ROAM RAGE
Why is this so? Why should cellphone operators demand such exorbitant fees for the privilege of foreign cellphone subscribers enjoying the use of their phones outside their country of origin? Industry insiders joke that mobile operators are hesitant to charge their own customers high tariffs, thanks to competition in their home markets, but they do not miss the opportunity to “rob“ someone else’s customers.
Here’s how it works. When you travel to another country, your cellphone roams on a host provider, with which your home provider — Vodacom or MTN, say — has an agreement. For providing this service to you, the operator charges a fee to your operator.
The costs can be very steep. A five minute call on a cellphone from Germany to SA can easily cost as much as R90 and a similar call home from Brazil could cost more than R180 on standard rates. That’s more than the average monthly spend of Vodacom customers.
Because telecom regulators are empowered to look after the interests of subscribers in their specific countries only, operators have been able to cash in on foreigners roaming in their countries without having to fear the wrath of their regulators.
Until now, that is. The European Union (EU) is thinking of introducing legislation to reduce these fees. The EU’s information society commissioner, Viviane Reding, says the prices consumers have to pay for international roaming are not transparent and are generally too high.
Reding says that, despite pressure on operators from her office, “consumers continue to pay unreasonably high prices for using their mobile phones abroad”. She says that when the European Commission published a website with details of the costs of roaming, it became one of the commission’s most-visited websites. This, she says, indicates that public interest in the issue is high.
Reding now wants to the EU to pass new laws to bring down the cost of international roaming. Proposed legislation is due to come into force in the second half of next year, subject to the endorsement of national governments and of the European parliament.
Similar legislation or regulation is not on the cards in SA. “We believe that if national prices are decreased then international roaming charges will be taken care of automatically,” says Khulile Boqwana, manager for financial and economic analysis at the Independent Communications Authority of SA (Icasa).
He says roaming is not regulated because it is a “wholesale” service. “Operators negotiate between themselves and agree on what the rate should be and the authority simply endorses [rubber-stamps] what has been agreed on,” he says.
Cell C agrees with Boqwana’s view that liberalisation is the best way of bringing down prices. Vodacom, for its part, says the international roaming market is sufficiently competitive. “No regulatory intervention is required in SA,” it says in a statement in response to queries.
SA operators’ fees are inexpensive compared with their European counterparts. Vodacom says it charges other operators only R2,96/minute compared with Belgium’s R5,18, France’s R4,24, Germany’s R6,30 and Sweden’s R4,34. Cell C, on the other hand, says it does not charge foreign visitors for roaming on its network as their home networks charge them for usage.
SA operators say they are at the mercy of their foreign counterparts when it comes to getting a good deal for their subscribers. They have little control over the inter-operator tariffs charged by foreign networks. Cell C points out that the prices charged to its subscribers travelling abroad are “at the discretion of the roaming partner”. Operators tend to conclude roaming agreements with as many operators as possible in each country to ensure prices are kept to a minimum through competition.
Vodacom says that determining whether roaming tariffs are fair is a “subjective measure” as these fees must be benchmarked against those charged in other countries and must take into account factors such as SA’s distance from developed markets.
Boqwana says Icasa cannot judge whether roaming fees are fair because it does not know what makes up the cost of providing the service.
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