With international travel at a record low, roaming revenues are set to take a major hit
The increased network strain from nations working from home is not the only issue operators are having to deal with in the wake of the coronavirus pandemic. Now, a new study from Juniper Research is showing that drastically reduced international travel is going to cost operators up to $25 billion in roaming revenues.
The study modelled two possible outcomes related to international travel: medium and high impact. A low impact model was also considered, but was deemed impossible given the severity of the current crisis.
The high impact model assumes that major disruption to international travel will continue for the next nine months, based on regional travel bans and decreased demand. The study estimates that 650 million trips will be cancelled, representing 80% of anticipated travel during the period.
For the operators, this massive decrease in travellers would equate to a huge loss in roaming revenue, to the tune of $25 billion. The medium impact model is little better, still estimating a loss of around $20 billion.
The majority of these losses would be accrued during the summer months, when people would typically be heading abroad for some sun, sea, and sand; June and August alone could account for around $12 billion of the total losses.
Unfortunately for the operators, these roaming losses will be difficult to recoup – digital travel alternatives will not replace the roaming revenue and customers are unlikely to increase their travel proportionally after travel is deemed safe again.
“Given the nature of the international travel industry, the research anticipated there will be no strategies available to operators to mitigate this loss. It forecast that services, such as virtual conferencing, will offer businesses an alternative to international travel, but will offer no benefit to operators,” read the report.
The only saving grace for the operators is that roaming revenues only represent 6% of their annual revenue, so whilst these figures are enormous their impact will not be crippling.
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