Data Roaming Charges

March 5th, 2012 at 9:04 am by David Farrar

Tom Pullar-Strecker reports:

It was nothing more than any holidaymaker might do.

Wellingtonian Magnus O’Neill pulled out his iPhone while holidaying in the Cook Islands, checked Facebook and used Wikipedia to research his hotel and what tropical fish he might see.

The online checks would have cost him about $4 in New Zealand. Instead he now faces a bill from for $2000.

His roaming consumed a modest 70 megabytes of mobile data. But what Mr O’Neill didn’t realise was that he was being charged $30 a megabyte, a price he believes was “extortionate and unfair”.

It is. This is an all too common story.

In Europe, regulators were forcing the wholesale price of data roaming down to 5c a megabyte, he said.

Which is plenty, considering the cost of international bandwidth wholesales at around 5c a gigabyte. The problem is that when you go overseas with your mobile, you have little choice but to pay or not use. However something I now do is acquire a local sim card. It will give you a few GB of data for well under $100.

Telecom spokeswoman Stephanie Fergusson said Telecom had offered to write off $977.87 of Mr O’Neill’s bill, which he had run up before he received a delayed “courtesy” text from Telecom advising him that New Zealand data rates would not apply during his visit to the Cook Islands.

They should occur near instantly when you land.

This month Telecom will introduce a new service that will let customers set their own dollar limits for data roaming that will stop them from racking up bigger bills unless overridden. It will also text customers when they consume more than 2Mb, 60Mb and 100Mb when roaming overseas.

This is a step in the right direction. But the limits are ridicolous. No person in their right mind wants to use 60 or 100 MBs. You need steps in between 2 and 60. I would suggest available limits should be 1 MB, 2 MB, 5 MB, 10 MB, 20 MB, and 35 MB (which is $1,000 in some countries), 60 MB, 100 MB.

I am assuming that Telecom means megabytes (MB) not megabits (Mb). The Dom Post uses Mb in that last paragraph, which normally indicates megabits.

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34 Responses to “Data Roaming Charges”

  1. tvb (4,517 comments) says:

    These charges are beyond belief. I intend to switch my phone off and hopefully clear emails using a cafe or buy a local sim, thanks for your advice. This problem is well known and smart phones are a trap as they download stuff automatically.

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  2. peterwn (3,312 comments) says:

    A tow truck firm apparently suggested that a private parking lot remove its ‘pay and display’ machine and forbid parking. The towie reckoned he could make more money for the lot owner simply by towing away vehicles parked there. Seems Telecom and other mobile providers are using a similar business model for international roaming.

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  3. krazykiwi (9,186 comments) says:

    It was nothing more than any holidaymaker might do

    Nonsense. Tens of 1000’s of travelers don’t roam, or choose buy local SIMs having first established what their data charges will be. Magnus O’Neill wasn’t one of them, to his cost. That’s life.

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  4. bhudson (4,741 comments) says:

    I agree the rates we are charged for international roaming are too high, but there is a responsibility on the consumer to check the rates before they travel.

    If someone filled their petrol tank without checking the price per litre first, would we expect the retailer or oil company to refund near 50% of the charge? (And $2.25+/litre is also an example of a charge that is too high.)

    Which is not to say the roaming charge rate is reasonable, merely to reinforce that Mr O’Neill placed himself in his predicament by not checking the rate before he left NZ.

    [BTW, could he have not used the internet service at his hotel to do his tropical fish research? Also if his hotel is renowned enough to be referenced on wikipedia, it would be reasonable to expect that they have a wireless service for their guests that he could have connected his iPhone to.]

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  5. coventry (322 comments) says:

    Wait wtf.. If I go overseas I don’t get to use my free calls & data from my plan when I use another provider ? Talk about a village idiot.

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  6. insider (1,028 comments) says:

    HAng on, how do we know it’s not Cook Islands Telecom seeing a nice little earner levying a huge interconnection charge on pathetic foreign tourists who are incapable of not facebooking their every move? Who can blame Telecom for chucking some margin on top. Fools and their money…

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  7. labrator (1,850 comments) says:

    I’m fairly confident that the wholesale cost of a Gb in the Cook Islands is significantly different than the wholesale cost in Europe. Cook Islands internet is supplied via satellite after all. Your FaceBook status update went to space and back. Rejoice.

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  8. dime (10,133 comments) says:

    the roaming charges are criminal.

    Aussie/US/ Hong Kong arent too bad though.

    US – they crage $8 a meg for the first 12.5 then the next 87.5 are “free”.

    On my last trip to the US i used 80meg.. i can live with $100.

    I found my android a bit data hungry though. i guess its background services.. i turned my 3g off when i wasnt using it.

    It was the only time i missed my blackberry

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  9. Graeme Edgeler (3,290 comments) says:

    I am assuming that Telecom means megabytes (MB) not megabits (Mb). The Dom Post uses Mb in that last paragraph, which normally indicates megabits.

    Yeah. The number of times I see people talking about millibits (mb) does make me wonder whether I should pay any attention to what they’re saying.

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  10. Chthoniid (2,047 comments) says:

    I’m a little surprised travelers are still getting caught on on these charges.

    Like many an experienced traveler, I tend to buy a local SIM card and maximise use of wifi when it’s available. Of course, traveling to places where there is absolutely no internet connections at all is also very economical on data.

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  11. labrator (1,850 comments) says:

    Yeah. The number of times I see people talking about millibits (mb) does make me wonder whether I should pay any attention to what they’re saying.

    KM/H must really get up your nose then… Kelvin Mega per Henry

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  12. Peter (1,723 comments) says:

    I turn data off on the phone, buy a local sim card for my ipad, and raise a middle finder to roaming data charges. When they charge a reasonable rate, I will be happy to use my NZ sim offshore.

    Until then…

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  13. Martin Gibson (247 comments) says:

    Telecom is like an abusive partner we keep going back to because they keep promising to change everytime we leave.

    Like anyone who had had a mobile phone in the UK or Australia, I loathe Vodafone Telecome and their price-gouging ways. Was about to switch from Vodafone to 2deg when they called me yesterday and suggested a plan change to reduce my bill.

    I thought, “Oh, they’re trying to change; they don’t mean to be extortionate, it’s just my fault for the way I use my phone . . .” and stayed.

    I guess I’m going to have to wait until my self esteem is high enough to realise that I deserve better.

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  14. tas (649 comments) says:

    Roaming is a joke. One should be able to use one’s phone anywhere in the world without having to worry about the cost any more than in NZ.

    Carriers will have to sort out their act at some point, as it is getting easier and easier to buy a local SIM and bypass the whole fiasco.

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  15. labrator (1,850 comments) says:

    You might want to put the Cook Island’s internet costs into your outrage calculations.

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  16. krazykiwi (9,186 comments) says:

    One should be able to use one’s phone anywhere in the world without having to worry about the cost any more than in NZ

    Riiiight. And visitors from, say, Vietnam, should be able to buy dinner in your restaurant for $3? Or perhaps you can use your Super Gold Card for a free Dover-Calais crossing?

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  17. tas (649 comments) says:

    krazykiwi: There is a big difference between a restaurant and cellular data. Carriers are charging you $30 for something that costs more like $0.03.

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  18. krazykiwi (9,186 comments) says:

    tas – no denying it’s expensive… but how do you know what overseas carriers’ costs are? And perhaps more to the point, why is that relevant? Many businesses the world over charge for value as perceived by the purchaser. The narriative here suggests carriers should be forced to base their charges on cost plus. I disagree with that, as strongly as I dislike the roaming rates.

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  19. Mr Gronk (45 comments) says:

    krazykiwi, indeed. On the other hand, I wonder how much international data is purchased by customers who really want international data and are prepared to pay through the nose for it, and how much is got by ambushing ignorant or thoughtless travellers. I’m not excusing a failure to do the research on the customer’s part, but one wonders how long the current pricing structure would be maintained if customers had to definitely opt in and were presented, in advance, with the costs.

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  20. CJPhoto (227 comments) says:

    I think there should be a test before you qualify for a “smart” phone. This guy was dumb so deserves a Nokia 6110 or a big bill.

    Extortionate – yes but this is well known.

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  21. tas (649 comments) says:

    krazykiwi: There is definitely price discrimination involved. There is a hundred-fold difference between what locals are paying and what visitors are paying. And that should change.

    To be clear, I am not advocating knee-jerk regulation and price controls. Competition should drive down the cost. However, there are issues that may need to be looked at. In particular, I’d like to know why roaming prices are so high. Who gets the profit? your provider, or the local carrier? Are anti-competitive practices keeping the price high?

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  22. voice of reason (490 comments) says:

    70mb to only view Wikipedia & Facebook. ? – Doesn’t ring true.
    Wiki is pretty lite to view – majority text & small thumbs
    Facebook – usually defaults to m.facebook – cut down version when opened on iphone.

    Telecom / Vodafone often cave in on this situation – seems all you have to do is whinge to a newpaper.
    The cost of overseas roaming is pretty well known to most.
    When you turn on that setting on an iphone there is message displayed – “Turn roaming off when abroad to avoid substantial roaming charges…”

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  23. insider (1,028 comments) says:

    @ tas

    ‘High’ based on what measure? IS that based on some needy people’s view of what is their right and what they ‘should’ be paying? OR high based on perceptions that the costs and usage in a first world economy, using first world technology should be miraculously overlaid on a third world micro economy?

    And given that the vast majority of NZers (and everyone else) don’t travel to Rarotonga or further every year, I’d suggest it’s a pretty low item on the global regulation ‘to do’ list.

    Seems like it’s just a case of huge level of entitlementitis which, if I were a Housing NZ tenant, would be met with howls of derision. But, because I have smart phone, it somehow creates a whole new level of rights.

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  24. krazykiwi (9,186 comments) says:

    tas – my understanding, but don’t quote me, is that the local carrier bills and keeps. the unit price does tend to reflect term and spend commitment, which is why local customers on a monthly plan pay less per unit than do pre-paid customers. From the perspective of the local carrier when you are abroad, roamers offer lower commitment than pre-paid customers. despite this, it’s not about costs. it’s about percieved value, and as more and more price sensitive users travel with smartphones, the competative factors will kick in. That’s already happening between country pairs – IIRC Vodafone NZ have a good roaming arrangement with Vodafone Oz.

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  25. tristanb (1,127 comments) says:

    If you’re in the Cooks, buy a cheap CocoNet SIM card. I bought mine second-hand off some Irish girl when I was there, but they let you text cheaper than using roaming.

    This was 6 years ago, before every douchebag had to Facebook on his iPhone, so I don’t know how much data costs, but I’d guess it’d be cheaper than global roaming with Telecom.

    If i’m staying in a country for longer than a week, I buy a local simcard. It’s great if you’re travelling with others, as you can call/text each other on the cheap which allows people to explore more on their own without worrying about meeting places etc. It’s also great that no-one from NZ will know your number. I love having a phone that no-one calls.

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  26. Grendel (1,005 comments) says:

    What a crock. the guy deserves to have to pay the lot.

    I just got back from a weekend in OZ.

    Before i went i called telecom and got the full breakdown of roaming charges which they were happy to give.

    My phone (samsung galaxy 2) defaults to no roaming, so you have to go into it and turn on roaming, it also warns you when you do that you could get hit with high charges. so i used mine, turned it on to download email, then turned roaming back off. This stops you buring bandwith with the phone checking stuff all the time. i will look at prepaid sims next tme as it sounds interesting.

    You also get regular txts telling you how much data you have used.

    So this guy goes overseas, has managed to live under a rock and not seen any of the other roaming horror stories, does no research, burns through data like hes at home at his PC and then decides to complain as its ‘not his fault’.

    what a dickhead.

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  27. KH (695 comments) says:

    !. Good on telecom for reducing the bill. But they should not have billed it anyway. But good on them.

    2. They let you know they are going to charge you exorbitantly. So what. Doesn’t make it acceptable.

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  28. Steve (4,591 comments) says:

    Telecom need an image change,
    I suggest a name change from ‘Telecom’ to ‘Pelican’

    Then they can both stick their bills up their arse

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  29. voice of reason (490 comments) says:

    Perhaps Telecom have responded appropriately from a PR perspective but what of those customers who bothered to figure out what the charges would be before hand and may have adjusted their use. Can they now go back to telecom and demand 50% discount – I doubt it. Maybe Telecom should have given this guy his discount but locked his phone from roaming overseas ever again.

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  30. tas (649 comments) says:

    krazykiwi Says:
    tas – my understanding, but don’t quote me, is that the local carrier bills and keeps. the unit price does tend to reflect term and spend commitment, which is why local customers on a monthly plan pay less per unit than do pre-paid customers. From the perspective of the local carrier when you are abroad, roamers offer lower commitment than pre-paid customers. despite this, it’s not about costs. it’s about percieved value, and as more and more price sensitive users travel with smartphones, the competative factors will kick in. That’s already happening between country pairs – IIRC Vodafone NZ have a good roaming arrangement with Vodafone Oz.

    Yes. I think the equilibrium is more reasonable roaming prices and that we are moving in that direction. Carriers have high fixed costs and low variable costs, so they are price discriminating bastards.

    insider Says:
    @ tas

    ‘High’ based on what measure? IS that based on some needy people’s view of what is their right and what they ‘should’ be paying? OR high based on perceptions that the costs and usage in a first world economy, using first world technology should be miraculously overlaid on a third world micro economy?

    And given that the vast majority of NZers (and everyone else) don’t travel to Rarotonga or further every year, I’d suggest it’s a pretty low item on the global regulation ‘to do’ list.

    Seems like it’s just a case of huge level of entitlementitis which, if I were a Housing NZ tenant, would be met with howls of derision. But, because I have smart phone, it somehow creates a whole new level of rights.

    You are a moron. (i) Roaming charges are orders of magnitude higher than what locals are paying and what foreigners would pay if they bought a local SIM. That’s a joke (ii) How is that entitlement? Am I asking for a government subsidy for roaming? No. I’m just asking why.

    Also, yes., the guy should pay his bill. Although telecom has a responsibility to give abundant warning of the cost.

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  31. Pauleastbay (5,035 comments) says:

    It does make you wonder how any business of any note was established prior to the internet being set up.

    If you are on holiday use local services , if you are on business , business use only , lay off the porn.

    Dime says above 80 Mbs for a $100 is not bad, thats a lot of documents

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  32. gump (1,662 comments) says:

    labrator said:

    You might want to put the Cook Island’s internet costs into your outrage calculations.

    ———————-

    That link you posted shows a maximum tariff of 8.5 cents per MB.

    Telecom is charging 3,000 cents per MB.

    What is your point exactly?

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  33. slijmbal (1,236 comments) says:

    roaming costs are significantly greater to the telcos in terms of implementation, tracking and reconciling etc exacerbated by relatively low volumes and the need to have a million and 1 agreements individually negotiated or negotiated in small numbers. That aside, the charging model is very definitely a premium charge (even allowing underlying costs) what you can one as the bulk of roamers are seen as less sensitive to price, wrongly I believe. Almost sounds like the early days of mobile. The rationale being that dropping costs won’t make a lot of difference to profit. I think this rationale is wrong and that a decent roaming model would make the vendors more money but it’s very much in the too hard basket for many.

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  34. labrator (1,850 comments) says:

    That link you posted shows a maximum tariff of 8.5 cents per MB.

    Telecom is charging 3,000 cents per MB.

    What is your point exactly?

    Apples and oranges. Well missed.

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