ComCom: Don’t forget mobile roaming rates

Mobile phone termination rates are under intense scrutiny by the New Zealand telco regulator, the Commerce Commission, which has pressured Vodafone and Telecom into a binding undertaking to lower the amounts charged for landing calls on their networks.

It'll be interesting to see if this leads to lowered retail pricing for voice calls, so that people can use their mobile phones a bit more for the purpose they're designed for. Thanks to high call charges, New Zealanders have been weaned off voice calls, something that's apparent mobile usage figures from the GSMA, a mobile telephony industry organisation. For the third quarter of last year, New Zealand is said to have the sixth lowest amount of monthly minutes on average per user, after the Philippines, Cambodia, Sao Tome and Principe, Morocco and Kenya.

The global average is 288 minutes according to the GSMA, but New Zealander mobile phone users don't use anywhere near that number. I don't think it's because Kiwis are a taciturn bunch either.

While there's some debate as to what MTR regulation or forced  lowering of these will achieve, the ComCom really should get together with its international counterparts in Australia, Asia, the EU and the US and have a think about roaming rates for mobile phones.

I was reminded of how high these are by analyst Derek Kerton's story in RCR Wireless recently. Kerton attended the Mobile World Congress in Barcelona, and tried his best to avoid getting stung by high roaming rates, but failed.

Think about some of the numbers he quotes in his story. American charges for domestic cellular voice calls are on average eight US cents per minute; head to Western Europe, and the charges rise to US$1.30 per minute or so. As Kerton points out, that's a 1,625 per cent mark-up.

Data charges jump even more when you head overseas - Kerton's example shows a 341,300 per cent increase - so the best advice for travellers is to leave their mobiles at home, especially Internet-enabled smartphones or face financial ruin.

A Vodafone New Zealand customer on the You Choose 600 plan going to Spain like Kerton did would be looking at paying $2.47 a minute for voice calls and between $10 to $30 a megabyte for data. Receiving calls cost $1 per minute, and SMS are 80 cents each to send. The You Choose 600 plan costs $225 a month for 600 minutes, which cost 37.5 cents each, so the mark-up isn't quite as staggering as in Kerton's example, but we're still talking about a cool 657 per cent bump up for voice calls made overseas.

Telecom XT customers on any post-paid contract are charged between $3.40 to $4 a minute for making calls, and a dollar a minute to receive them. Texts costs eighty cents to send as on Vodafone, and data is $20 a megabyte. Let's say you're on the One Rate 400 plan that costs $150 for 400 minutes, or 37.5 cents each; using your XT mobile overseas means a 907 per cent cost increase for voice calls.

Ouch.

Update I've been told that Vodafone offers roaming in Australia for NZ customers at national rates.

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