Cutting Room: The fail of the roaming empire

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Ian White argues that the large amounts consumers are charged for overseas data usage could ultimately hurt operators 

At a recent dinner party one of the guests found out I was a writer who covered the mobile telecoms sector.

“Why,” he asked, “are mobile phone companies such unprincipled rip-off merchants?” (Actually he used slightly different words but this is a family newspaper.)

“Have you got a spare  six hours?” I replied.

Turns out his rage against the operators’ machine was connected with a Christmas holiday to the Caribbean.

He had an iPhone 4 on Vodafone and knew that using it for emails and internet while abroad could lead to heavy charges.

He had arrived at his destination jet-lagged and exhausted after a six-hour delay. Thus, he’d forgotten to flick the data-roaming switch on his iPhone to ‘off’ until the next morning.

Bill shock

It remained firmly in the ‘off’ position until he returned to the UK. During his stay he only connected via the hotel Wi-Fi.

He was mortified to find a £65 data-roaming charge on his next Vodafone bill.

I explained to him that as long as the iPhone was switched on and his email settings were set to ‘auto’, the phone would poll his email account every 15 minutes or so to pick up new messages.

Because of the time difference, he was asleep when it was late morning in the UK, peak time for his email inbox to receive messages – and all being collected by his iPhone over a Caribbean network.

This is one subscriber who has now vowed to leave his iPhone at home and buy a local SIM-card for an old unlocked Nokia when he travels.

That means Vodafone gets 100 per cent of nothing, instead of 50 per cent of something.

How many thousands of other customers must have had a similar experience of bill shock?

And how can they be expected to think it is THEIR fault? Or know why the charges are so high? How is a weary traveller expected to know if their phone is connected via Wi-Fi or 3G?

The cost to a local network to ping out a megabyte of data is the same, whether it is going to the device of a tourist or a local resident. There can be no justification for an operator charging its customer up to 100 times the local cost of the voice/data call.

Networks have defended their roaming charges on the basis that the technology required to administrate international cross-network and cross-country billing is complex and expensive.

Yet newspapers and TV consumer-protection programmes regularly feature instances of horrific ‘bill shock’ – the university student who ran up a bill of almost £8,000 using Skype over his Orange dongle in France; the lawyer charged £4,900 by Vodafone for accessing iPlayer abroad; another Vodafone bill of £31,500 (later cut to £229) for the man who downloaded a TV show in France.

Consumer fury

These cases do nothing to enhance the reputation of the operators (except perhaps to their shareholders).

Why spend millions on ad campaigns that position you as a warm and cuddly company, helping you connect with loved ones, when the truth appears to be that you are a raper and pillager of the wallet?

If you want to see the kind of consumer fury that has spring up over roaming charges, just hop over to isadisgrace.com/vodafone/roaming.

I particularly liked the effort that went into the comment, “The marketing offers the sun, moon, and stars – the user experience lies somewhere between the gutter and knee-high.”

This kind of consumer outrage is the reason the EU has stepped in to legislate against uncapped roaming tariffs.

Uniform pricing

But why should legislation be necessary?

Surely having user-friendly roaming tariffs would lead to higher call revenue?

When we use our credit cards abroad we accept a 2.5 per cent surcharge for admin costs.

Why is it not possible for networks around the world to keep prices uniform for subscribers wherever they are, and levy a similar administration charge to cover costs of inter-network billing?

The situation is analogous to a car that costs an extra £5 per mile in tolls when used on foreign roads. Or making the top rate of tax 75 per cent, leading to a net reduction in tax revenues.

We are now living in an age where IP broadband, Wi-Fi and 3G technology gives us the miracle of instant communications, to and from practically anywhere on the planet.

It is time for the networks to modernise their international data-pricing business model to reflect this new paradigm.

 

3 COMMENTS

  1. The MNO's exterionate approach to roaming data costs is also likely to damage their voice roaming revenues over time.

    Since I got an iPhone I've been extremely careful to turn off roaming data in favour of WiFi and to my surprise have found that I can use WiFi in most places I go to.

    By diverting calls from my mobile to a skype number, I can make and receive calls / video calls overseas at no cost. My recent trips abroad for work and pleasure have resulted in almost no roaming charges in the last year whereas a few years ago the MNOs would have at least received voice revenues. By effectively fleecing their customers, the MNOs run the risk that instead of just using services less, customers will find a satisfactory alternative that they'll also start to use when at home.

  2. This is the kind of insular thinking that the mobile industry is famous for. Carriers promote themselves as benevolent enablers of communications for all. The reality is they have little regard for the customer experience as long as the KPI's stack-up. Your logic assumes that customers in a mass consumer market have the time and inclination to familiarise themselves with obscure and arcane tariff T's &C's. To say "there is no excuse for ignorance" strikes me as a rather unrealistic argument. You may as well claim that Ryanair is justified in charging a family of four £40 to pay for their tickets by debit card because they have the option of obtaining a pre-pay MasterCard. However, if you can point to the last ad campaign that widely marketed roaming options in a simple and unambiguous way I'd be pleased to concede your point.

  3. There are a number of problems with this article.

    Firstly, there is different technology needed as it is easy for a home network to recognise one of it's own domestic customers but it doesn't on it's own know anything about the visitor and status of their account etc…

    There has also been lots of press about roaming and the regulation within the EU so there is now the 50 euro cut-off as well as regulated prices. Some operators also have rates below the regulated levels as well as take your home tariffs abroad which now include data. These are also widely marketed so whilst it's easy for a customer to blame the operators there is no excuse for ignorance.

    To answer Ian's questions is simple, the operators have done all those things but it's ultimately up to the customer to decide how they want to be billed. The bigger question is why, as a telecoms writer, does Ian not mention all these things which he should be very aware of!

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