Covid-19: Mobile operators face $90M implosion in roaming revenue
- 01 April, 2020 09:45
New Zealand's three mobile network operators are facing the loss of most if not all of their international roaming revenue as a result of global pandemic travel shutdowns.
According to Commerce Commission figures (spreadsheet here), international roaming delivered $90.7 million in revenue to Spark, Vodafone NZ and 2degrees, but with international travel reducing to close to zero that is likely plummet.
A further $23.3 million comes from overseas visitors roaming in New Zealand.
"While it’s not yet clear what the impacts of Covid-19 on Vodafone NZ’s business will be, international travel is reducing to essentially zero so it’s inevitable this will impact roaming revenue from both an inbound and outbound perspective," a Vodafone spokesperson told Reseller News.
"Thankfully Aotearoa almost got through the summer peak of international tourists travelling here, but the roaming revenue impact will depend on how long travel restrictions are in place."
Telcos are very coy about their roaming revenues, but a rough calculation using that $90 million figure and applying market share numbers indicated Spark (including its Skinny brand) could lose up to $37 million a year, depending on how long and how deep ongoing travel restrictions are.
“We don’t report our roaming revenues separately, but as you would expect they have been impacted as travel restrictions have been put in place," a Spark spokesperson said.
"We will continue to assess the impact of Covid-19 on our operations and adapt accordingly.”
Vodafone NZ, now owned by Infratil, faces an annual loss of up to $32.4 million while 2degrees faces up to $20.7 million.
However, indications are that use of both voice and data networks has skyrocketed during the lockdown, potentially delivering some additional revenue that could offset roaming losses.
"We’re managing significant extra demands on our voice and data networks, increasing by 20-70 per cent usual levels," Vodafone said.
Home broadband data was up 32 per cent while mobile data has risen 20 per cent on average.
Most of those increases were happening on unlimited plans, however, and telcos can also face additional costs from sustained extra demand.
UK analyst firm Juniper Research last week calculated global losses of roaming revenue could top U.S.$25 billion over the next three quarters in a "high impact" scenario.
"Juniper Research anticipates that the majority of travel that would have likely occurred had it not been for Coronavirus is unlikely to be rebooked," it said.
"As a result, Juniper Research believes that the missed roaming revenue should be considered lost revenue, rather than a shortfall in income that can be recovered at other points during the year."