are deemed as 72c for origination, 35c for transit and 40c for termination. South African roaming users pay anywhere between R6 (very limited) and R38 per minute, dependent on network provider and country of roaming. Fortunately the rates for SADC states are lower than European rates (typically R23pm) at around R8pm. More terrifying however is the fact that South African subscribers mobile data roaming costs are typically R108 -128 per MB – 10x those of European data roaming rates, and country independent.

There is however much room to reduce these costs or eliminate roaming costs entirely, as was done in 2007 by Celtel (now Airtel) in 3 East African countries. More recently, multiple network operators have collaborated in these countries (MTN Uganda, Safaricom Kenya and Vodacom Tanzania) to offer an alternative –this is probably due to the fact that the networks witnessed a 7x increase in roaming subscribers! Data rates of around R10 (€1) per MB should easily be achievable

Whilst users may choose “Plastic” roaming (use of multiple country SIM cards), RICA type regulations realistically hamper this. Voice gateway regulation/signalling standards also hamper operator infrastructure harmonisation, but the worst arguments for SADC are i) a need for a cross regional regulatory body or ii) that all operators are required to sign up. It only takes one operator per country to put their hand up to promote something similar in SADC. Whether they are permitted to by the government (who enjoy taxing the profits they make) is another country specific issue.

Alternatively in the short term, the recommendations may be to

i) dramatically reduce roaming tariffs to negate the need for SADC tariff regulation which is very unlikely in the foreseeable future,

ii) provide consumers greater tariff transparency to limit “bill shock”, or

iii) for consumers to raise their voice lobby for a lower cost of voice/data!

Chat to us about voice & data roaming – we are working on innovative solutions that exist around the globe to hopefully bring relief to SADC subscribers.

Alternatively you can wait for regulators and operators to make the move – but you will wait a long time.

*Roaming in this post refers to “Away” roaming between various countries operators as opposed to “Home” roaming which is between local network operators within the subscribers country of residence.

Advertisements


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s