Over a quarter (26%) of European mobile operators have witnessed an increase in fraud since mobile roaming charges were abolished throughout the European Union, according to a new report published today by Mobileum on the eve of MWC Americas.
A market leader in analytics solutions for telecoms, Mobileum conducted the research to investigate how EU Regulation IV has affected European operators in the European Union after mobile roaming charges were abolished throughout the EU from 15th June 2017.
Almost all respondents (87%) also reported a strong or very strong increase in data traffic, while 71% of operators highlighted an increase in voice traffic. However, responses on SMS usage were split, with half of respondents saying there was no change. Meanwhile, over three quarters (76%) of those surveyed said they did not believe there was compensating revenue to make up for the increases in traffic volumes.
Tim Moran, Senior Vice President of Product and Offering at Mobileum, commented: “It is still very early stages, but our research highlights that investigations into fraud and abuse in the context of the new regulations are not being flagged. The generous fair usage policy means it is becoming far more difficult to watch for fraud and abuse. We expect fraudsters to be monitoring what loopholes have appeared and how they can be exploited. Given the arbitrage between wholesale interconnect rates for international calls terminating to EU vs. low retail tariffs for regulated calls in some EU markets, we may very well surge in frauds related to CLI filing and international SIM Boxes.”
The significant increase in traffic revealed by the research since applicability of EU RLAH confirms forecasts made pre-implementation and aligns with how several plans are now being sold in countries across the EU. However, some operators have called for a potential increase in rates to compensate for the increased costs.
Tim said: “We can see that a lot of operators see no additional revenue to make up for the additional traffic that is being carried. The EU commission stated that domestic retail rates shouldn’t rise to make up for this additional cost, but there are some reports of this happening in some EU countries. The temptation for operators is to add the increased costs to their plans once EU Regulation IV has had further time to bed in. It will be interesting to review the interim report due to be published by the EU Commission in December 2018 on the effects of the new roaming rules in terms of if these costs have indeed been moved to retail plans.”
Mobileum’s research also indicated that some of the operators believe that existing IT systems are not copying well with changes required for EU Reg IV. While operators may have implemented fair usage policy for open data bundles, they are finding detection and action on permanent roamers to be really complex in nature
Tim added: “Operators should implement measure to detect permanent roamers and apply roaming surcharges to make up for loss of roaming revenue to some extent. However, for the long term operators really need to focus on innovative roaming bundles for international roamers. Understanding customers via analytics, segmentation and dynamic/spot pricing is the key to grow roaming revenues.”