I just thought I’d clarify a few things from your recent article. I work for a senior complaint handling team at one of the UK's main mobile operators.
One thing you haven’t made clear is that the price cap for data charges is only the maximum wholesale price different operators can charge each other, not what they can charge customers. So in theory the networks can still charge whatever they want. The EU is hoping that by restricting the charges between the operators it will force the prices down due to competition.
The price caps you’ve quoted are excluding VAT.
Also, the introduction of a spend limit or alert is currently technically impossible. Mobile operators use one of two systems when their customers roam:
Using the first system (also known as CAMEL), the foreign operator notifies the home network that the customer wants to make a chargeable event and the cost is deducted from their balance in real time. This system is mainly used for Pay As You Go customers although Pay Monthly customers can log on to these networks if the other type isn’t available in the country they’re visiting.
Using the other system which allows Pay Monthly customers to roam in more countries, foreign operators allow roaming customers to make chargeable events but they then have up to 3 months to bill the home operator. If a customer is roaming with one of these networks the home operator will not know how much the customer is spending and so cannot enforce a spend limit.
Based on the huge technical challenge at the network infrastructure level I don’t see how EU operators are going to have time before July to implement changes that will make sure they abide by the regulations.
For competition fans: the trouble is that roaming is a case of market failure. Most users choose their network based on domestic offers (where competition works passably well) and don't put roaming into the equation because they spend a small proportion if any of their time in other countries, and roaming tariffs are fiendishly complicated -- even a motivated person will have a hard time choosing the optimal roaming tariff. It is therefore in the interest of operators to overcharge for roaming, as most people will live with it. The market for fair priced roaming is just too small for competition to work. If switching operator for a weekend away was practical, maybe competition could work better...
Anonymous, 23 Apr 2009When my Dad came to visit me in Australia from Germany, he was roaming on Telstra via T-Mobile... moreI ain't any technical expert, though think about the convenience of roaming nowadays...
Someone from Germany is having fun in Australia. The network service provider in Australia probably needs to communicate back to Germany (constantly) to ensure the phone number from Germany is active, and "somebody" would receive and pay the bill.
Whenever I travel abroad, I usually forward all my calls to a special service, which would take the caller's message and convert to SMS, so when I roam I only receive SMS. Then call back (always cheaper using calling card and stuff) to save such hefty roaming charges...
Anonymous, 23 Apr 2009When my Dad came to visit me in Australia from Germany, he was roaming on Telstra via T-Mobile... morebut t-mobile has to pay roaming cost to the other provider aswell , thats why its not a domestic thingie ,
When my Dad came to visit me in Australia from Germany, he was roaming on Telstra via T-Mobile. He returned home to find a 700 Euro bill due to accepted calls. They charged him nearly AU$3.00 per minute for incoming and outgoing calls.
In the end I wonder what the bigger picture will be in the future. I mean, a phone-call only costs cents domestically. It's not like those pricks from T-Mobile need to work harder when international calls are being made.
Anonymous, 23 Apr 2009Unofrtunately there isn't enough competition in the mobile market business. Only a few giganti... moreI believe competition can be a major factor, if not the total solution.
For example, in Hong Kong, the government opened the bid for cell phone companies, and once we had "six" operators competing for population of near 7 million.
7 million maybe a big number for a city (other than Shanghai or Tokyo or London), though compare to almost any other country, that's just a small number.
After some acquisition and mergers, we still have 5 operators, 4 of which offer 3G service.
And the result to the end customers is:
- 2G monthly fee goes as low as US$4.49 a MONTH for 550 mins! (I'm not sure about places like India, though I believe at such price, HK may have one of the lowest monthly fee per min than many other places)
- "Official" 3G montly plan goes for about US$16 per month, though for most customers, after some "bargain" with the sales, now the monthly fee goes for about US$8.47. Most 3G plan includes over 1000 mins of voice call, 25~50 mins of video call, 30mb of data
- The one and only 2G operator offers US12.5 monthly plan which includes 1000 mins of airtime plus "unlimited" GPRS! This plan forces other 3G operators to introduce various data plan that goes for about the same price with about 100mb of 3G data and unlimited wifi. (shouldn't wifi be free anyway?) One 3G provider also offers US$8.7 for unlimited "internet browsing" (not for download)
Of course HK is a small place so the cost of building / maintaining the infrastructure is relatively cheaper than other larger cities. Still having 5 operators in such a small place has bought nothing but benefits to customers.
I do admit sometimes competition doesn't work, as I travel to US quite often, the so called competition to AT&T...namely ?-mobile, actually charges more with less coverage.
So the monthly fee for AT&T remains what I pay for a year in HK!
Hopefully this pricing will flow on for travellers to Europe from other countries.
Unofrtunately there isn't enough competition in the mobile market business. Only a few gigantic operators that are greedy sneaky bastards :)! And since we gotta have a cell phone we have to pay there hicked up prices.
The Canadian government should open up the market to allow more competition here because the triumvirate of companies is ridiculously greedy...
@Bakhti: There are already several companies in the European markets. People have become so dependent on mobile phones that they are willing to pay a higher price for such a thing. This is an expansionary shift in the demand curve. This is the best solution available now I'd say.
Bakhti, 22 Apr 2009EU is at it again: why Europeans refuse to understand that mandatory regulations imposed upon ... moreYou could not be more wrong.
Without the EU watching and regulating the phonecompanies the charges would only rise.
Because phone companies are known to make forbidden price agreements with each other thus keeping the prices equally high in Europe and making sure no competition can attack them by keeping the net to thereselves.
Should even be cheaper and should have been done 10 years ago already.
EU is at it again: why Europeans refuse to understand that mandatory regulations imposed upon carriers by lawmakers do nothing, but force the carriers to come up with new and tricky ways to sustain their earnings? Free market is a better regulator than any piece of legislation. Why is that that despite all mandatory price cuts the end user ends up paying the same buck for the services? Well, that is because heave regulation forces carriers to come up with sneaky fees to slam customers with. Let the market decide what the price for SMS/data traffic should be. If the lawmakers didn’t intervene, in this age of unprecedented access to communication network, the end users would find ways to communicate on cheap avoiding unjustifiably high roaming prices. This would eventually force the carriers to cut their prices for good, without sneaky fees. It just baffles me that the EU would impose these limitations on public companies – these are not monopolies, and had not the EU intervened every two years with some unnecessary regulations, I’m pretty sure there would be some stiff competition driving the prices down. Now that the carriers know that EU will set caps on their pricing policy, they will naturally lose any interest in competition. Sigh. Just like they say, the road to hell is paved with good intentions.
wish US congress had the balls to do the same. ATT tried to charge me $1.99/min to have my phone ring overseas even if I didn't answer it. they also charge that if they record a voice mail while your phone is on overseas.
A little math it's just too complicated for you, isn't it ?