Bilateral versus Unilateral Roaming Relationships
Traditionally roaming is commercially settled based on bilateral roaming relationships between mobile network operators with the basic goal to enable the clients of one network Operator to use the services of another Operator according to the standards set out by the GSM Association. There’s a pre-commercial phase where an agreement is closed, the networks are typically connected using specialized IPX carriers, IT elements are implemented and tested, and when all is successfully completed, the commercial roaming can start.
While in most cases, roaming involves bi-lateral two-way roaming, in some cases, unilateral or one way roaming takes place either for technical or commercial reasons, think of MVNO’s. This approach and solution has made sense for a long time. With the rollout of hundreds of relationships gradually over time, retail roaming generated solid revenues and final net-cost was controllable given the relative balance between inbound (visitors in your network) and outbound traffic (your customers using others), with limited volumes globally.
Changing Environment for Roaming
This relative balance and status quo is rapidly changing, influenced by regulation and technological developments. This is not new. Twenty years ago, international voice was liberalized and stimulated by new (VoIP) technology and alternative routing options, and traffic exploded. The global wholesale market for voice changed from a bilateral market to a customer-driven trading market with competitive rates, high volumes and a diversity of suppliers offering different quality and choices to terminate voice calls globally.
Today, stimulated by Roam Like Home (RLH) regulation and unlimited data offers, the data explosion from smartphones is moving across borders and the rapid development in IoT will only push this trend upwards. The question is, which technology is going to support the competitiveness that is needed to further develop the (roaming) market in supporting the much more unbalanced international volumes from a myriad of IoT solutions in verticals such as Automotive, Wearables, Secure Access, Drones and other areas where data usage requires local access, globally.
It is expected that bilateral roaming will be there for some time to come. Rates for regional roaming will be heavily negotiated as volumes continue to grow significantly on either side, but how about the 80% of other destinations globally? One would question if the bilateral model is capable of keeping more than 600 bilateral roaming arrangements around the world competitive.
Consequences and Opportunities for IoT
For the IoT and travel markets we see special SIM cards with multiple operator identities available. These multi IMSI solutions can hold multiple identities which means it can combine several regional operators footprint to create a global coverage. However, one would question if this is sufficient and flexible enough. It may not be clear where a device is shipped, if it will end up in a country like Brazil where permanent roaming is not allowed. You might get lucky with a local profile on your special IoT multi IMSI SIM card, but it is not future proof, since these solutions only cover a few regions globally.
This is where a many things come together. Having local and regional relationships with mobile networks combined with the technical capabilities of a programmable eSIM solution are opening up the opportunity to use a local profile wherever a device is located. Once a device with an eSIM is detected in a particular area, a local profile can be added remotely and the eSIM can operate as a normal local or regional SIM card. By using the eUICC standard of the GSMA and by working with trusted partners for platform and IPX connectivity, maximum security can be guaranteed.
When looking at solutions for IoT using a roaming SIM, it is extremely relevant to know what kind of SIM is being used and whether the available technology is future proof to add the local profile that your business requires to stay competitive or to comply to local regulation.
There is also a major opportunity for roaming departments to support eSIM as traffic from IoT is incremental to their traditional bilateral roaming. The bulk of their roaming traffic is regional so besides monetizing on their own competitive regional footprint, a rationalization can take place for other areas where maintaining bilateral relationships is not sustainable long term. This is what happened in the voice market and eSIM technology enables roaming data to optimize in a similar way. It can open up the roaming market to a large community of IoT Solution Providers (IoTSP’s) supporting verticals with a need for global IoT coverage at local conditions.