Is there room for data roaming charges to go down?

Summary:Most of us now surf regularly on our mobile devices, but try doing that while overseas and you might grow a few extra strands of grey hair when you return home to a phone bill for hundreds of dollars--or thousands, if you're a Facebook stalker--in data roaming charges. So, a question begs to be asked: does it really cost our operators so much to support our need for ubiquitous connectivity?

Most of us now surf regularly on our mobile devices, but try doing that while overseas and you might grow a few extra strands of grey hair when you return home to a phone bill for hundreds of dollars--or thousands, if you're a Facebook stalker--in data roaming charges. So, a question begs to be asked: does it really cost our operators so much to support our need for ubiquitous connectivity? Or are they milking a cashcow that's only going to get bigger? In an 2008 interview on ABC News, ExxonMobil CEO and Chairman Rex Tillerson argued that the company's then-US$11.7 billion profits for the second quarter alone, simply indicated the scale of its business operation. Tillerson said: "We spend US$1 billion a day just running our business. So this is a business where large numbers are just characteristic of it." Back in 2005, executives from the world's top five oil moguls stood before the U.S. Senate to explain the rising cost of oil and their companies' growing profits, with a senator noting a "growing suspicion that oil companies are taking unfair advantage". In another visit to the U.S. Congress that year, Shell Oil Chairman John Hofmeister was quoted in an Associated Press report to say: "The fundamental laws of supply and demand are at work." With more cars on the road today, demand for oil will continue to spike, and with ongoing political crisis in the Middle East, oil supply is expected to be affected. In 2005, the five oil companies raked in over US$25 billion in profits between July and September, with crude oil prices hitting US$70 a barrel. Today, the pricetag has tipped just over $104 a barrel. In the last three months of 2010, Shell clocked US$5.7 billion in profits, compared to just US$1.2 billion a year ago. That amounts to a profit of US$1.6 million an hour. Full-year profits hit US$18.6 billion, almost twice what the company made in 2009, and there's "more to come from Shell", says its CEO Peter Voser. The world's largest oil company Exxon Mobil also saw its fourth-quarter profits spike 53 percent to almost US$9.2 billion, from US$6 billion a year ago. It made almost US$30.5 billion last year, compared to US$19.4 billion in 2009. Voser, however, refuted claims that Shell was profiteering at the expense of motorists, noting that a big chunk of its profits go toward government tariffs and oil production costs. The oil companies also argue that the high profits are necessary to finance future research into developing additional fuel sources and identifying cheaper ways to process oil. As with most debates, there are two sides to the oil discussion. One might argue that all commercial entities should be allowed to yield maximum profit from their business, letting demand and supply do their job, as Hofmeister points out. The other camp argues that the world's common folks depend on fuel for their livelihood and industry profiteering shouldn't come at their expense. "People we represent are hurting, the [oil] companies you represent are profiting," a U.S. senator had said during the 2008 Senate hearing. Do the same arguments apply in the debate about high data roaming charges? Especially since Web connectivity is increasingly deemed an important way to help close the world's digital divide. The European Commission (EC) last year commenced new legislation to prevent "bill shock" from global data roaming services, mandating that all EU operators must offer subscribers a cap on such charges. The EC will soon also be launching a public consultation into the cost of data roaming and to review the effectiveness of the current regulation, which is said to have significantly reduced the cost of roaming charges. It would be interesting to see if a similar initiative in Asia would help bring data roaming fees down, and whether mobile users in the region would welcome such efforts. To answer some of these questions, we're running an online poll that cuts across three global ZDNet sites in Asia, Australia and the U.K. to find out how readers in our respective region utilize mobile broadband abroad on their smartphones, tablets, laptops and other mobile devices. So, complete the survey and tell us if you think your operator is doing enough to deliver affordable data roaming usage and charges to subscribers who want to remain connected during their travels. We will discuss the results in a special report once the survey ends. Take the survey now!

Topics: Asean, Banking, Government : Asia, Government : US, Mobility, Tech Industry

About

Eileen Yu began covering the IT industry when Asynchronous Transfer Mode was still hip and e-commerce was the new buzzword. Currently a freelance blogger and content specialist based in Singapore, she has over 15 years of industry experience with various publications including ZDNet, IDG, and Singapore Press Holdings. Eileen majored i... Full Bio

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