Mobile Operators May Lose $25 Billion Revenue as Travel Restrictions Cut Roaming Charges

Mobile-network operators could lose $25 billion of revenue this year from coronavirus-related travel restrictions. Those restrictions will cut roaming charges, which account for about 6% of the companies' global revenue, a study says.
Publish date:

Mobile-network operators are poised to lose billions of dollars of revenue over the next nine months as the coronavirus spreads worldwide and restricts people from traveling across borders. 

Widespread travel restrictions related to the virus mean that operators could lose revenue derived from roaming fees, according to Juniper Research. 

Between now and year's end, those restrictions could lead to $25 billion in lost revenue. 

Airlines, hotels and other travel-related businesses are among the hardest hit by coronavirus-related travel restrictions. The dramatic drop in demand could last through the summer. 

Major U.S. airlines are reportedly pondering a voluntary shutdown of all passenger flights and have eliminated the vast majority of international flights. That's owing partly to a 30-day ban on travel between the U.S. and Europe, enacted earlier this month. 

In Juniper's worst-case scenario, the virus continues to accelerate and perhaps reappears in a second wave, prompting the cancellation of 650 million passenger trips over the next nine months. 

That figure represents more than 80% of expected international passenger trips.

In that scenario, operators could lose nearly $13 billion in roaming revenue just in the third quarter, which under normal circumstances includes the most popular months for travel. 

Roaming revenue accounts for only about 6% of overall operator-billed revenue worldwide, which likely limits the broad impact on the companies' bottom lines. 

But given that most international travel is unlikely to be rebooked, they have "no mitigation strategies" to stem the losses, according to Juniper.