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Mobile data roaming costs are too damn high

By Mauricio Freitas, in , posted: 6-Mar-2012 10:08

There is no doubt that mobile data roaming are too high, as evidenced, once again, by someone who was unprepared to turn off mobile data on his mobile while travelling overseas, then runs to the paper, gets the bill wiped, generating a long discussion on Geekzone and some interesting comments on Twitter.

Mobile data roaming charges are too damn high. Taking for example Telecom New Zealand, the telco involved in this case, you can buy 2GB of mobile data on a prepaid plan for NZ$50 for use in New Zealand. This is about NZ$0.02 per megabyte of mobile data at home (using the Telecom New Zealand prices).

Yet, when you travel overseas they charge you NZ$ 4.00 per megabyte while in Australia or USA. This is 163 times more expensive than our local rates. Imagine you are actually going to Germany, where mobile data roaming will cost you NZ$30 per megabyte, or 1228 times more expensive than our local rates, a stunning NZ$ 30,720 per gigabyte. Remember the same gigabyte here in New Zealand would cost you "only" NZ$ 25 on prepaid.

How can this be justified?

I have contacted Telecom New Zealand for a breakdown of mobile data roaming costs. This is their reply:

For all of our international roaming rates, we negotiate rates with the international carriers we have agreements with. The roaming charges that are passed through to our customers are largely determined by the rates that we are charged by these carriers.
There are also other costs associated with enabling international roaming for our customers. For example, with each international carrier, we need to set up appropriate billing systems. We must also establish a signalling arrangement between Telecom and each international carrier that we have an agreement with. 

To keep our international roaming charging simple for our customers to understand, we have five roaming zones set up, based on the frequency that our customers travel to each roaming destination.

The international roaming charges negotiated with international carriers are passed through to customers, but it is not clear how much impact these have in the final pricing. Telecom is planning some actions in this front, alas nothing related to pricing:

The Smartcaps product will provide updates on mobile data usage by sending customers an SMS at up to five chosen dollar-amount thresholds, or unlimited data value can also be requested. Once the chosen threshold is met, roaming usage is stopped until the customer accepts further usage.
In addition, smartphone customers will soon be able to download a new mobile app called XT Telecom Roaming which allows customers to check roaming rates, country codes, and troubleshoot any roaming queries while not impacting their data usage. This app will be available to download for free from the apps store on customers' Android or i-Phone devices before departing New Zealand for their international destination. The app doesn't require data usage to run, so using it overseas will incur no roaming cost to the customer. 

Currently Telecom New Zealand sends a SMS to customers when they first connect to a roaming partner, explaining how much voice, SMS and data costs. If you know how much is the cost per megabyte, and knowing you will have to pay for all and any usage overseas, it is fairly easy to put two and two together and decide either not to use mobile data roaming or seek an alternative method, such as a local SIM card on prepay.

You should not think this is something affecting Telecom New Zealand customers only, as both our other mobile network service providers (Vodafone New Zealand and 2degrees) aren't much behind in terms of prices.

It doesn't look like the New Zealand government is blind to this. Survey results published in June 2011 say this:

The Minister for Communications and Information Technology, Steven Joyce, says four out of five New Zealand businesses surveyed say the costs of data roaming is prohibitive to their staff doing business in Australia.

The Minister has today released the results of a survey from the Ministry of Economic Development which asked New Zealanders and New Zealand businesses how they stay in touch when travelling across the Tasman.

The survey of 534 New Zealanders travelling to Australia was carried out between July 2010 and January 2011 and informed the decision of the New Zealand and Australian governments to conduct a joint investigation into whether regulatory intervention is required in the trans Tasman roaming market.

The limits placed on staff wanting to use their smartphones, tablets and laptops to access the Internet was one of the significant findings.

Survey findings:

- most New Zealand individuals and business travellers take a mobile phone with them when they travel to Australia, and most New Zealand business travellers take a laptop with them when they travel to Australia;
- both individuals and businesses attempt to limit use of mobile roaming services in Australia, with the main reason being concern about the cost;
- the majority of businesses believe that roaming services contribute to their staff's ability to work effectively while in Australia.

Unfortunately the link from that press release to the full survey results is dead.

Because mobile data roaming involves companies in two different countries, we can't even ask for a regulator to take a stand, because one of the telcos will be out of the regulator's jurisdiction, and the other can just say "that's what I am charged, I am just passing the costs". Anything to change this would require international agreements.

And on that note a trans-Tasman investigation on mobile roaming charges should've released a draft decision by end of 2011, but it's now delayed to mid-2012 with a final report expected not before end of 2012.

Currently EU lawmakers are pushing to have mobile data prices regulated across member countries. Their proposal is to limit mobile data roaming at 0.20 euro per megabyte (still 205 euros per gigabyte) but, you guessed it right, with no visible impact on any country outside the EU.

Sometimes it isn't easy for customers to ditch their mobile number and go with a local replacement in each country they visit. Business people depend on being contactable, families rely on communications. A temporary change of numbers is ok, but if one is going across multiple countries this becomes an inconvenience.

What do you think should be done? Regulation, transparency in costs, customers walking away from roaming?

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Mauricio Freitas
New Zealand

I live in New Zealand and my interests include mobile devices, good books, movies and food of course! 

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