Telcos focus on international roaming plans to retain high-end users

As telcos struggle to hold on to customers, and spend increasingly more to acquire new ones, international roaming services have become important in customer retention, especially for the high-paying postpaid users, say industry executives and analysts. Given the increase in international travel post the pandemic, international roaming services are back in demand, and operators are doing their best to use them to drive customer stickiness, they added.

"International roaming revenues do not contribute significantly to overall revenues - maybe in the low single digits. However, the service itself has an intangible and indirect impact in that it helps retain higher paying customers (who are most likely to use international roaming packs during travel)," said Rohan Dhamija of Analysys Mason.

International roaming revenues are estimated at around 3% of the total income, driven mainly by postpaid customers.

At a time when customer churn is a menace facing all three telcos, services like this help retain customers. The churn has almost doubled in the last two years, which has resulted in the likes of Vodafone Idea (Vi), Bharti Airtel and Reliance Jio seeing sharp jumps in SG&A (selling, general & administrative) expenses in the September quarter as they strive to hold on to customers and poach new ones from rivals.

Airtel, Vi and Jio's monthly customer churn - or percentage of users leaving the network - has risen from 2.2%, 2% and 0.46% in the June quarter, FY21, to 3.3%, 4.3% and 2%, respectively in the September quarter, FY23, in the aftermath of tariff hikes taken a year back.

According to the latest Trai subscription data, Vi lost as many as 4 million subscribers in September 2022, as opposed to Airtel and Jio that gained 400,000 and 700,000 odd customers, respectively.

"The way to look at this is that people who had a second SIM with a Vi connection are doing away with it. For Vi, it would be important to push services like international roaming packs, which will, maybe, help it retain some customers at least," said an analyst with a research firm.

While Airtel and Jio did not respond to queries sent by ET, Vi said that it has seen significant uptake in international roaming pack consumption since October 2021.

"As per our IR usage trends, popular foreign destinations are - UAE, UK, USA, Thailand, Singapore and Turkey. We have also seen increased traffic to some of the other European countries such as France, Italy, Germany, Spain, Netherlands, as well as countries like Indonesia, Saudi Arabia and Malaysia," it said in an emailed response.