feeding my own misguided insanity

The International Roaming Mobile Phone Rip-Off

To say that I’m a fan of international roaming would be a big fat lie. Don’t get me wrong, I love the freedom of being able to take my mobile phone and SIM (subscriber identity module) card from my current provider, travel half way around the world and still be able to communicate as if nothing has changed. Achieving all this without me having to lift a finger is a blissful experience and telecommunications companies (Telco’s) are only too happy to offer such a wonderful service.

But this is where the romance with international roaming begins to turn into a nightmare – at least for anyone who has had the displeasure of reading their bill following a trip abroad.

Despite two decades of technical know-how, countless projects with Telco’s across most of the globe and an intimate knowledge of the underlying telecommunication backbone, I still find it difficult to justify the exorbitant roaming rates that we as consumers must pay.

To put it bluntly, we’re all being taken to the cleaners and systematically ripped off.

Pre-paid vs. Post-paid

A part of the problem stems from the fact that most people in the western world are locked into long-term (12 month or longer) contracts that were probably bundled with their mobile phones. These are customers who settle their bills at the end of each month, or whatever the billing cycle may be; the industry refers to them as post-paid customers. In contrast, most people in the developing world seem to prefer using pre-paid cards to fund their communication needs and choose unlocked mobile phones that can be used with a variety of networks.

So, how does the existence of a contract (or lack thereof) change our usage habits? Well, I would argue that when a customer pays their bill at the end of a billing cycle it becomes far more difficult to refuse the astronomical international roaming charges. In addition, contracts usually attract a monthly service charge – a charge that rarely provides a post-paid customer any additional “services” over those being offered to pre-paid customers.

Once you (the post-paid customer) accrue the roaming charges, you are at a disadvantage because (1) it is up to you to pay the bill even if the international roaming (or data roaming) was accidental, and (2) if you refuse to pay the bill, you will be in breach of contract and risk either service disruption, litigation or both. Simple things like forgetting to turn off the data service before leaving your home country can cost you hundreds of dollars in international data roaming charges and many people unwittingly fall prey.

A pre-paid scenario is much simpler and in the long-term far more economical to deal with. If you do happen to roam on a pre-paid plan, your service will continue to operate until the credit is used up. There are no contracts, traps or expensive surprises at the end of the trip and if you require additional credit, topping up is as simple as buying another credit voucher or scratch card. No surprise why the developing world has embraced the pre-paid model with such gusto. No money = no service. But most importantly, it steers everyone clear of a debt-based society.

In a digital world where the availability of cheap broadband has stripped away the need for bandwidth conservation, pre-paid cards also serve to instill some sense of size and the corresponding cost associated with using the internet in consumers who would otherwise struggle to tell the difference between a kilobyte (kB) and a megabyte (MB).

Surviving the SIM Card Jungle

It’s not uncommon for people in the developing world to carry two or three phones – each one loaded with a SIM card from a different Telco.

The reasoning here is simple. If you have a friend who is on Network A and you’re on Network B, it doesn’t make sense to call each other while attracting excessive Network A to Network B charges.

Many networks have special deals where Network A to Network A calls are free or at discounted rates during certain times. Therefore, carrying a phone with Network A SIM is important if I want to save money. Similarly, you would call any of your friends who are on Network B using your Network B phone. It’s all a bit convoluted but it does achieve its cost-saving goal.

But carrying multiple phones is hardly convenient – multiple chargers, extra bulk and probably not enough pockets. Some manufacturers have recently released phones that are capable of holding dual or triple SIMs and are very popular across Africa and Asia. One phone, one charger and one pocket.

All that being said, however, be careful of the make or model you choose. One Chinese model I used with dual SIM capability left my hand tingling after just ten minutes of usage – maybe pay more attention to FCC/EPA/FDA cell phone exposure limit certifications before holding them to your head for extended periods of time. Choose a reputable brand rather than some unknown low-priced model that probably has no regard for health and safety standards.

To be honest, I can’t afford roaming charges if I’m abroad for any longer than a few days and I carry separate SIM cards for each of the countries I frequently visit. To keep track of which card is which I mark them with the corresponding two letter country code.

SIM Card Collection

SIM Card Collection

 

Many providers ship their SIM cards with PIN numbers, or don’t give you the option to turn off that particular security feature. To make my life easier I simply reset all my SIM pin numbers to the same four digits across all my SIM cards – irrespective which SIM I use or which country I arrive in, the PIN is always the same.

Typically you will only need to change the default PIN for this to work, but if you want to change additional SIM entries feel free to do so. To change the PIN or PUK just punch in he following (option 1) codes into your phone’s keypad:

  1. Change SIM Card PIN   ** 04 * CurrentPIN * NewPIN * NewPIN #
  2. Change SIM Card PUK   ** 05 * CurrentPUK * NewPUK * NewPUK #
  3. Change SIM Card PIN2   ** 042 * CurrentPIN2 * NewPIN2 * NewPIN2 #
  4. Change SIM Card PUK2   ** 052 * CurrentPUK2 * NewPUK2 * NewPUK2 #

Note: Although I’ve done this many, many times, please understand that I won’t be held responsible for any of your typing errors and consequent lockouts :)

Digitization of Telecommunication Links

These days, phone calls, text messages, fax, data and even digital TV use the same communications backbone as the internet. Some Telco’s may have communication channels which are dedicated to the internet (data) and others to phone calls, but because it’s all just 1’s and 0’s nowadays, more often than not these two channels are be multiplexed across the same medium.

Digitization has allowed Telco’s to share audio and data across a single communication channel without the need to maintain two separate sets of infrastructure. As a result, most modern service providers have fully digitized their telecommunication links (backbones) and global interconnects to realize huge operational cost savings.

The differences between traditional phone calls and internet data are virtually non-existent today. Just look at what can be achieved with computer programs like Skype or Gtalk. For instance, Skype allows anyone to sit at a computer and communicate with a person on another side of the world by using Voice over Internet Protocol (VoIP) or better yet, allow a computer user to connect to a person who is using a physical phone.

Now that we know that the infrastructure is fully digitized end-to-end, how is it that the consumer is able to pay a tiny, flat monthly fee for unlimited internet access in the home and yet can’t receive the same deal with telephone roaming? Technically speaking, there is nothing stopping the service providers from offering this right now. Instead, they hide behind a needlessly complex tariff schedule and rules that try to justify the high roaming charges.

Although regulators and consumer watchdogs have mandated that Telco’s must document the roaming charges and make them available to any person, it doesn’t allow for a uniform experience because the roaming rates change depending on which country you visit or the network your phone decides to connect to.

Some service providers send text messages alerting their customers of tariff rates while roaming on a particular network. I admit, it is nice to know ahead of schedule by how much you’ll be ripped off while roaming but it still doesn’t address the inexcusably high fees.

Imagine for a moment that the internet connection you have at home will now be subject to a new billing structure. For the sake of this argument, you are told that anything you download from Europe will be free, however, downloading U.S. content will cost you 10c, Canadian content 15c and Chinese content will be charged at 20c per megabyte? The average user would have a very difficult time knowing where each webpage component is being downloaded from (perhaps adverts from the US, images from China and RSS feeds from Europe).

It’s a ridiculous model that places the burden of tracking arbitrary tariffs on the consumer – none of whom are able to know ahead of time where the content was coming from until the bill came at the end of the month. But this is exactly what is happening with today’s mobile roaming.

There was a case in Germany some years back, where a man living close to the border was frequently “roaming” even though he never left the country. This was largely due to the fact that he lived closer to the antenna tower on the other side of the border than the one deployed by his service provider. In this case, the stronger signal will always receive priority unless the phone is manually locked down to a particular network. There are countless other such cases related to this type of “Fringe Roaming” across various regions of the globe.[1]

Is there Hope for the Consumer?

The good news is that there seems to be a large scale push from consumer groups and governments across the globe to curb this type of profiteering. Just recently, operators like MTN, Airtel and Vodafone have expanded their “free” international roaming zones when receiving calls or text messages.

The Saudi Telecom Company (STC) announced that it has launched an internet roaming control technology that helps the consumer. The technology “notifies the customer when the Internet service is being used, monitors the data consumption, and provides notifications of the roaming rates according to each operator, in addition to invoicing the roaming Internet service immediately, as if it were local usage,” said Abdulaziz Al Shamsan, Director of Marketing Communications and PR at STC’s Personal Sector during GITEX Dubai 2012.[2]

Similarly, Vodafone has deployed a system called Data Angel which will prevent its customers from running up unexpected bills while surfing the web or checking email on smartphones or computers when traveling overseas.

While both services are steps towards good corporate citizenship and responsibility, alerting your customers and even disconnecting their data roaming service once a usage cap is exhausted is not the same as providing affordable rates.

Back in 2006 the European Commission (EC) passed several regulations that caped the rates operators can charge each other while roaming in the EU and limited the tariffs an operator can charge from customers. The Eurotariff (as it is now called) applies to all 27 Member States of the European Union and in 3 European Economic Area countries.

Mobile phone operators couldn’t fight the EC and instead tried to make the best of a bad situation, kicked their PR machine into high gear and proclaimed that they are “slashing” roaming charges in the interest of their customers. Who are they kidding? Telco’s would have quite happily kept rates as they are but were forced to go to market with the new “slashed” tariffs as quickly as possible in an effort to woo clients away from competing operators before they too try to do the same — an attempt to compensate for lost revenue.

Following an investigation conducted in 2010 into the costs associated with communicating within the Single Market, the European Commission now intends to implement further regulations to ensure that the difference between roaming and national prices should approach zero by 2015. In a global and highly-mobile marketplace, countries are uniting in an effort to curb these excessive charges and demand an affordable service.

Ultimately, though, it’s all about corporate profits and Telco’s are resisting any quick changes without alternative revenue streams.

Despite sharp reductions in broadband internet access costs across the world and increased penetration of mobile broadband, the mobile phone operator seems to be the last bastion of the greedy service provider.

[Title photo credit: Stephan Geyer / Foter / CC BY-NC-ND]

Footnotes
  1. This types of Fringe Roaming tends to occur in locations where country densities are high or the distance between country towers is relatively small and in proportion to high population densities: such as those between US and Canada where there is little cross-border cooperation between Telco’s. Island countries such as Australia and New Zealand, as an example, don’t suffer from these types of issues because of their relative isolation and its population is virtually unaware of such incidents. ^
  2. GITEX (Gulf Information Technology Exhibition) is an annual consumer computer and electronics trade show which takes place in Dubai, United Arab Emirates. It is known to be one of the largest technology exhibitions in the Middle East. ^

Bibliography

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8 Comments → “The International Roaming Mobile Phone Rip-Off”

  1. Dirk M 4 years ago   Reply

    Dual Simms have been around for some time had a phone 5 years back, by the way which country are u in That for a small fee allows unlimited Internet ? Not Australia that’s for sure ;)

  2. Dr.Shem 4 years ago   Reply

    Hey Dirk, Many places in Africa offer uncapped but throttled plans. True, dual SIMs have been around for a while, but for various reasons they haven’t made it into mainstream devices except through modified inserts. I’m in South Africa till Wednesday and then back to Dubai.

  3. Jovita N 4 years ago   Reply

    I agree that these people scam us. My last Month’s phone bill was $600+ due to the fact that I was on vacation in Africa. That stinks!! But with a background in the Telco industry, having worked at Verizon, I can assure that the Telcos have costs each time they roam you around. There are generally two costs: 1 due to differentiating government regulations and taxes. The irony in your article is that it is the government sector that has to start by relaxing arcane regulations. The second possible explanation is that the Telcos use others’ GSM gateways to connect. It’s called routing cost. So when a call is placed and before the SS7 hands it over to the STP, the routing GSM Gateway needs a cut. Carriers shop around for the least routing cost. The most expensive regions of the world today are regions that have not moved to upgrade their GSM gateways to VoIP based GSM gateways. They are still using Satellite based Gateways for international roaming. Notice that services such as Skype and Lync bypasses both regulations and Satellite routing. I’m sure that those “free services” you mentioned in your article are routed over the Internet using VoIP based GSM. This cost that you mentioned have led to the proliferation of “SimBoxes”(SB). SimBoxes are “rogue devices” deployed by 3rd parties aimed at undercutting international roaming costs. They are very popular in developing countries and the drive for their elimination, also known as “revenue guarantee” is huge. My conclusion is that as Telcos upgrade to Internet based based GSM and if SB can be legit, international roaming charges will slowly disappear.

    • Dr.Shem 3 years ago   Reply

      I’m looking forward to the day that roaming charges disappear. There really isn’t any excuse to be charging such rates in this day and age.

  4. Serge S 4 years ago   Reply

    Yep, it’s really nasty roaming charges across countries and I was quite amused to see huge $$ they have here in the US. The EC did the right thing and I hope it’ll eventually affect other regions.

  5. Dirk M 4 years ago   Reply

    I can sort of tolerate roaming charges but data should be cheap everwherey even thoughI under stand ur point shem call = data but just give us pure data I mean an sms seriusly 40c tos end from overseas ? not even one kb !

    • Dr.Shem 3 years ago   Reply

      Yep, agreed. Where a 160 character text message (160 bytes) costs more than the daily costs associated with a 10 Mbps residential internet connection, you must wonder why we’re paying so much.

  6. Gail Garrison 3 years ago   Reply

    The charges for roaming calls have been defined into the roaming charges during negotiating and agreement processes with the roaming partners and these vary with different roaming partners around the world.

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