Beltug

BELTUG/INTUG Position Paper - The Dysfunctional Market of International Mobile Services for MNCs


To the BELTUG/INTUG Position Paper

It is clear that the mobile revolution is happening. Yet mobility projects are being put on hold. The uncertainty of mobile data roaming prices and the difficulties of handling mobile communication smoothly on an international level are putting the brakes on innovation.

“We don’t roll out mobile applications for our service engineers on the road. In the US we do, here we use paper.” - An industry customer

But within the next five years, we will see a big shift, moving towards much more added value in mobile communications within companies. The cloud app world will be an integral part of this, so mobile service providers will need a lot of expertise. INTUG believes it will no longer be possible to work on innovation country by country. A truly international approach and market for mobile services is crucial.

Managing and supporting international mobile communications is increasingly complex. Some of the challenges business users face include: managing complex relationships with mobile service providers; supporting an ever-expanding range and number of mobile devices; ensuring security of access to data applications; controlling rising expenditure from mobile data applications, especially when roaming; checking hundreds of bills and allocating costs back to departments or end users; and ensuring continuity of connectivity and service quality in the face of unpredictable and unknown service operator practices.

MNCs are very unhappy with current international mobile service offerings. The international market remains a fragmented patchwork of national mobile services

International service providers today piece together national offerings, using various forms of partnerships ranging from full subsidiaries and investment holdings to looser alliances. The level of control in such partnerships differs, resulting in country-to-country variations in service, products and pricing. Offerings become virtual arrangements to help customers deal with national operating companies and their service/support structures. Whilst such arrangements do align some contractual terms and conditions, and can help customers gain a better view of their international mobile spend, they do not represent the true, competitive, one-stop shopping that international companies seek today.

International services are still merely offered as a layer on top of national services. But there is no reason why international service providers must continue to define their MNC offerings based simply on the ‘lowest common denominator’ of what they can get a co-marketing partner in a country where they have no presence to agree to. This is not what MNCs expect, and puts too much ‘national flavour’ in the offers.

Some operators with international reach recognise the needs of the business user, but their actions - such as establishing account management teams - do not go far enough.  MNCs work internationally, and expect mobile suppliers to be organised to offer:

for a maximum of countries worldwide.  A seamless, borderless proposition is needed.

Lack of awareness is blocking a truly international market

We see a lack of competition, which must be addressed by regulations. We see inconsistent tariff structures, with prices that are too hard to compare. We see fragmented pricing and service models. We see that the national units of an international operator are most concerned about their own P&L. Most MNCs faced with this environment admit defeat and rely on national arrangements. Several have told INTUG that they stopped trying to use an international approach and went back to national contracts, negotiating country by country.

“After trying to have an international strategy for our mobile communications, we had such bad experiences that we went back to a country-by-country approach.” – An international customer

Benefits for operators, MNCs and regulators

Yet a truly international approach to services for business users would offer a host of benefits for all the players – and even for the mass market consumer. The MNC is more than just a collection of SIM cards, and can offer a much greater profit opportunity than operators currently perceive. They are willing to pay for ‘added value’; while reducing outrageous costs for services like roaming and mobile termination would encourage greater usage, thereby generating greater revenues for the operators.

While the market for the MNC segment is definitely ‘dysfunctional’, this need not remain the case. Operators, MNCs and regulators can all take part in turning this market into a win-win proposition that benefits every stakeholder. INTUG’s goal is not just to allow quick-hit savings, but rather to facilitate long-term control and optimised mobile use.

It is not too late, but action must be taken.