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Market dynamics in Australasia are in the press these days with several articles hitting the news in the last day featuring radical changes in Roaming fees in the market, contrasted with the TPP plans for EU style Regulation among its members – this is a market ripe for change. Some facts about this part of the world:

  • Asia is a very fragmented region, spending power is different from country to country. LTE in some nations more advanced than others
  • Self Regulation more likely than prescribed by regulators
  • M2M is something governments are pushing for Smart Cities and Nations
  • Voice Roaming is under threat, VoLTE is interesting, but still some hurdles
  • Quality is important: 1) To provide as high level as possible 2) because its believed that it will bring greater usage and therefore revenues

Samples of Regulation impact from around the world…

Slide05

 

 

 

PC Authority

Plus advice on how to make the most of mobile connections overseas.
Australians are some of the worlds’ most prolific travellers, with over 70% of us holding passports. With flights cheap and potential destinations a’plenty, it’s no wonder that international roaming bill shock has been one of the biggest bugbears in regards to travel costs over the past five years. The current crop of smartphones are data destroyers – Apps are bigger, mobile networks are faster, more content is available online and you have a lot more spare time to waste on your phone while on holiday. Sadly, for the consumer at least, governments and carriers just haven’t really kept up when it comes to rates.

There’s been a lot of too and fro as the issue has come to fore over the past couple of years in particular, with the major carriers attempting to soothe much of the anxiety their customers have gone through. I myself had a spectacular case of Bill Shock after I got home from my Honeymoon in America – almost $3000 in roaming fees, even after sticking largely to Wi-Fi and turning roaming data off except for in the most stringent of circumstances (One Hotel’s Wi-Fi was so dismal I had to tether to my phone to do banking and travel booking). I negotiated this down to $1000, but it left a very bitter taste in my mouth.

All three of our top tier carriers in Australia – Telstra, Optus and Vodafone – all offer some sort of bundled travel “pass” or “pack” for a small daily cost. In most cases, you generally pre-pay for the number of days you require, and are granted a small data allowance, and from a voice perspective, unlimited calls and texts. This is a worthy change from the staggeringly poor rates of old, but are we actually getting good value where it really matters – Data? I took a look at the current slate of offers.

Vodafone

Vodafone, hands down, offers the best roaming offer of any Australian carrier. Not only that, but it’s simple, clean, and works in 50 of the most popular travel destinations, including Eastern Europe, Indonesia, Thailand, South Africa, the US, UK and NZ and more.

So how it does it work? Customers simply turn on $5 Roaming and for, you guessed it, $5 each day they have access to their plan benefits while overseas. So if you’re sitting on a generous 10Gb allowance, you can watch Netflix on the shuttle bus while the rest of us all huddle around the weak Wi-Fi flame, scraping out 15kb/sec pittance so we can look at a very slow loading Facebook.

Outside those countries, it becomes a little more standard – $1/minute for calls (which ends up about the same as in Australia when you include flag fall) and $1/Mb. Keep in mind that this is over a third of the price better than Telstra and a bit more expensive than Optus. It may also have something to do with Vodafone’s much wider global reach, giving them a better hand in negotiations (they have networks in 22 countries, as well as interests in others).

Telstra

Australia’s biggest network used to have some of the highest data roaming rates in the world. Considerable market pressure has pushed them to work on reducing these rates and the result is their “Travel Pass” system. While a markedly better option that their old “pay us by the minute or megabyte” setup, the Pass system is significantly more complicated than Vodafone.

To be clear, this system is changing on the 3rd of December, so I will use their new rates with a comparison to their old ones.

When you land in a new country, Telstra will send you a Text that lets you know roaming is activated. They’ll give you basic pricing information (Which can be as high as $4.50/minute for calls and $3/Mb for data in some countries) as well as the offer to buy a Travel Pass. On the old system, Travel Passes used to be divided into two Zones, which was fairly simple. One for NZ, Indonesia and Thailand, and another for 34~ other countries.

You could get 3, 7, 14 or 30 Day packs. Broken down, it worked out to around $10/day for unlimited calls and text, and 50mb of data. Next to Vodafone, it’s not great value. You can’t just get a pack for a single day, or between 7 and 14 days. If you’re travelling for 8 days, well, you’re up for a hefty wasted cost. MMS’s are not included. On the plus side, excess data was only 3c/Mb when you were on the pack.

Telstra’s new updates stretch the number of Zones to 3, and increasing the daily data allowance to 75mb. The kicker? Excess data is now 10c/Mb which more than quadruples the price of a 1Gb of data from $30 to $100. New Zealand in its own Zone with a much cheaper rate, halving the daily cost to $5.

Zone 2 is broadened to include more of Asia, including Brunei, Singapore, Taiwan and Japan, keeping the original $10/day price. Unfortunately for Zone 3, which is basically “Everywhere else”, the cost is now $15/day.

Personally I feel this update misses the point somewhat. Sure, there’s more data, but it’s more expensive to boot. Telstra also sneakily hiked the excess which I’d say the large majority would have to utilise. It’s moving in the wrong direction entirely and the customer response on its announcement page largely speaks for itself.

Optus

On the scope of value and ease of use, Optus sits somewhere in the middle. While it still uses a Travel Pack system that is very similar to Telstra, it simplifies things by charging a $10/day flat rate with a 50mb limit and unlimited calls/texts. The pack works in all “Zone 1” countries, which to Optus’s credit, is everywhere other than Vietnam, South America and Africa.

Optus allows this data to be pooled – so if you buy 5 days of packs with a 250mb limit, and use it all on day one, you simply just need to buy more days for more data. Outside of this, the pay as you go rates are a little wonky but still the cheapest of all the carriers – $1/min for calls, 50c for texts and 50c/Mb to the US, for example. Its marginally better than Telstra’s if only for the ability to buy packs as you need them and for the breadth of coverage on a single zone.

Most importantly, this system would have stopped me from experiencing bill shock, and that’s probably one of the biggest take homes from these systems. Outside of Vodafone’s obvious attempt at being consumer friendly and providing exceptional value, Optus and Telstra are out there saying, “Yeah sure, here’s a cheaper way to go. It’s not cheap, but it’s a way”.

Virgin Mobile

Virgin has decided to avoid the daily charge route by simply offering a competitive Pay as You Go option. A one minute call to Australia is 42c, a text is 15c and data is 12c/Mb. The problem with this system is that you’re almost certainly likely to make calls and use data on your phone when overseas, and this rate system just doesn’t stack up. 50mb of data would cost $6 on its own, where for another 4 dollars you could have unlimited calls and texts with Optus, and $1 less would get you full access to your almost certainly generous cap plan on Vodafone.

Kogan Mobile, Aldi Mobile, Boost

Be aware that none of these services offer roaming, at all. Your phone simply won’t work overseas if you are with any of these carriers. The plus is largely that they are all prepaid and you have the luxury of simply using another sim card while you are overseas anyway.

And yes, there are many, many other phone services out there, some that specialise on cheap rates for roaming, others (like Amaysim and Vaya) that are fairly popular and offer roaming albeit with fairly poor rates. My focus was on the large majority of Australians who use the largest 3+1 carriers.

Read the fine print

A lot of the information on roaming is still fairly confusing and hard to locate. Both Telstra and Optus’s roaming websites are split over three or four different pages, rather than one, simple page that lists info about passes, excess rates and whatnot. That said, both now have great maps that list each rate by country.

But in the end, the award still has to go to Vodafone. As a network that has taken an excessive amount of (mostly justified) flak in the last few years, it has made roaming charges as simple as they should be for every carrier. Telstra and Optus, please take note, things still aren’t good enough.

 

Sydney Morning Herald

Last August, Telstra’s new chief executive Andy Penn said that he and his executive team “would do what we need to do” to ensure that the group maintained dominance in mobiles, a business that raked in 41 per cent of Telstra’s revenue in the year to June. “If that impacts margins, well, that’s what will happen,” Penn added.

As it turns out, doing what is needed apparently includes price rises for international roaming mobile packages that make Telstra less competitive than its big competitors in key overseas markets.

Vodafone extends domestic plans for calls, texts and data to Europe, North America and elsewhere for $5 a day. Optus sells $10 a day packages in the same markets. Telstra has bumped its base pricing in Europe and North America by 50 per cent, from $10 a day to $15 a day.

The price hike raises questions for Telstra’s shareholders
It is matching Optus at $10 a day in Asia, and is offering larger data allowances and lower excess data charges there and elsewhere. That is likely to be viewed by many travellers as cold comfort, however. Telstra’s new download limits still hobble smartphone usage overseas.

The site that contains Telstra’s announcement was open for comments, and they were uniformly negative on Tuesday. “I travel for work all the time and run an entire organisation that uses travel passes regularly,” said one customer.

The price hike raises questions for Telstra’s shareholders, too. They know, and Telstra does, that prices, profit margins, sales volumes and profits are interrelated. The short-term question in that respect is whether Telstra gets more dollars out its roaming price hike than it loses as some customers switch telcos.

 

Short-term investors probably want Telstra to do what it has apparently done with its customer-alienating decision to ramp up roaming charges: favour profit margin over market share.

More patient investors might recall what Thodey said in 2010 as he was getting Telstra back on track. “We have two strategic options in front of us,” he told telco analysts.

“We could maximise our cash returns in the short term, cut costs and continue to lose market share, or we could take a longer-term view by investing, and that’s investing in customer service, simplifying the business and competing aggressively to retain and acquire customers.”

Thodey chose the second option in 2009, and stuck with it. Under Penn and his team, is it still Telstra’s strategic default?

The-TPP

TPP: Stuart N. Brotman for Brookings

The result of the European Parliament’s action last year finally will result in a phase-out of roaming charges. As of April 2016, there will be a regulatory cap imposed on mobile roaming charges, allowing individual EU carriers to charge only a small additional per-minute amount to domestic prices for calls, text messages and data use. By June 2017, there will be no extra roaming fee for outgoing and incoming calls, texts, or data usage. This means that users will pay the same rates outside their home country when traveling throughout the EU. National telecommunications regulators will be responsible for enforcing this regime on the carriers within their respective jurisdictions.

In contrast, the TPP seems to have absorbed the lesson that mobile roaming charge reform should not be dragged out for such an extended period of time. Upon enactment, the TPP will bind its 12 signatory countries to a common mobile roaming principle. The TPP does not mandate individual countries to regulate rates or conditions for international mobile roaming services, but if they do, the roaming rates must be the same as those charged to domestic customers.

This achieves the same outcome as the EU’s rules. In effect, a common aspect of trade agreements—most-favored nation status— has been adapted to international mobile roaming. It means that all TPP countries will receive equal trade treatment for mobile roaming, so that none are treated less advantageously than others. The TPP agreement also allows flexibility for countries that choose to allow market forces rather than government rate regulation to control roaming charges. For example, in the United States, T-Mobile’s Simple Choice Plan was launched this summer to enable unlimited data and texting, along with 20 cents-per-minute calling, for users traveling to over 140 countries.

The TPP allows for such competitive service innovation, while also requiring no discrimination when rates are regulated. It represents a sound policy approach to rein in international roaming fees. Increased demand for lower-priced mobile telecommunications services should help drive more overall trade among the TPP signatories. By doing this at the outset, the TPP’s mobile market should expand at a rapid pace.

 

ZDNET

A controversial decision by Telstra to up its global roaming charges during the Christmas period has been reversed by CEO Andrew Penn, with the telecommunications provider to lower its excess data fees while increasing data allowances.

“I am pleased to say we are changing two pricing decisions which we announced recently around international roaming and charges for paper bills,” Penn said in a blog post on Thursday.

“Good leadership means recognising when it is right to change decisions because it is the right thing for our customers. Price increases are often necessary and I completely understand why the teams that look after our products made the changes they did. But they didn’t sit well with me, customers clearly told us the same, so it’s my responsibility to act on behalf of our customers.”

As a result, Telstra will scrap the previously announced excess data fees — which were to increase from 3c to 10c per 1MB — while maintaining the 50 percent increase in data allowances on its Travel Passes to a greater pool of countries.

“Telstra has worked hard at removing the pain point of International Roaming charges with the introduction of Travel Passes that make using a mobile overseas more affordable and predictable.”

Telstra had announced the decision to triple its excess data charges for many tourist destinations on Monday, with hundreds of customers slamming the decision.

Telstra rival Vodafone Australia, meanwhile, offers customers on its Red plans international roaming capped at just AU$5 per day.

Last month, the Trans-Pacific Partnership (TPP) was also revealed to be encouraging its 12 member states to promote more transparent and reasonable costs for international mobile roaming services in order to support the growth of trade and improve consumer interests, but fell short of explicitly requiring regulation.

The full text of the TPP was published on the website for the New Zealand Ministry of Foreign Affairs and Trade a month after reaching agreement, with the treaty aiming to regulate trade between Malaysia, Australia, the United States, New Zealand, Canada, Singapore, Vietnam, Japan, Mexico, Peru, Brunei, and Chile.

The wording of Article 13.6 of the Telecommunications chapter

[PDF], which covers international mobile roaming, is fairly soft, however, with the TPP simply stating that members “may choose to adopt or maintain measures affecting rates for wholesale international roaming services with a view to ensuring that those rates are reasonable”.

“Nothing in this Article shall require a party to regulate rates or conditions for international mobile roaming services,” part 7 of the Article states. Rather, parties must simply “endeavour to cooperate on promoting transparent and reasonable rates”.

If parties deem it “appropriate”, they may also work alongside other member states to implement mechanisms for ensuring roaming rates are reasonable.

The Telstra chief executive also used the blog post on Thursday to announce that the telco would change the amount charged on paper bills whether they are posted to customers or paid over the counter.

“We will charge AU$2.20 to receive a paper bill and separately, AU$1 for each over-the-counter payment made,” Penn said.

“This allows us to recoup costs and avoids the need to charge everyone for a service which a minority of our customer base continues to use. These are equivalent to or better than competitor charges and below various other non-telco organisations. We will also rebate the difference to customers charged the AU$3.20 fee, where applicable…

“On behalf of the team, I hope these decisions are recognised as our continued commitment to our customers.”

Source: Sydney Morning Herald, Brookings, PC Authority, ZDNET

By | 2017-08-24T23:43:11+00:00 December 1st, 2015|Categories: RESEARCH NEWS|

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