Industries:  Telecom 

"One Europe One SIM" - Can enterprises transform their mobility strategy from local to regional?

By: Ashwin S
Senior Research Analyst

31 Mar 2014

Problem Statement: Enterprises currently have to engage with individual operators in every country of Europe for their mobility requirements-main reason being limited coverage of operators. Not only does this evade the cost savings due to volume bundling in a single contract but also causes an increase in roaming charges arising out of users travelling to other nations. Since roaming bill shock can be of the order of EUR 1,000 per employee, enterprises always consider engaging with separate vendor for roaming services alone. This again leads to an increase in the number of contracts handled. Solution: European telecom market consolidation has been made theoretically made possible in the past by the formation of alliances and marketed towards enterprises purely based on the cost saving opportunities it could provide. With recent regulation in EU on forming a single telecom market for entire EU has made possible the realization of the so far theoretical cost savings. Moreover, by eliminating borders between nations, EU plans to do away with the conventional premium charges on roaming and inter-operator costs like Interconnection fees and Mobile Termination Fees. This white paper will throw light on how much each of the above mentioned factors impact enterprises and the level of cost savings that could be achieved by making use of the shifts in industry dynamics brought forth by these regulations. Introduction European telecom sector is currently reeling under stagnant growth rates due to macro-economic conditions due to which countries like Spain have witnessed a decrease in adoption of mobility, a phenomenon never seen before in any telecom market. Moreover, more than 50% of Europe`s business users prevent usage of their mobile data while travelling to other EU countries while around 28% of these users switch off their phone while on roaming. Major cause for this trend is the additional premium that enterprises have to pay for roaming charges in their non-native EU country. Operators have found that this leads to a churn of 300 subscribers annually as enterprises switch to substitutes like international calling cards.

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