A preliminary MED discussion document, released today, finds transtasman roaming charges are “relatively high” and suggests steps phone companies could take to make “bill shock” less likely.
Reading between the lines, telcos would seem well advised to follow the report’s suggestions if they want to avoid regulation - which the report’s author’s note has already happened, to a degree, in the EU.
For Telecom, the report will make especially dismal reading.
The company launched XT, in part, so that it could re-enter the lucrative, $100 million+ global roaming market. Each year, around 1 million Kiwis travel to Australia, with around the same traffic in the other direction.
But now, like Vodafone, it faces the prospect of voluntarily lowering the cost of calls and data for customers visiting Australia (and Australian partners’ customers visiting NZ), or having the government do it for it.
Aust-NZ governments co-operate on report
The report is the result of a meeting between Communications Minister Steven Joyce and his transtasman counterpart Senator Stephen Conroy.
Since the report, New Zealand’s Ministry of Economic Development and its Australian equivalent have been investigating the cost of transtasman roaming.
Single economic market
“The agencies are particularly interested in IMR between New Zealand and Australia, owing to the ability of the mobile market to play an important role in facilitating a ‘single economic market’, today’s MED report notes (the ministry carried out the investigation because the Commerce Commission has no jurisdiction beyond our shores.
Joyce notes nosebleed charges, sky-high costs
Speaking at the CommsDay Summit 2010 in Auckland last week Tuesday, Mr Joyce noted that was hard to find a domestic mobile plan that charged more than $100 per gigabyte, when roaming it was easy to rack up a $10,000 or even $30,000 charge for the same amount of data.
“The prices themselves are relatively high,” said Mr Joyce.
Billing also needs to become more transparent, said the minister.
Phone companies did state their international roaming charges, but in kilobit per second and megabyte per second terms. Many people did not know how these corresponded to everyday mobile data use, such as sending an email, Mr Joyce said.
Today’s report states that “the transparency of prices appears to be inadequate and consumer awareness seems low, and the prices offered seem relatively high”
The report notes that Telecom, Vodafone and 2degrees list roaming charges on their websites, but also outlines several steps they could take to make pricing more obvious and predicatable including:
- A centralised website where, for example, customers can compare the roaming offers of the relevant home networks.
- Flat-rate roaming prices (for example, the Vodafone Passport offer available to customers of Vodafone Group’s European subsidiaries sets a single charge for any received call up to 60 minutes in length).
- A personalised SMS on arrival in another country to inform the roamer of the applicable rates.
- Mechanisms to ensure a postpaid roamer is not billed beyond an agreed financial limit. A new rule introduced for EU member states in March 2010 requires operators to enforce a mobile roaming billing cap of €50 unless otherwise specified by the customer.
Do it, do it
Telecom and Vodafone, already reeling from the government’s moves to regulate mobile termination rates domestically, will now be considering whether to take proactive steps to avoid another scrap, and more regulation.
The minister is seeking public feedback on the MED report, which is online here.