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Axiata could drop roaming fees

Smart staff serve customers at their Aeon Mall branch in Phnom Penh yesterday.
Smart staff serve customers at their Aeon Mall branch in Phnom Penh yesterday. Eliah Lillis

Axiata could drop roaming fees

Axiata Group, the parent company of Cambodian telecom Smart Axiata, said yesterday that it would consider dropping international roaming within its network of mobile operators, which serves over 275 million subscribers in nine Asian countries.

“It is feasible to drop mobile roaming fees, at least within our footprint,” a company spokesperson said yesterday.

The company’s comments follow Viettel’s announcement last week that starting January 1 it would eliminate all roaming charges on cross-border calls made between its networks in Vietnam, Cambodia and Laos. The Vietnamese military-run telecom, which operates networks in 10 countries with a combined 100 million subscribers, projected that the loss of roaming revenue could cost the company $1 million a day.

Analysts said Viettel was likely hoping to offset some of these losses by making roaming more affordable, encouraging more subscribers to use its voice and data services while travelling.

Axiata, which since 2011 has offered local roaming rates within its network through bundles and promotional packages, said while roaming was not a core revenue generator for the company, its contribution was declining on the growing popularity of over-the-top (OTT) services such as Skype and WhatsApp.

“In recent years, mobile roaming has not been a significant revenue driver to the total business contribution and we are observing a natural decline or even stagnation in some markets,” the spokesperson said. “This is a global phenomenon and can also be attributed to the rise of OTT as the alternate mode of mobile communications.”

Marc Einstein, director of mobile and wireless communications Asia Pacific at Frost & Sullivan, said while roaming may not be a large source of revenue for telcos, it has some of the highest margins in the industry.

“International roaming has never been a big contributor to revenue, but it is an important contributor to profit,” he said, explaining that despite often high per minute roaming fees, the physical costs of connecting international voice and data calls are negligible.

For Axiata, the challenge of offering a local rate on all cross-border voice and data calls within its operator network, would be to convince subscribers who traditionally do not use roaming to turn it on – something the company’s cut-rate promotional offers have never convincingly succeeded in doing.

“The challenge we have is to attract the ‘silent roamers’, who make up a huge segment of the population, varying from 60 to 90 percent for some operators,” the spokesperson said. “If one is able to tap to this segment, then only will it be plausible to recover from the deep discounting we are experiencing today.”

Working against mobile network operators is the growing prevalence of free wifi access, especially in developed countries, which discourages customers from using mobile roaming, the spokesperson added.

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