Global roaming or global rip-off?

Bill shock can be a serious hazard to company bottom lines and it's time telcos did more to clear things up for their enterprise customers.

Let me start my piece by asking some simple questions and providing some background on what we know about global roaming costs.

In almost every purchase you make, understanding of the buy price is the most crucial element of the transaction. Would you buy fruit and veg if you didn’t know the total price until you had unpacked the goods home, when it was too late to do anything? I suspect the answer is no.

So why is it that no one can tell you how much you are going to pay for mobile phone calls and data usage on your next trip overseas?

The current reality is that you don’t know what you’ve spent until the dreaded bill lands on your desk, sometimes four weeks after you made your overseas jaunt. The fact is that telcos can actually provide this information. However, they choose not to because global roaming yields margins three to five times greater than the same usage made by us when we are in Australia.

The significant cost of global roaming creates a high cost for business users and, mindful of these costs, users must curtail telecommunication usage so that the costs of business are kept in check. However, when staff are overseas and “offline” because they are curtailing usage, the consequent lack of communication can hold up business projects, spilling adversely into productivity.

For those who are happy to foot the large roaming bills, the large costs are taken away from company bottom lines, causing a flow on effect to investment, productivity and profits.

Transparency long overdue

In Australia, some transparency to overseas roaming costs is well overdue. Competition in this space amongst the main carriers has been non-existent, and they have, for years, been happy to sit on their hands. However, as always, smaller more nimble players such as Travel Sim and VRoam have provided a viable alternative to roaming plans and costs and forced the hand of the main carriers.

In fact, Optus last week launched its Bridge Alliance Roaming Pack. Products of similar nature are starting to emerge from most carriers. While these types of carrier products are a good start, especially when it comes to helping businesses understand and manage roaming costs in advance, but the set-up of these products remains clunky and its usage terms remain very limited.

In the EU, carriers were made to be transparent through policy and the regulatory body forced European roaming prices to be flattened.

So why is it that a short trip to China or India with your Blackberry or iPhone can cost you and your business thousands of dollars in roaming charges?

Obviously, the telcos are making huge margins or roaming charges and they are not sharing these charges with us in advance, making it difficult to make comparisons and thus find alternatives. The telcos also provide very few products that allow real-time cost reporting or set limits on charging in advance. Funnily enough, some of these solutions are available for consumer products, but the same carriers do not make the services available for business customers.

Regulating a change  

However, the real failure is again regulation of the telecommunication carriers. There has been no requirement for carriers to detail their roaming charges, no requirement to ensure that clients and customers are provided with comprehensive price lists. There is a lack of competition policy which has meant that no alternative products have had to emerge or had the incentive to emerge.

I recently asked an Australian Senator why the major Australian carriers cannot (or will not) provide me with accurate cost sheet of my potential charges when going on holiday overseas.

His response was a shrug of the shoulders and a quip of “that doesn’t seem fair”. When pressed on whether cost transparency is something that the government should compel the carriers to provide, the response was, “it sounds very challenging”.

I have a very straight forward view on this issue. At Full Circle we provide clients with international roaming cost details so it’s fair to assume that the carriers, who are custodians of all the details, can do the same.

It's just that there is a big difference between what they can do and what they are willing to do, especially when they are raking it in.

Tony Simmons is the managing director and founder of The Full Circle Group, an independent telecommunications consultancy firm focused on Telco expense costs and management. 

 

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