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Wed 17 Jun 2009 03:03 PM

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Right to roam

For postpaid and prepaid mobile users alike, roaming in the Middle East is often a cause of much frustration.

For postpaid and prepaid mobile users alike, roaming in the Middle East is often a cause of much frustration, with costly roaming charges – and a lack of awareness of those charges – among the main sources of annoyance.Indeed, most roaming prepaid mobile users have probably found themselves stranded without any credit while on a short trip to another country in the region, with just a few incoming calls often enough to drain a healthy credit balance.

For prepaid users, this frustration is more likely to be delayed until the next bill arrives, informing the hapless subscriber of the roaming charges they have racked up.

In both cases, costly roaming charges are likely to deter mobile users from making or accepting all but the most important calls while in another country. Such charges could also feed discontent among subscribers, leading to churn.

But it appears that operators in the region are becoming more aware of the problem, with a number of recent developments from operators who appear keen to adopt simpler and cheaper roaming tariffs.

For example, earlier this month, UAE operator Du introduced a flat fee for all incoming calls for users roaming outside the UAE. Under the new roaming tariff, all of Du’s prepaid and postpaid customers roaming abroad will pay a flat rate of AED1.25 ($0.34) per minute for incoming calls.

Bahraini incumbent Batelco recently launched an expanded data roaming network covering all GCC states and a number of other countries in Middle East. Crucially, Batelco said its mobile postpaid customers would pay the local Bahrain rates for high speed data access while roaming in Saudi Arabia, UAE, Qatar, Kuwait, Oman, Egypt, Jordan and Yemen.

Zain meanwhile continued to expand its One Network offering, which allows users to roam at local calling rates across more than 20 countries. The company recently added 3G data services to the network, allowing users to access high speed data at local rates in most of the countries where it has a presence.

But while higher end customers might be benefiting from cheaper roaming data, 2G subscribers with most networks in the region still have to navigate a roaming system that is costly and often confusing.

As with international calls, which remain expensive in much of the Middle East compared with international standards, roaming charges are a significant revenue driver for many operators.

But amid a trend of falling roaming revenues globally, operators in the region might be better advised to offer their customers improved roaming services – meaning cheaper rates and simplified tariffs – in a bid to reduce customer churn and increase roaming use.

George Held, director of products and innovation, Zain, told CommsMEA that while the company lost “significant” revenue by offering local rates to its roaming users under One Network, it expects to more than recoup this revenue through improved customer retention (more here).

Similar ideas also appear to be gaining traction in more developed markets. The UK’s leading mobile operator, Vodafone, announced in May that it would suspend roaming charges for its subscribers who travel to various European countries during the summer and will instead charge local rates.

But it is likely to take much longer for mobile users in many other Gulf countries to benefit from such schemes, with many operators opting for a more short term approach to maintaining revenue streams.

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