The dynamic realm of travel is being reshaped by the emergence of 5G networks. Promising ultra-fast connectivity and minimal latency, 5G technology is poised to revolutionize travelers' interactions and experiences worldwide.
Imagine embarking on a journey where seamless connectivity is not just a luxury but a fundamental aspect of the travel experience. From real-time navigation assistance and instant language translation to immersive virtual tours and augmented reality travel guides, 5G empowers travelers with unprecedented access to information and services.
5G opens up many opportunities for innovation and revenue generation. Airlines, for instance, are already leveraging 5G to deliver enhanced in-flight entertainment, seamlessly streaming content to passengers' devices. Moreover, 5G-enabled eSIMs (embedded SIM cards) provide immediate connectivity across various destinations without the need for physical SIM cards. This advancement simplifies logistics for travelers and boosts customer satisfaction.
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eSIMs and 5G
5G is a revolutionary technology that is enabling fast, rich, real-time and reliable connectivity, taking the customer experience and journey to a whole new level.
Juniper Research forecasts that the travel SIM and eSIM market will grow from USD 1.7 billion in 2024, to more than USD 8.7 billion by 2028 due to the rise in the number of international travelers (1.6 billion in 2028).
As travel eSIMs become more popular and the number of travel eSIM vendors offering similar services also increases, vendors must explore new distribution channels to differentiate themselves from their competitors. The two ways in which travel eSIM vendors distribute eSIMs are via a mobile app or through a web portal.
Staying connected while traveling has become essential for leisure and business travellers alike. The convergence of eSIM technology and the revolutionary power of 5G networks is set to transform the travel industry, offering unparalleled connectivity and a host of benefits for globetrotters. As telecom companies embrace the sunset of 2G and 3G networks, they are optimizing their infrastructure, reducing costs, and repurposing spectrum to promote the adoption of eSIM technology.
eSIM and 5G technologies have converged, offering a myriad of benefits, including, but not limited to:
- Enhanced Security through Advanced Technologies: The convergence of eSIM and 5G technologies represents a significant leap in security protocols. eSIM facilitates the seamless integration of cryptographic profiles into devices without requiring physical alterations, while 5G networks employ sophisticated encryption methods. Together, these technologies provide robust data security assurances.
- Rapid and Reliable Connectivity: 5G's high-speed connections, coupled with eSIM's seamless transitions, accelerate data transfers while ensuring robust security measures. This combination enables the swift and secure transmission of large data volumes, enhancing the user experience.
- Better Trust and Reduced Risks: By embedding eSIM directly into devices, the vulnerability associated with physical SIM card loss or theft is mitigated. Moreover, the advanced security features of 5G adds layers of protection against potential data breaches.
Vendors must try to understand more about their customers’ requirements to offer more tailored eSIM packages as data varies between different age groups. For example, 18–34-year-olds consume more data due to the bandwidth needed to run data-heavy applications, games and streaming services. Data consumption might also differ depending on where the consumer is based, with certain apps being more popular in some countries than others.
As the need for more data, travel SIMs and eSIMs arises, 5G and future 6G networks are most suitable to deliver a seamless mobile experience. The integration of eSIM and 5G technology is poised to revolutionize travel experiences for both travelers and service providers alike.
Citing a recent example, in July 2024, Ooredoo Kuwait launched innovative roaming solutions to support travelers from Kuwait, whether they be Ooredoo customers or not. A key feature is the Ooredoo Roaming eSIM, designed to enhance connectivity and convenience during their travels.
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Roaming and 5G Monetization
As mobile communications advance to 5G and beyond, the industry is set to integrate these networks with cloud and AI capabilities. This evolution aims to stimulate both new and existing demand among users, driving industry upgrades and fostering robust, high-speed growth.
A McKinsey survey revealed that 14% of 18-to-24-year-olds are willing to pay for 5G boosters to enhance gaming or video streaming temporarily, using them an average of seven times a month if priced at USD 1. Additionally, 15-20% of customers are open to paying 7.5-15% more for "business class" 5G plans.
With this in mind, travelers tend to prefer greater downlink speeds, whereas live-streamers and gamers might care more about uplink and network latency.
Network APIs enable the creation of subscriptions, services, and applications that shift the 5G value proposition from abstract enhanced connectivity to tangible, desired customer experiences. A prominent example of a successful telco integration is international mobile roaming, which now allows seamless calling across borders and networks—a feat requiring extensive orchestration through bilateral contracts and operator consortia.
With the advent of 5G and IoT, new opportunities for monetizing roaming have begun to emerge. Network slicing under 5G allows Mobile Network Operators (MNOs) to offer differentiated services and premium benefits across expanded use cases. IoT devices, in particular, are poised to heavily depend on roaming services, creating a burgeoning market segment for MNOs.
Roaming agreements are pivotal in ensuring uninterrupted 5G connectivity and interoperability across operators and international borders. This capability supports ultra-high speeds, low latency, and extensive device connectivity, facilitating a wide array of innovative applications and services.
Notably, before COVID-19 and the rollout of 5G, most roaming agreements were already established and technology-neutral. Managing a high-quality roaming experience involved handling commercial agreements, partnerships, testing and launching services, maintaining thousands of test SIM cards, complying with regulations, mitigating roaming fraud, ensuring revenue assurance, providing value-added services like welcome messages, supporting retail, and managing charging, billing, and settlements with roaming partners.
Recent studies show that travelers from Qatar and the UAE enjoy the best 5G roaming performance in the Gulf region, with Qatar being the fastest destination for 5G roamers. Conversely, roamers from Kuwait and the UAE faced notable declines in 5G network performance while roaming.
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Telcos Taking Travel to New Heights
In an exclusive interview with Tamara Al Bakri, Head of Roaming and Carrier Services, Vodafone Qatar, Telecom Review delved into how Vodafone Qatar is differentiating its offering by launching the GigaNET VoLTE (Voice Over Long Term Evolution) technology, which provides superior voice and video calling and a fast internet connection simultaneously with no interruptions.
From a roaming perspective, this represents an extraordinary evolution in mobile telecommunications. As of December 2023, Al Bakri confirmed that 85% of Vodafone Qatar’s data roaming is carried out on 5G.
In the Gulf region, travelers generally favor using 5G roaming services, often due to local operators offering affordable data plans. Migrant workers have also opted for local SIM cards to avoid roaming charges. Recognizing this trend, Gulf operators are leading the way in adopting 5G Standalone (SA) and enhancing roaming capabilities.
As the demand for roaming services continues to grow, the roaming clearing market is experiencing significant expansion. The integration of 5G networks with roaming services necessitates efficient and reliable roaming clearing solutions capable of managing the increased volume of data and transactions.
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In 2019, Etisalat Carrier & Wholesale (C&WS) and Sparkle announced the establishment of a 5G data roaming interconnection between Etisalat and TIM, facilitating 5G roaming between the Middle East and global destinations. This strategic partnership sets a precedent for 5G in the global mobile and carrier community. Expo 2020 became the first major commercial customer in the MEASA region to partner with Etisalat on 5G.
In early 2020, Batelco became Bahrain’s first operator to introduce 5G international roaming services in the UAE, in collaboration with du. In 2021, Omantel became Oman's first mobile network operator to provide 5G international roaming, ensuring customers enjoy seamless access to high-speed data services while abroad.
Moreover, in mid-2023, du and Zain Omantel International (ZOI) formed a strategic wholesale international agreement that guarantees exceptional voice, messaging and data roaming services powered by advanced 5G technology connectivity.
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Conclusion
The impact of 5G on travel is profound and multifaceted, offering enhanced connectivity, innovative services, and new revenue streams for service providers. As 5G continues to roll out globally, its potential to reshape the travel industry remains limitless, promising a future where connectivity is as essential to the journey as the destination itself.
Monetizing 5G, roaming, and eSIM technologies are essential development sectors that telcos must actively address to become future-ready. Success in the competitive telco landscape depends on leveraging these advancements to offer enhanced connectivity, streamlined roaming experiences, and new applications.
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