Helping telcos hit the ground running

Mathias Prussing
22 Nov 2010

Establishing bilateral roaming agreements with every operator a telco wants in its footprint is costly and resource-intensive. An operator has to negotiate each deal on a relationship-by-relationship basis and may end up with thousands of roaming agreements and a mesh of signaling connections.

Each time a new technology, such as GPRS/3G/data, is introduced, more resource-intensive tasks must be carried out with each existing roaming partner. The administrative and operational costs add up as each new destination has to be tested and implemented.

All this makes the bilateral method of achieving a roaming footprint no longer viable. Moving to a hub or exchange model is now the accepted way for smaller operators to grow fast. Through a single agreement and an almost plug-and-play solution an operator can have many roaming partners from the outset of operations. The benefits also can stretch to the bigger players.

By outsourcing their less important roaming destinations to a hub, major operators can focus on the most profitable, high traffic roaming destinations and cut operational costs.

"The principle drivers for operators to join hubs is to reduce opex and capex, to fill in gaps in coverage and form part of a broader outsourcing strategy," Informa's Paul Lambert said in a recent report on the topic.

For small operators and new entrants, he said hubs may potentially facilitate prepaid and data roaming easier than bilateral relationships.

He pointed out two key challenges. "One is operational ?getting roaming connections in place as easily and as quickly as possible; the other is financial ?increasing roaming revenues, or stemming their decline at the very least. The big opportunity for hubbing providers is to show operators that they can easily and quickly connect their customers onto hubs so that they can grow their roaming revenues."

In some cases hubbing services are being provided by mobile operators themselves, and some hubbing providers are even establishing peering agreements with other hub providers so that when an operator signs a relation with one hub provider, it effectively establishes an agreement with two and gains a roaming footprint the size of both roaming hub providers' communities combined.

An Informa report on mobile roaming notes that 472 operators signed up to hubs, equivalent to 61% of the total number of network operators worldwide."

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