Telkom customers charged R300,000 for a product which costs R30

Telkom’s international roaming customers are charged R300,000 per GB for mobile data on MTN’s network in Nigeria which costs around R30.00 in the country.

Furthermore these roaming customers pay R30 per minute for calls while subscribers in Nigeria pay 30c per minute for the same service.

Even more surprising is that Telkom subscribers have to pay R30 per minute to receive calls on MTN Nigeria, which is typically free.

These rates emerged after Telkom Mobile launched international roaming – including voice, SMS, and data services – to its prepaid and top-up customers.

Andrew Dawson, executive product portfolio management at Telkom, said the international roaming rates for prepaid customers are similar to post-paid rates.

Telkom’s international roaming rates differ significantly based on the country and the roaming partner in that country.

On Telna in the United States, for example, Telkom users pay R5.00 per minute for calls, R1.50 per SMS, and R2,000 per GB for mobile data.

On Vodafone in Italy the price increases to between R50.00 and R100.00 per minute for calls, R10.00 per SMS, and R300,000.00 per GB for data.

In many countries, including Italy, Telkom users will also have to pay to receive calls.

It is clear that international roaming is extremely expensive with rates that will never be accepted when offered as a standard mobile product.

The table below provides an overview of Telkom’s roaming rates on MTN’s network in Nigeria, compared with MTN Nigeria’s local rate.

Telkom International Roaming on MTN Nigeria
Service Telkom roaming on MTN Nigeria MTN Nigeria Difference
Mobile data R300,000.00/GB R30.00/GB 999,900% higher
Mobile call R30.00/min R0.30/min 9,900% higher
Receiving a call R30.00/min Free
SMS R5.00 per SMS Free

These high fees raise questions as to why mobile operators across the world charge these exorbitant rates.

The traditional argument from mobile operators is that they are a conduit and merely pass on the bill sent to them from their international roaming partner to their subscriber.

There is, however, a problem with that argument. Local operators also charge international roaming customers exorbitant rates.

Another argument is that international roaming involves unique costs such as IOTs (Inter Operator Tariffs) – the wholesale cost an operator must pay to a foreign network for its customers to roam.

There are also costs like the financial clearing house, data clearing house, signalling, global roaming exchange, and roaming traffic management tool.

The IOT roaming cost accounts for a large part of the overall cost of roaming, and that is where operators coin it.

IOT rates are extremely high when compared with equivalent services which means travellers get fleeced if they use data or make calls when roaming overseas.

It is easy to lower IOT rates, but operators refuse to do it. And why should they? They are coining it and making millions from these exorbitant roaming rates.

The problem is so pervasive that that the European Commission (EC) has stepped in to lower roaming charges in the European Union (EU).

The EC introduced regulatory interventions on international mobile roaming service tariffs for the benefit of users. This is, however, only applicable in the EU.

To try to understand why Telkom subscribers have to pay up to 10,000 times more than MTN subscribers in Nigeria to use the MTN network, MyBroadband contacted MTN and Telkom.

Telkom and MTN are both South African companies, and it should therefore be easy to negotiate an agreement to benefit subscribers.

The response was telling. Telkom and MTN were not willing to answer questions about their high roaming fees.

Telkom and MTN’s silence should not come as a surprise. There is no excuse for charging subscribers R300,000 per GB for mobile data and no amount of finger pointing will change this fact.

Peter Zimri
Peter Zimri

Leaders in Africa are well aware of the high roaming costs and the negative impact on travellers.

ICASA Councillor Peter Zimri, for example, said low roaming charges was important for attracting visitors to South Africa and to help cross border trade.

The regulator blamed “loopholes in regulations” for the high roaming costs in the SADC region.

To try to address this problem, SADC Ministers of Communication signed a “roam like at home” initiative in 2007.

This initiative tried to convince African operators to allow roaming consumers to pay charges similar to what they pay in their home countries. Not much came from this initiative.

The high roaming rates in the SADC region fell under the spotlight again at a Ministers of Communications and ICT meeting in Durban in 2017.

At this meeting there were renewed calls for operators to reduce roaming costs in southern Africa or do away with them altogether. Strategies on how to do away with high roaming fees were proposed at this meeting.

President Cyril Ramaphosa also punted the “SADC Roam-Like-At- Home Initiative” in 2018 to produce a harmonised cost model for wholesale and retail roaming tariffs.

These strategies and plans were ineffective at curbing high roaming prices.

The poor execution of SADC’s “roam like at home” initiative means South Africans, and travellers to South Africa, remain at risk of bill shock if they roam internationally.

The solution is to avoid roaming.  South Africa travellers are advised to buy a local SIM card when arriving in a new country and select a suitable package for their stay.

Now read: Mobile operators’ rip-off scheme

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Telkom customers charged R300,000 for a product which costs R30