Low-cost roaming has to be a moneyspinner

Summary:Customers think they are being ripped off by high global roaming charges. Now is the time for a smart operator to drop prices and reap the rewards.

commentary Customers think they are being ripped off by high global roaming charges. Now is the time for a smart operator to drop prices and reap the rewards.

Last week we showed how, according to a global ZDNet study, practically everyone believes global roaming charges are too high. It comes as no surprise to anyone who has tried to use a wireless device overseas. ("In other news, water is wet," said one of our readers.)

So how is the problem fixed? "Not easily," is the answer. Wi-Fi hotspots are used by many as a stop-gap solution — 77 per cent of respondents to the survey said they'd used them when travelling overseas. For many it's the only option — half are not allowed to use data roaming on a company account.

The real answer, of course, is for carriers to drop prices. Neelie Kroes, European Commissioner for Digital Agenda, is trying to create a single digital market within Europe, which might be great news for people who live there but not much help for those of us on the other side of the world. The European Commission already has caps in place; you need to be notified by the provider if your bill gets up to €50 (AU$69). They can still rip you off, but they have to tell you about it.

What is surprising is that a local carrier hasn't seen this as an opportunity to stand out from the crowd. Last year Australians took 7 million trips overseas (ABS stats), three-quarters were for a month or less. A smart operator — perhaps one with a global footprint — could offer lower roaming rates to grab market share. With people turning their phones off to avoid incurring hefty bills, they'd probably find they also made more money from it. Offering lower prices to New Zealand, which accounts for one in seven of our overseas trips, would be a good place to start.

Roaming survey results

The ZDNet study on global roaming asked people how their habits would change if data roaming charges were dropped significantly. The biggest change was web browsing; less than half of us surf the web on any device, but that would increase to around 70 per cent if prices dropped. People on their tablets or laptops would also do significantly more social networking, email and use of location services.

There would be shifts in behaviour, with applications that soak up heavy bandwidth too, but they are not in as much demand as the lower-capacity applications. So that makes it an easy solution for global network providers, doesn't it? Offer special prices for roaming packages based on the application type; for example, unlimited email, Facebook and Twitter, along with location-based services, and put caps on other data usage. It looks like that sort of offer would satisfy the masses — particularly those holidaying rather than away on business — and not break the bank for high-data transfers.

So who is going to be the first to grab the market opportunity? The need is there. People are angry. It looks to me like a no-brainer.

Topics: Mobility, Travel Tech

About

Phil Dobbie has a wealth of radio and business experience. He started his career in commercial radio in the UK and, since coming to Australia in 1991, has held senior marketing and management roles with Telstra, OzEmail, the British Tourist Authority and other telecommunications, media, travel and advertising businesses.

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