Aussie, NZ govts weigh 7 options for transtasman mobile roaming regulation
PLUS: Phone companies' profit-margin on sky-high roaming rates is said to be still "significant" despite cuts. Tuanz has a radical solution.
After a combined investigation, the Australian and New Zealand governments consider seven options (see below).
The options include what a joint report calls the “blunt intervention of price caps.”
Other options including doing nothing (or “monitoring”), and the well-meaning, impractical sounding “decoupling”, or letting a person choice their phone provider while travelling across the Tasman.
The report seems far from staunch.
A section on the profit made by phone companies with transtasman roaming was supposed to culminate in a graph revealing their margins, but instead simply says:
One New Zealand operator objected to the use of a graph to show margins. We have therefore not included a graph here. We note simply that the margins in the New Zealand Retail Market are trending down, and we welcome this. We also note that, ostensibly, the margins are still significant.
After a combined investigation, the Australian and New Zealand governments consider seven options.
All up, the stance is little changed from when NBR caught up with ICT minister Amy Adams in May, when the minister said ongoing price cuts were positive, but that price regulation was still on the cards.
And indeed prices are still steep. The report plays into the phone company's hands by couching pricing in per megabyte terms - which makes the cuts sound huge. Carriers have cut their transtasman mobile data roaming from $10 per megabyte - or as high as $30 per megabyte - to often as little as $1 or 50 cents per megabyte (exact pricing depends on your Telecom, Vodafone or 2degrees plan).
But anyone who travels knows that 50 cents or $1 per megabyte equates to $500 or $1000 per gigabyte - still insanely high to the $20 to $25 per gigabyte many pay for mobile data domestically.
Mega-what?
If you find talk of megabytes and gigabytes confusing, you're not alone.
Telecom, Vodafone and 2degrees have introduced a range of measures to prevent mobile roaming bill shock. These include txt alerts, pre-set limits and more user-friendly language.
In May, Ms Adams said mobile roaming terms were still too confusing. Phone bills of $1000 or $1500 were will landing in the mailbox, or inboxes, of transtasman travellers.
She reitereated that today, saying "Most New Zealanders take their mobile phone, tablet or laptop with them when they travel to Australia, but many users do not know how much data they are using when making phone calls or accessing websites or emails.
"It is my expectation that New Zealanders at home and across the Tasman should be able to expect fair and equitable pricing and a clear understanding of the costs."
Best roaming costs: none
Telecommunications Users' Association head Paul Brislen told NBR, "We're pleased to see the report released - it's been a while in coming and it's comprehensive and offers a number of solutions."
Brislen also offered his preferred solution (leaning toward Option Three below):
"Tuanz believes the best way forward is to remove the idea of 'roaming' entirely," Brislen says.
"Customers buy a service from a provider and should be able to use that service no matter where they are. In Europe this model is starting to emerge - buy a gig of data from one telco and customers can use it throughout Europe.
"That would be our preference as customers are increasingly operating in a world where borders and boundaries are simply not considered when they look at their telco use. They want to get off a plane and carry on using the service as if they were at home."
Whatever you want to happen, don't hold your breath.
The joint Australia-New Zealand government investigation into mobile roaming price regulation began in early 2010. Followiing submissions, a final report will go to ministers on each side of the Tasman on September 27 - then there will be futher mulling over whether to follow one of its recommended options ... and then the complexities of amending laws on both sides of the ditch.
Ms Adams says roaming price cuts have clearly been in reaction to the threat of regulation (although the telcos deny it). If they wish to make further cuts, which could head off regulation, they've got plenty of time.
But it still might not be enough.
Both the Australian and NZ governments regulated mobile termination rates (MTR), or wholesale mobile charges between carriers, despite steep voluntary cuts made by the phone companies, and a promise to make further voluntary cuts.
RAW DATA: The seven options
The below options were put forward in a joint report by New Zealand's Ministry of Business, Innovation and Employment (including the former MED) and Australia's Department of Broadband, Communications and the Digital Economy (see the full report here)
OPTION ONE is for the two governments to maintain a watching brief, and to launch a further investigation in future, if necessary. However, the high level of resources required for an investigation, combined with the uncertainty created for all stakeholders, militates against this option.
OPTION TWO would involve unbundling trans-Tasman retail roaming services from domestic retail mobile services, so that a trans-Tasman roamer could choose one operator (say, Telstra) to provide domestic communications and a different operator (say, Optus) to provide trans-Tasman roaming services.
OPTION THREE would involve requiring operators to provide mobile local-access services, which enable roamers to act as local users in their destination, without having to swap SIM cards and without becoming unreachable on their original numbers. Under one variant of Option Three, the roamer arranges the mobile local-access services through the home network. The impact of this variant will depend on the terms on which home networks are allowed to offer this service. Under a second variant of Option Three, the roamer establishes a direct billing relationship with the visited network. This would potentially have a materially positive impact on competition, as home networks would have to compete on a level playing field against the visited network’s standard domestic offer.
OPTION FOUR would see New Zealand and Australia adopt price caps. This would be a blunt form of intervention, unlikely to promote better competition. However, it would potentially be an effective way of ensuring prices drop over time.
OPTION FIVE is for New Zealand and Australia to introduce wholesale terms of access available to a home network seeking to provide trans-Tasman roaming to its customers. Potentially, this could be accompanied by a requirement on the home network to pass through to its customers any savings it enjoys from the new wholesale rates. However, unless combined with one of the other options canvassed, this option faces the issue of whether or not home networks would actually request the new terms of access.
Option Six would require mobile operators to provide the New Zealand and Australian regulators with wholesale traffic and revenue information on trans-Tasman roaming, and for the regulators to report publicly on this. This would enhance transparency in the market, potentially putting downward pressure on prices.
Option Seven is to empower the New Zealand and Australian regulators, when investigating trans-Tasman roaming services, to choose from the regulatory measures set out in Options Two to Six, should they determine that intervention is warranted. This would ensure that the regulators pose an increased regulatory threat. In such a context, operators would likely feel constrained in their ability to set unreasonable terms of supply and, to the extent they did not, the regulators could intervene effectively.
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Aussie, NZ govts weigh 7 options for transtasman mobile roaming regulation
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