Is there room for data roaming charges to go down?

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?

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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 based in Singapore, she has over 16 years of industry experience with various publications including ZDNet, IDG, and Singapore Press Holdings.

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5 comments
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  • READ THIS FIRST!!!:

    Data roaming charges = pathological price gouging.

    The methods used by telecomm companies are ABSOLUTELY down and dirty.

    CONSIDER:
    I called TMobile an hour ago. I am traveling from the Pacific Northwest up to Vancouver tomorrow, and I figured I'd check in to see what I needed to know about using my Android smartphone up there.

    Well, well, well.

    It seems that my phone is automatically set (defaults) to "ON" for Data Roaming.

    Guess how much it would have cost me if I didn't check? Over $10/MB. Except, HOW AM I TO MONITOR THAT???

    A) I have no control over the size of a webpage, links, or pop-ups. I would have NO idea how quickly the MBs would rack up - and it can easily go into the thousands of dollars. 10 minutes online could cost me $500!!! A total of 2 hours could cost upwards of $10,000.00!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! INSANE? YES!

    B) The limits of my regular (in-zone) data plan are set in gigabytes, NOT megabytes. Some cell phone companies quote data roaming in KB!!! This is ALSO INSANE. And unfair. And deceptive.

    C) For out of zone phone calls and texts, we are already gouged - upwards of a dollar per minute - and of course that is rounded UP, and EVERYTHING counts - if someone texts you (even spam) and for any voicemails recorded or, of course, calls taken. Is that enough for rapey telecomm? Nope.

    D) Not only is the bizarre $10/MB rate astronomical, but the absolute SECOND you connect, EVERY SINGLE INCOMING EMAIL is charged, too. How large are YOUR attachments these days? Even if they are zipped? Are you a graphic designer? Then your head might explode. One 10MB image - simply ATTACHED - to an incoming email, would instantly cost you $100. That is ON TOP of everything else.

    E) So, if you haven't turned your data roaming OFF (and few would know to do this or ask in advance), the SECOND you enter a roaming area, EVERY incoming/outoing email and attachment is charged at $10/MB. EVEN IF YOU DON'T OPEN YOUR EMAIL APP *OR* ANY OF THE ATTACHMENTS!!! (I wonder if opening them would double the charge?)

    F) Class action lawsuit? All I know is that I'm headed to TMobile's headquarters right after my trip. They only give a physical address to the corporate offices - no email. Think I'll charge them for my troubles.

    G) They claim that if you are out of zone, they text you to "warn" you, but the text does NOT explain the ridiculous charges. Few would assume checking their smartphone would cost them hundreds or thousands of dollars over the course of a few minutes or hours out of town.

    I am so glad that I'm neurotic and checked. Here is what I propose:

    1) It should be mandatory that Data Roaming defaults to "Off" on a phone.

    2) If you are at the edge of your zone, your carrier should be able to set up an auto text that tells you EXACTLY what is going on, e.g., "You are about to exit your calling zone and enter a roaming zone. Charges for every minute (and partial minute) of cellular phone calls will cost "X"; incoming/outgoing texts will cost "X", and for every 1MB of data streaming to your device (such as emails or web surfing) you will be charged $10.

    3) For border areas (a grey overlap zone) lower rates should apply.

    4) The charges should be about 1/10th or 1/100th of what they are now.

    5) Everyone should call Customer Service and ask to speak to a supervisor and explain that they will change companies until they find one that doesn't bait and switch them, leave out crucial information or rape their wallet.

    6) Turn data roaming OFF and only use your phone in emergencies when traveling. Instead, buy a different Sim card when out of the country. Or a prepaid phone/plan.

    7) Refuse to pay the exorbitant bill and threaten a lawsuit.

    8) Create bridge plans between countries/roaming areas, such as US/Canada, US/Mexico, various areas throughout Europe, etc.

    9) Put up signage at borders: TURN OFF DATA ROAMING ON YOUR CELL!!!

    10) Charge your cell phone company $10/minute every time you wait to get through to customer service, get disconnected, are put on hold, are not helped, are given shoddy information, drop a call, your equipment is faulty, etc.
    wietog
  • Also - allow for use of email OR Internet. At least one could "turn off" email when going online, rather than risk being charged for incoming junkmail or large attachments.
    wietog
  • Good points made by 'Noway'.

    Eileen, if you wanted some hot debate, and you got it kiddo.

    And yes, we are being milked. When somebody needs something really bad, they will pay for it.

    It wasn't too much different during the Opium trade era. They got hooked on the stuff, and would do anything to get it.

    But now it's legal. Government sanctioned telcos can charge consumer for digital access at exorbitant rates - and we pay, wittingly or unwittingly we pay.

    Hooked on digital. Blissfully cocooned.
    eapete-59bf6
  • Once you sign a cellphone contract, you give the company free drawing rights on your bank account. Roaming charges are completely ridiculous. It is much better to buy a prepaid phone in the country you are visiting, than to use a phone on roaming. In fact, it is much better to have a prepaid phone in the USA, where they cost half of what a contract phone costs.
    andyblue-3f8ee
  • Roaming Guard is unique application, which is useful for anyone who travels abroad, lives or works near a border, resides in national or regional roaming.
    CMIT_RomanP