Govts take on trans-Tasman mobile roaming rort

The Australian and New Zealand Governments have proposed significant intervention into the trans-Tasman telecommunications sector to break "obscene" data and voice roaming costs.

Minister for Broadband Communications and the Digital Economy, Senator Stephen Conroy

A landmark draft report (pdf) released for industry consultation today proposes seven plans of action.

Some of the more "blunt" proposals include legislation, wholesale and retail price caps and giving regulators the power to decide how they would like to break existing roaming arrangements.

Other models on the table include forcing, for example, a user's home telco in Australia to offer a "local-access" service in New Zealand that they can roam to, enabling "roamers to act as local users in their destination, without having to swap SIM cards".

The draft initiatives are more severe than those proposed by German economic consultancy WiK-Consult, which was commissioned to feed research into the inquiry.

in February, WiK-Consult sought an arrangement where users could "decouple" the domestic and international roaming components of their mobile plans. The option is still on the table, but is now only one of seven out for comment.

The draft report is part of a two-year joint investigation into trans-Tasman mobile roaming costs. It was initially expected to be handed down last year, but was delayed eight months until its release today.

At a launch in Canberra, Communications Minister Stephen Conroy slammed telcos for maintaining high roaming charges, despite the existence of the inquiry.

“This draft report shows that margins made by Australian telcos have been higher than 1000 percent ... this is obscene,” Conroy said.

"Since the Australian and New Zealand Governments announced our investigation, not surprisingly these margins have come down, but Australian telcos have generously dropped from a 1000 percent margin to 300 percent margin.

"So for this reason the draft report recommends action by our respective governments."

The draft report pinned the decline in margins on threats of Government regulation. But ad hoc threats would soon pass and margins may increase again unless additional action was taken by both governments.

Conroy said greater transparency in pricing will increase the incentive of mobile operators to compete on price and result in a better deal for Australians travelling overseas.

New standards

In the short term, the Australian Communications and Media Authority has been directed to create and implement a new standard directing telcos to inform customers just how much they will be charged to make calls or use data while roaming.

The standard will act as a warning to customers before they can potentially run up huge roaming bills as they travel.

"This standard will ensure that Australians receive an alert on their mobile phone when they land overseas," Conroy said.

"This will allow consumers to find out how much they'll be charged when they make a call, how much they'll be charged when they send a text or how much they'll be charged when they go online.

"Most importantly, these alerts will allow Australian travellers to opt out of using these services."

The ACMA is expected to deliver and enact the standard within 12 months.

Conroy conceded there would be costs involved for telcos to implement the standard.

"Those are the discussions that we'll be having with the sector," he said. "These are usually just software [but] that's not to say they're easy to do or that they're costless."

Draft report welcomed

Australian Greens Senator Scott Ludlam said his party was "particularly supportive of measures to improve pricing transparency" when it came to roaming costs. 

"In regards to costs, we will look closely at the detail of the draft report’s options to allow roaming customers to become local end-users, so they’re charged local instead of overseas prices; separating roaming services so people can have distinct networks for domestic communications and trans-Tasman roaming;  and at the viability of price caps," he said.

Telecommunications Union ANZ (TUANZ) CEO Paul Brislen also welcomed the report, though he believed the best way forward was to remove the idea of "roaming" entirely.

“Customers buy a service from a provider and should be able to use that service no matter where they are. In Europe this model is starting to emerge - buy a gigabyte of data from one telco and customers can use it throughout Europe,” Brislen said.

“That would be our preference as customers are increasingly operating in a world where borders and boundaries are simply not considered when they look at their telco use.”

Vodafone also welcomed the draft report, noting that it already alerted customers to roaming charges when they landed in a new country, and had worked to reduce roaming charges, partially by leveraging its worldwide network.

The telco did not address any of the more severe proposals in the draft report.

Beyond the Tasman

Though the inqury is limited to Australia and New Zealand, there appears to be an appetite in government to put pressure on roaming charges to all countries.

Both Conroy and his New Zealand counterpart, Amy Adams, hoped the options they were exploring would be taken up by other overseas jurisdictions.

"We'll be looking to take this further," Conroy said.

"I'm sure we'd love to work together with other countries to bring other governments into the sort of cooperation that we've achieved."

Submissions sought

The Australian and New Zealand governments are now seeking submissions on the draft report from consumers, the telecommunications industry, and other stakeholders, which will inform the final response adopted.

Submissions are invited on the joint Australia-New Zealand draft report by 27 September 2012.

Additional reporting by Ry Crozier.