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Aside – International data roaming

Posted by Preston on 2009-05-19

Last week, between Thursday and Sunday, I was in New Zealand. Of course, I did the normal thing for an iPhone user before boarding the plane in Australia – I disabled all data related access. 3G, off. Data roaming, off. Push notifications, off. Fetch notifications, off. Even deactivated all mail accounts. With that I had a data free time. I was still able to make notes, set up new calendar entries locally on the phone, use Things and play the occasional game, but to all intents and purposes unless I was near WiFi it was like an electronic form of sensory deprivation.

All the while through my trip though, I found myself looping through 2 thoughts:

  • Needing to do this sucks
  • Do they think they’re kidding anyone on how much they charge for international data roaming?

I realise that the costs associated with laying undersea cables between landmasses, even those that are shortly separated such as Australia and New Zealand, are non-trivial. Just a casual search on Google finds articles such as this one, which indicate the price of laying cables is high. Obviously, the costs of laying such cables must be recouped in some form or another.

Let’s be honest though, it doesn’t make sense to try to recoup those costs solely via international data roaming costs on 3G networks though. Even though that’s honestly what some carriers seem to price for. These charges are often in the order of $10 to $20 per MB of data.

There are, in reality, a few descriptions other than “fair and equitable recouping of costs” that are perhaps more appropriate to the prices charged by telecommunications companies for international roaming. The ones that immediately spring to mind are:

  • Price gouging
  • Cartels running riot
  • Rape and Pillage
  • 90º to reality

The EU has recently introduced legislation to cap the amount that can be charged for international data roaming – currently €1 per MB, with a planned decrease to €0.5 per MB.

Let’s be honest as technical people talking amongst ourselves, if nothing else – even these costs amount to price gouging and rape/pillage operations by telecommunication cartels intent on squeezing every last cent they can for services that we pay the barest fraction of the price for when accessing within our own countries. I believe that 10c per MB accessed overseas would be more than sufficient to guarantee successful recovery of true operational costs (as opposed to imaginary costs incurred by excessive cross-company gouging) while still leaving enough room for a sufficient profit.

The craziest thing about the lot is these artificially high prices seem to mostly exist to charge tens of thousands of dollars to the occasional poor sucker who, unaware of the prices, accesses data “as per normal” when overseas. That makes the occasional massive spike in data revenue – but, it’s normally associated with bad press, substantial reduction in bill* and possibly future loss of customer.

If they charged more realistically though – say, 10c per MB or maybe even initially just as low as 50c per MB, they’d make more money because more people would decide that the lower, and more realistic cost, was bearable in order to maintain the flexibility and lifestyle presented by pseudo-permanent data access.

It seems that telcos are still yet to learn that the days of “greed is good” are coming to an end.


* And let’s be honest, if a bill can be reduced from say, $10K to $300, that in itself is a prime example of the gouging that occurred in the first place!

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