Every now and again a new story about international roaming charges comes to my attention. Recently I could not help overhearing some English people in a restaurant talking about the experience one of their daughters had following loss of her phone. Seemingly the daughter had been travelling in Spain and had taken an overnight bus to a new destination. After she had set out, she found she didn’t have her phone with her. She thought that she had probably packed it in her rucksack by mistake (it has been with several items she did pack) and as it would have been very difficult to get to the bag while travelling left it at that and fell asleep. The next morning she found that her phone was indeed missing and duly reported it to her network operator. Under their rules, the same as those applied by most operators, she was liable for any calls made before she reported its loss. This turned out to be some £27,000. At that price presumably this was for data download, rather than voice. Unfortunately I didn’t hear then end of the story as I was interrupted by the waiter at that point, so I don’t know if the operator did the honourable thing and waived the bill or not. I also don’t know when it occurred; the people recounting the tale were speaking as if it was recent, but they were doing so some months after the EC mandatory limit on bills for data downloads were introduced.
This put me to wondering again why operators persist in charging such high roaming fees, far above domestic charges, despite increasing pressure from regulators and the evident and considerable upset it can cause their customers. The very existence of the phrase ‘bill shock’ is telling. Friends I’ve asked who work for the operators have never provided me with a really satisfactory explanation; it’s apparently always because of the other operators, who have no interest in the roaming customers of other operators, and it’s not possible to get agreement. However, many of the largest players came together to agree to lobby the EC together to avoid mandatory cuts. And in the story I have repeated above, the user’s UK network operator also runs a network in Spain so there would be no need to negotiate with another operator.
Yet it is clearly possible to arrange low cost roaming. For example the Amazon Kindle with unlimited worldwide 3G roaming only costs about £40 more than one without 3G.
That the charges bear no relationship to cost is widely recognised. Perhaps operators fear a loss of revenue? Their national markets are very competitive and most face considerable pressure on price, so a loss of profitable international roaming revenues would affect their profitability.
In most cases reduced prices result in increased demand; could it be that a decrease in price could result in increased revenue? Prompted by this story I will look at the relationship between price and usage in a future blog.