Operators to Lose over $25bn in Roaming Revenue over the Next 9 Months, as Coronavirus Impacts Travel
Hampshire, UK – 27th March: New analysis from Juniper Research has found that the impact of Coronavirus on the international travel industry could cost operators over $25 billion in lost revenue during the next 9 months.
Juniper Research examined two possible scenarios: a medium and high impact, believing a low impact is now not possible. The high impact scenario assumes 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.
For more insights, download our free advisory note: Coronavirus: The Impact on Mobile Roaming for Operators and watch our video discussion.
No End in Sight for Travel Issues
In the high impact scenario, Juniper Research believes that over 650 million passenger trips will be cancelled due to Coronavirus over the next 9 months. This is over 80% of the anticipated international passenger trips that were previously forecast before the spread of the virus.
The research assumes that over half of all roaming revenue for the year will be affected, amounting to $25 billion in lost revenue. The research 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 these three months.
In terms of the overall impact on operators, it must be noted however that global roaming revenue only accounts for approximately 6% of total operator-billed revenue per year, limiting the hit on the industry.
No Mitigation Strategies
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.
Additionally, the research highlighted that travel cancelled due to the spread of Coronavirus is unlikely to be rebooked. As a result, this loss of roaming revenue is unlikely to be recovered once the international travel industry resumes normal service.
Juniper Research provides research and analytical services to the global hi-tech communications sector; providing consultancy, analyst reports and industry commentary.
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