Nothing free about roaming

The competition regulator has virtually admitted defeat in its efforts to rein in the exorbitant cost of using Australian mobile phones in overseas countries.

Australia's big four mobile operators, Telstra, Optus, Vodafone and Hutchison, are all benefiting from the huge profit margins earned on international roaming.

Telstra's international roaming revenue surged by 53 per cent, or $21 million, in the three months to March after the company significantly increased its inbound roaming prices in December.

A spokesman said Telstra had asked foreign mobile network operators to drop their prices to meet Telstra's lower charges but the foreign carriers had refused, prompting Telstra to charge foreigners using its network the same rate they were charging Telstra to use their overseas networks.

Vodafone New Zealand, which charges Telstra about $3 to terminate calls on its network, refused to cut its roaming rates to the same as the $1 Telstra charged Vodafone New Zealand to provide the same service. So Telstra simply lifted its call termination rates to $3.

An Australian company specialising in mobile roaming, vRoam Australia, claims that lack of transparency in international roaming prices is being used to hide the high cost of roaming as well as the hidden charges.

Danny Nathanson, chief executive of vRoam Australia, said the Australian Competition and Consumer Commission should follow the lead of the European Commission and force carriers to publish roaming tariffs on a special website.

"It is disappointing that two years after the ACCC began an inquiry into mobile services nothing has been said about international roaming," Mr Nathanson said. "The ACCC should take some more positive steps to assist consumers."

At one stage, the ACCC was considering including international roaming prices in its retail price control arrangements in Australia. But its report into mobile services issued in December dealt only with domestic inter-carrier roaming.

ACCC general manager for communications Michael Cosgrave said the regulator had no control over the roaming tariffs of foreign carriers. "We are going to consider further measures in relation to transparency of international roaming charges," he said.

Mr Nathanson said business and consumers could cut their international roaming charges by 40 per cent by using SIM cards issued in Australia that allowed them to be contacted on their normal Australian mobile numbers.

Many people did not realise it was more expensive to miss a call than retrieve a voicemail message from Australia, he said. This occurred because calls were "tromboned" or bounced back and forth between their Australian carrier and a foreign network.

Telecommunications consultant Paul Budde said mobile operators were cross-subsidising fancy mobile handsets with high roaming charges.

"It remains a mystery to me that it takes regulators so long to produce some decisive action on this," Mr Budde said. "We have been talking about this for years now and it is about time the ACCC shows some guts and takes action."

 © 2005 Copyright John Fairfax Holdings Limited. www.afr.com