Why can’t R128 per MB roaming costs be regulated?

Data roaming part two: Surely this is the answer to sky-high rates?

By - May 10, 2013
Inconvenient Truth roaming mobile rates

It’s the obvious question: if international data roaming costs are so insanely high, why can’t a regulator like Icasa (the Independent Communications Authority of South Africa) simply force them lower?

Last week’s column, The truth about international mobile data roaming (part one in this three-part series) explained how these agreements and tariffs between operators are set up.

Crucially, they’re bilateral agreements. This means both operators have to agree to change rates – something they’re both unlikely to want to do, given the incredible margins in this business.

To be clear the operator on which a customer is roaming makes the money (the amount is billed straight through to that user’s home network).

So, its simply impossible for Icasa (or any other regulator) to try and regulate roaming charges in a vacuum – they’ll only be trying to regulate one half of an agreement.

And even if a regulator does manage to force through some sort of regulation, the agreement will then be lopsided, and the only people who’ll benefit are the international visitors roaming on any of our networks.

Hardly a solution.

The European Commission (EC) has regulated the telecoms space very effectively. In 2007, it capped voice and SMS rates across Europe. The Commission’s digital agenda commissioner Neelie Kroes then turned her sights on data roaming tariffs.

Data roaming within Europe, which was previously priced at around €5 per MB in 2009, has been forced lower from July 2012 to a cap of €0.70 per MB today.

There is a further drop coming in July (to €0.45), and the cap will be €0.20 by July 2014.  (Its even gone so far as to regulate wholesale tariffs, ie. what operators charge each other)

By 2014, customers will also have the choice of roaming provider – like they would choose a Wi-Fi network. Expect this to further stimulate competition.

The EC has also instituted a limit of €50 for data downloads and operators have to send customers a warning text message. Thereafter, consumers have to confirm they are happy to exceed this level (or another pre-agreed level).

Ironically, many large operators in Europe have networks in practically every country but, until the EC took action, were more than happy to charge their own customers exorbitant rates when they travelled on the continent.

Vodafone UK for example, now offers customers the option of “taking” their existing price plan with them in over 35 European countries, at an additional charge of only £3 per day. See what useful regulation does?

Beyond Europe however, the Commission is as hamstrung as every other regulator worldwide. It simply cannot regulate for its citizens travelling to other countries.

The best hope we have is for larger regulatory groupings (like the EC and FCC in the US) to start putting in place bilateral caps in place which will force others to act (and will hopefully move prices lower).

Perhaps the African Union could look at roaming regulations – after all it has a Human Resources, Science and Technology Commissioner? Although that’s wishful thinking…

Why isn’t SADC regulating this? I think we know the answer to that too…

And us South African consumers? None of the four operators have obvious ways for customers to either cap their usage overseas in real-time or to request alerts when they reach certain levels of usage.

The best we can do is pressure them into introducing these caps and warning systems.

Source: Moneyweb

More about high data roaming prices

Why roaming prices are insanely expensive

Roaming data rate: R534,477 per GB

R140,000 Bill: ‘Roaming is a bitch’

More competition needed to cut data roaming costs: OECD

Vodacom roaming price cut promotion

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