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Phone companies face transtasman roaming regulation - for real, this time

Julia Gillard may have stuck her hand up a Kiwi's bum, but it was Aussie phone companies who got shafted as the Labor leader met with John Key earlier today. Three years after cabinet ministers first raised the issue, relief is finally in sight for transtasman travelers suffering from mobile phone bill shock.

At a press conference in Queenstown, our Prime Minister and his Australian counterpart announced a joint action to address the high cost of mobile roaming between their countries.

Beyond the telco industry, annual leaders' meeting saw NZ agree to take 150 asylum seekers or "boat people" off Australia's hands a year (who will count toward NZ's existing 750-a-year refugee UN commitment). The two governments will also allocate $3 million in matched funding toward a potential vaccine for Rheumatic Fever. And a small potatotes agenda was rounded off by a limited trial of new technology to automate NZ traveller's departure from Australia.

On roaming, joint report by NZ's Ministry of Business, Innovation and Employment and Australia’s Department of Broadband, Communications and the Digital Economy recommends:

  • In future, New Zealand’s Commerce Commission and the Australian Competition and Consumer Commission will collect and report regularly on wholesale and retail transtasman mobile roaming services; and
     
  • Both Commissions will also gain new powers to intervene in the market, for example by setting price caps, or obliging operators to offer local-access services that do not require a change of SIM card.

A spokesman for ICT minister Amy Adams told NBR ONLINE that legislation to put both measures into effect would be introduced by the end of this year.

Industry eyes will be on the level of the price cap, and whether any premium of fees can be attached to local access.

Since then ICT Minister Steven Joyce first met with Australian federal government ICT Minister Senator Stephen Joyce on the issue in 2010, and a joint government investigation began, Telecom, Vodafone and 2degrees have all made steep cuts to their data roaming rates.

Telecom has been the most aggressive, recently introducing a flat $6 a day data roaming rate for New Zealanders traveling in Australia (albeit only guaranteeing that rate until June next year, when it will be reviewed).That's reasonably keen pricing, which may fall within whatever cap is set by the government.

Vodafone has extended its Data Angel service to transtasman roaming, meaning its users have to actively choose to up their data as they near their limit (avoiding the hundreds or even thousands that result in so-called bill shock).

Aussie telcos uncooperative
But it seems their efforts have not been enough to head off regulation. 

As Telecom's new flat rate was introduced in December, CEO Simon Moutter told NBR ONLINE that many travelers to Australia were so scared of bill shock they turnoff off data. He had experienced the phenomenon himself as a civilian before returning to Telecom. That was ridiculous in an age of smartphones, the Telecom boss said.

But although Mr Moutter moved surprisingly swiftly and sharply to address the problem.

However, earlier, ICT Minister Amy Adams noted that regulators are grappling with multiple phone companies on both sides of the Tasman.

On this point, Telecommunications Users Association CEO Paul Brislen told NBR this afternoon, "The New Zealand telcos have responded well to the threat of regulatory intervention. The Aussie telcos, however, have not budged at all and roamers from Australia coming to New Zealand will still pay $19,000 per gigabyte of data. That’s outrageous."

Next up: US, Europe, Asia
Tuanz has lobbied hard on transtasman roaming, and Mr Brislen welcomed today's development.

But he is also already  turning his attention to the next rounds of the fight.

"In the medium term we’d like to see our transtasman deal extended into South East Asia, Europe and the US," he says (for its part, Telecom has introduced a $10/day flat rate to mutliple countries).

"Ultimately we’d like to see the end to roaming as a product. Today’s announcement goes a long way towards making the telcos sit up and take notice."

Institute of IT Professionals head Paul Matthews struck similar notes.

"While we always think of regulation as a last resort, it has proved necessary in this case, with telcos on both sides of the Tasman refusing to work together to resolve this long-standing issue," he told NBR today.

"It's great to see both government's following up their earlier threats and seeing this matter through and we welcome the next stage of developments."

Let's hope they come soon. Phone company  investors might shudder, but business travelers will feel liberated.

ckeall@nbr.co.nz

More by Chris Keall

Comments and questions
11

At last.

It is better value to get a local SIM and pay local rates. They are significantly cheaper than here.

In 2013, it's medieval to have to queue for a local SIM, then swap it in - losing your phone number in the process.

It's fantastic that the pending law change will oblige operators to offer local-access services that do not require a change of SIM card.

It is medieval to pay International ATM fees when withdrawing money from a Westpac/ ANZ/ ASB/ BNZ card at a George Street branch.

Can we deposit money at the owners of these banks using our NZ bank account number then?

There are bigger things to whine about than taking a few moments to buy and load a local SIM.

The difference is, in the banking example people can still load money into your bank account. With the SIM example, people can no longer call or TXT you.

A local or me loading money into my account is more difficult than getting a local SIM.

People can call & TXT you on a different number and now there are no inbound charges!!

But I suppose these should be dropped as well. Jezz why not just call us the 7th State of Australia so we can all be one happy market. We inherent the local STD codes so that there are no more International charges.

While we're at it NBR should drop the subscription rate as well.

Parity between the 2x countries is inevitable on everything and then it follows we must join. I hope I see us as a state of Australia in my lifetime.

*yawn*

Put this on John's report card and check it before the next election.

I'll never happen - like new roads of national significance and more immigrants from western Europe.

What is this we see? Hands on Government?

Gillard flew to NZ to discuss mobile roaming rates? What a waste of time. Hardly a big issue.

Hardly a big issue, for non-travelers you are probably right. But for someone who has returned home to find a $5000+ data roaming bill...it probably is. Used to work for a telco, we were told to turn roaming off (or at least limit usage) as it was a hard cost to the business. So if they think it's too expensive, it probably is! It's worth noting that the margin on roaming rates is almost 100% so you can see why they haven't been quick to drop the rates. It's a shame they can't self regulate...I hate seeing the Government intervene, however the telcos have had long enough to drop their rates, so I welcome this move (I might have a differing view if I was still eligible for the annual company bonus!).