Monday, 30 March 2020 01:34

Coronavirus could cost phone operators US$25 billion in lost roaming revenue, says analyst Featured

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The impact of the coronavirus pandemic could cost telecoms operators more than US$25 billion in lost revenue during the next nine months, with more than 650 million passenger trips to be cancelled due to the virus – accounting for over 80% of the anticipated international passenger trips that were previously forecast before the spread of the virus, according to one research firm.

Juniper Research examined two possible scenarios — a medium and high impact — and says it believes a low impact is now not possible, with the high impact scenario assuming that a severe disruption to international travel will continue for 9 months, with travel restrictions and a reduced demand for international travel continuing.

“In this case, the resulting impact on operators’ international roaming revenue would be significant,” says Juniper Research

The research assumes that over half of all roaming revenue for the year will be affected, amounting to US$25 billion in lost revenue, and also highlighted the period between June and August as of particular significance when the demand for international travel is high.

It forecast that operators could lose up to $12 billion in roaming revenue alone in those three months.

And in terms of the overall impact on operators, the research firm notes, however, that global roaming revenue only accounts for approximately 6% of total operator-billed revenue per year, limiting the hit on the industry.

“Given the nature of the international travel industry, the research anticipated that 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,” says Juniper Research.

Additionally, the research highlighted that travel cancelled due to the spread of Coronavirus is unlikely to be rebooked, and as a result, the loss of roaming revenue is unlikely to be recovered once the international travel industry resumes normal service.

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Peter Dinham

Peter Dinham - retired and is a "volunteer" writer for iTWire. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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