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Wireless roaming rates and meaningless choice

10 Sep
There's a reason the roaming gnome never uses a cellphone.

There’s a reason the roaming gnome never uses a cellphone.

With the CRTC looking into wireless roaming rates, Canadians can expect to soon hear a whole new set of talking points from the industry about why the sky really isn’t blue. Telecom consultant Mark Goldberg, in a blog post, gives a sneak preview of what some of those rationalizations will be in a rather silly comparison to shopping for a car.

As he puts it, it’s hard to go out and buy a new car with everything you might already want in it. Luckily, there’s an after-market that can help tailor your purchase to your liking, offering everything from GPS devices to remote starters. Isn’t it wonderful that all this choice exists?

The same holds true, he says, when it comes to wireless roaming. If your provider’s rates are too high, there are plenty of alternatives.

That’s technically true, although it’s too bad that car extras and roaming are nothing alike. While one market provides consumers with lots of simple options, the other involves limitations, extra costs and plain old hassles. There’s choice and then there’s meaningful choice, and there’s a world of difference between the two.

Let’s run down the list of these supposed choices. First up is Rogers One Number, which is not a bad option… if you’re a Rogers customer. If you’re with someone else, well then your choice is obvious: switch to Rogers! That’s easy to do, right?

Then there are third-party services such as Roam Mobility, which again aren’t entirely bad alternatives per se. Roam offers talk, text and 100 megabytes of data starting at about $4 per day, which is a good deal compared to what big carriers generally charge for roaming. The problem is, you either need to slip one of the company’s SIM cards into your unlocked phone, or buy one of its cheapo devices (phones are $49 and Wi-Fi hotspot sticks are $99).

In the best-case scenario, these options mean you either have to carry a separate device or juggle a second number. In many cases, it means arguing with your Canadian provider about unlocking your phone, paying a hefty fee to do so, or voiding its warranty and violating the carrier’s terms of service by jail-breaking it. Those are all some pretty sweet choices, huh?

I’m a frequent traveler and the option I usually go with is using local SIM cards in an unlocked phone. Fortunately for me, I write about devices and usually have an unlocked one lying around that I can do that with. That’s not a luxury most cellphone users have, although they do have the “choice” of paying $600 or $700 to buy a phone outright and then have it unlocked (hopefully). The CRTC’s upcoming Wireless Code of Conduct will require cellphone providers to unlock devices after 90 days or immediately if paid for upfront, but the regulator didn’t say anything about what carriers can charge to do so. Fees up to $75 haven’t been uncommon.

Still, even an unlocked phone isn’t a perfect solution. While getting a local SIM card in, say, the U.S. isn’t too difficult, it’s considerably harder to do in countries where you don’t speak the language. I can honestly say that my trying to get service on a trip earlier this year to France was a true exercise in comedy. But then again, I guess not learning French properly in high school was me exercising my choice as a consumer, right?

Last up, there’s the suggestion of Wind and its inexpensive roaming rates. I’m not sure what “inexpensive” means in telecom consultant land, but $1 per megabyte of data in the U.S. ($5 in the European Union) still seems pretty steep to me.

Generally, when you buy an after-market car item, you either drive up and someone installs it for you, or you attach it yourself. It’s relatively easy and hassle free. Conversely, imagine having to pay quadruple for gas in the U.S., or having to buy a secondary engine that only functioned there, or your locks not working while in the country unless you paid your dealer an extra fee. I imagine car owners would waste no time in pleading for regulations against such “choices.”

Here’s a crazy idea when it comes to wireless roaming: how about Canadians being able to use their one and only cellphones with the same single numbers in whatever countries they want at a reasonable cost without having to jump through all kinds of hoops? No one is expecting to use them for the same price as at home, but not paying through the teeth for the privilege would be nice.

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4 Comments

Posted by on September 10, 2013 in mobile

 

4 responses to “Wireless roaming rates and meaningless choice

  1. Jean-François Mezei

    September 10, 2013 at 12:49 am

    People are jumping to conclusions. I do not believe the CRTC is out to regulate retail roaming as we know it. It is far more likely to regulate wholesale roaming costs between canadian carriers.

    Consider the possibility that the CRTC endeavour may find that Rogers charges Wind more for roaming than it charges some foreign network. If I am not mistaken, Wind has already stated that Rogers charges it more than AT&T does. Such a finding would clearly lead to a conclusion of market failure since Rogers is using its marklet power to hurt its competitors.

    In a context where the small carriers are unable to survive/grow to provide sufficient competition, granting them regulated wholesale access to the incumbent’s network would give then instant national coverage and use of standard handsets, in exchange for paying low rates to access the incumbents’ networks. In essence, create a regulated MVNO environment.

    Secondly, with regards to the Wireless Code implementation of caps, if they find that Sasktel is charged $1/gig but charges $10,000 to its retail customers, it shows that a customer could consume 100 gigs while in USA before Sasktel’s costs hit $100, the ceiling it can charge to consumers. This gives Sakstel plenty of time to manually contact the customer or shut him down before Sasktel actually loses money on that customer. Sasktel has argued its ancient billing system is unable to implement the roaming caps until late next year.

     
  2. Michael Elling (@Infostack)

    September 10, 2013 at 8:32 am

    The virtue of wireless is that you can be all things to all people. The problem with wireless is that you can be all things to all people. Therefore “average” pricing generally wins out over zone-based or context based pricing because the carriers are mentally and financially lazy. Sigh. At $10 per gigabyte consumed as the going rate in the US (which covers cost of network, device subsidies, opex and acquisition), the $40/gb above seems awfully expensive for a roaming premium. If anything, roaming partners should lower their rates to induce transient traffic in their markets to sell incremental airtime at no additional marketing or subsidy cost. Especially when the true marginal cost of that gigabyte is between 10-30 cents on an existing network and the “roaming interconnect costs” are 1-4 cents. Dumb and dumber!

     
  3. Roamin' Holiday (in hell)

    September 10, 2013 at 11:05 am

    A phone connected to a local tower or a tower in another country sends the same amount of data. Once that data exits the tower and proceeds over the network, the cost of sending those bytes anywhere is pretty much the same globally. It’s minuscule.

    If I can pay a monthly fee to my ISP and send and receive vast quantities of data anywhere in the world, then why does cellular data cost hundreds of times more while roaming? Heck, as a pre-paid customer on TELUS, I’m paying $2048/GB so we’re taking it up the rear domestically too.

    The EU has reduced roaming charges by over 90%, I believe, so we can too.

     
  4. Adam K. Bacsalmasi

    September 10, 2013 at 11:47 am

    We’ve recently launched a new service in Canada that tries to solve this problem by making it easy and affordable for travellers visiting Canada to connect to our local networks.

    One issue that often gets overlooked is that the Big 3 won’t allow travellers to Canada to buy a local SIM card when visiting Canada, they require a Canadian billing address to create an account. Once you take into account the price of a SIM card and the activation fee, things get pretty expensive.

    We’re trying to fix that. Visit http://www.similicious.com for more info.

     
 
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