International roaming charges remain a money-making scheme for the mobile industry, and there is no will to change it thanks to the high profits.
So bad did the international roaming situation become that the EU stepped in in 2012 to stop the practice of exorbitant rates.
The EU’s 2012 Roaming Regulations put price caps on data charges – 70 cents per megabyte – which was six times lower than what these rates were three years earlier.
The EU went one step further in 2016 when representatives of the member states voted to abolish all roaming charges by June 2017.
This makes perfect sense. Why would local consumers pay R1 per MB when using a network, but when a traveller uses the same network the price shoots up to R100 per MB?
Africa trying to do something without success
In Africa, countries have been trying to do the same as the EU and signed the SADC “roam like at home” initiative in 2007.
This initiative wants to convince operators to allow consumers to pay charges as close as they would have paid in their home countries.
Fast forward 10 years, and not much has been done regarding the high roaming fees on the continent.
In September 2017, the high cost of roaming in the SADC was again discussed when communications ministers met, but not much came from this.
ICASA has blamed “loopholes in regulations” for the high roaming costs in the region.
Paying R220,000 per GB when roaming
To illustrate the ridiculous roaming charges in South Africa, one only has to look north to our neighbour Zimbabwe.
Telecel Zimbabwe subscribers pay $0.15 for 10kb of data when roaming on Vodacom’s network, $0.05 on MTN, and $0.03 on Cell C.
The table below shows how much it costs for Zimbabweans to roam on local networks, and how much it costs locals to roam on the Telecel Zimbabwe network.
|Telecel Zimbabwe Roaming Charges per GB|
|Zimbabweans roaming in South Africa||R220,330||R73,448||R44,069|
|South Africans roaming in Zimbabwe||R10,240||R5,120||R226,304|
|1USD = 14.24ZAR|
Cell C fighting for lower roaming costs
Cell C explained that the costs of roaming are proportional to what foreign networks charge local operators.
“Over the past two years Cell C has reduced the cost to foreign operators for international incoming data roaming by 89%, while the cost to Cell C from foreign operators has decreased by 49% over the same period,” Cell C said.
The company added that it is strongly in favour of a “Roam Like at Home” model for SADC countries, and is actively engaged with 32 operators in SADC to bilaterally reduce the cost of roaming.
“In addition, Cell C currently has prepaid roaming agreements with 60% of the SADC countries and is actively engaged with the remainder to prevent bill shock for customers when travelling to these regions,” the company said.
MTN supports lower prices
MTN SA’s executive for corporate affairs Jacqui O’Sullivan explained that wholesale costs for data usage while roaming is bilaterally agreed between MTN and other telecoms operators.
“Over the past several years, MTN and other Southern African telecoms operators have strived to reduce these costs to encourage data roaming,” she said.
O’Sullivan explained that although wholesale costs are agreed on a bilateral basis, retail charges are set independently by the retail business of each network.
“It also includes a number of input costs such as distribution costs, VAT, and exchange rate fluctuation protection.”
MTN is therefore responsible for setting the retail charges for its own customers as they roam on other networks, while other network operators are responsible for setting retail charges for their customers as they roam on MTN.
“MTN’s objective is to set prices at a level that encourages roaming, and we continuously review our retail rates to assure they are fair.”
Vodacom did not answer the question as to why Telecel subscribers from Zimbabwe pay $15 per MB to roam on its network.
Instead, the company said it negotiates discounted rate agreements with networks around the world to ensure that customers benefit from discounted pricing.