Covid-19: Mobile operators to lose out on $25 billion in roaming revenue, according to Juniper Research analysis
New analysis carried out by Juniper Research has uncovered that the wider impact of the coronavirus outbreak on the international travel industry could see operators lose in excess of $25 billion in roaming revenue over the next nine months.
Juniper Research, a digital technology market forecasting, research and consultancy firm from Basingstoke, Hampshire, revealed its findings in a whitepaper titled Coronavirus: The Impact on Mobile Roaming for Operators.
Within the whitepaper, Juniper Research explore the outcomes of two potential scenarios, those being a medium impact and a high impact.
Under the high impact scenario, severe disruption to international travel would persist for a nine-month period, including restrictions on travel and a fall in the demand for international travel as a result. The resulting impact on international roaming revenue for operators would be substantial.
The research estimates in the high impact scenario that around 650 million passenger trips will be cancelled over a nine-month period, over 80 per cent of the anticipated number of international journeys that had been forecast to occur prior to the outbreak.
The loss in journeys from the June to August summer period will be of huge significance, since demand for international travel is usually at its highest. In these three months alone, the research forecasts loss of up to $12 billion in roaming revenue.
Overall, the research projects half of all roaming revenue for the year will be impacted, which amounts to the total of $25 billion in lost revenue.
Notably, however, Juniper’s research also points out that global roaming revenue accounts for only six per cent of the total operator-billed revenue annually, so the overall hit on the industry will be limited considering this.
Yet, this should not be taken as respite. Given the nature of the international travel industry, the research estimates that there will not be any means for operators to mitigate the losses they do incur. Services such as virtual video conferencing do offer businesses a viable alternative to travelling to international conferences and meetings, but this does not offer any benefit to operators.
Furthermore, the fact that any travel arrangements that are cancelled within the period are unlikely to be re-booked, means that the loss in revenue is not likely to be recovered at a later date, even when normality returns to the international travel industry.
It is not just the travel industry feeling the strain either. Juniper Research itself is having to brace itself for financial setbacks, according to founder and CEO Tony Crabtree.
Crabtree told The Parliamentary Review: “Our business will most likely remain strong in the short term. However, it will suffer later down the line should a recession take hold.
“After the financial crash of 2008 it wasn’t until 2009-10 that budgets were cut in our sector and we had to make redundancies. I am hoping that there will still be some form of support provided should a recession cut deep into the global economy for businesses like ours that work to longer timeframes.”