Vodafone's New Roaming

Vodafone Australia recently announced a new initiative designed to curb international roaming mobile charges. Customers travelling to select destinations - The USA, Britain or New Zealand - will now pay $5 per day to access their plan as they normally would at home. This will hopefully limit the number and severity of excessive cost spikes for international travellers. 

As you’re probably aware, using your mobile phone overseas is astronomically more expensive than using it in your own country. Not only that, but it is often very unclear where the extravagant charges are coming from, and working it all out is rendered almost impossible by the fact that the charges often don’t all appear at the same time. For example, charges for the calls you make and the data you use might appear on your very next bill, while the charges for incoming calls might be held over until the subsequent month. Meanwhile, the ‘airtime fee’ – this is the fee the foreign network charges your local provider, who then passes it on to you – will often appear later even than that. The whole thing is basically a mess, one that is costly for travellers, and lucrative for carriers.

Vodafone’s announcement that it will limit charges to $5 per day for its customers travelling to Britain, New Zealand and the USA is therefore a very welcome one. The reason it can do this is because, as a global telco giant, Vodafone has networks operating in those countries (the US it will partner with AT&T). The better question is why it hasn’t sought to do this already.

The answer, sadly, is that until now it hasn’t felt it had to. But Vodafone Australia is not in a happy place. It lost a further 550,000 subscribers in first six months of 2013, and hundreds of thousands in the six months before that. Most of those left due to poor coverage and customer service. (Coincidentally, Telstra recently  announced it added 1.3 million new subscribers in the last financial year.) With their brand now tarnished almost beyond repair, Vodafone have been compelled to make significant changes, as opposed to the usual deck-chair rearrangement that passes for change in the telco industry.

There has of course been Vodafone's huge, heavily-advertised and ongoing network investment and the fairly successful recent launch of LTE services. There have been improvements to the customer service experience: the ratio of helpful staff to disgruntled clients is improving all the time, partly as a result of better hiring and training practices, and largely because so many disgruntled customers are leaving. As CEO Bill Morrow admitted: ''We are recovering a brand. We have to have points of difference.'' Addressing Bill Shock! is one of these.

Bill shock! – the blanket term for receiving a bigger bill than you expected, and legally requiring an exclamation point – is currently a pressing issue for telcos, whereas before it was merely a pressing issue for customers. It is further tarnishing an industry that was already mostly rust.

For its part, the ACMA forced through some fairly weak legislation in an effort to combat this: the rather grandly-titled International Mobile Roaming Standard. It mainly forces telcos to be more upfront about how charges are derived. But while Dog and Bone certainly subscribes to the idea that knowledge is power, it was probably always going to be the case that real change was only going to come when the market forced carriers to change their practices. Well, the market is forcing telcos to do all sort of things at the moment.

Optus recently launched a new range of mobile plans – My Plans – which limit excess usage to more manageable $10 blocks in an effort to curb Bill Shock! I’ve already argued that despite acting like martyrs about the whole thing, Optus probably stands to gain in the long term, and that it is no doubt perfectly aware of this. The new plans are a bit of a bait-and-switch, but they’re still a decent idea, and will certainly help to curb some of the more outrageous blowouts.

Vodafone’s new $5 roaming announcement is made in a similar vein, but are more unambiguously good for its remaining customers. Global roaming costs can get truly astronomical, and this measure, even limited to three countries for the time being, should really make a difference for some poor souls. Indeed, Vodafone has always been a decent carrier option for those obliged to traverse the globe, and this will only make them more attractive. For their sake, and the sake of decent competition in the Australian mobile space, we hope it helps. If anything, we hope they go further.

 

UPDATE August 21, 2013: Optus has now announced new flat fee global roaming provisions, similar to Vodafone's. Post-paid customers can obtain a Travel Pack for $10 per days, allowing unlimited calls and text, as well as 30Mb of data per day, to most commonly-visited countries.