How to reduce the cost of global roaming

Man holding a globe under his arm

Here are some strategies and tools for keeping costs down while staying connected.

$557 million dollars. That was the headline figure –more than half a billion dollars— in a recent AAP story outlining what global roaming “bill shock” has cost the Australian traveller.

This huge number lends support to anecdotal accounts of $10,000 phone bills and the rise of services, like one outfit down in Melbourne, that is devoted to helping consumers negotiate their way out of massive phone bills.

Global roaming is an issue that will be with us for the foreseeable future –despite regulatory rumbling, account limit alerts and heavily publicised telco global roaming packages (most of the time just unsustainable loss leaders that might burn you eventually).

But there is a side to the global roaming story that hasn’t really been told.

If consumers are facing big global roaming bills from the one-off trip, common sense says that businesses of all sizes are facing an even bigger problem.

But aggregate numbers are difficult, if not impossible, to come by. It is the rare business that will publicly admit to being burned by global roaming. What we are seeing every day, however, suggests that businesses are struggling to keep costs low while staying connected.

The problem is that unless your business has adopted a unified approach to telco for overseas travel, high bill costs will become a chronic problem.

An ad hoc approach just doesn’t work.

Instructing employees to reduce phone use might lead to lower bills, but there will likely be other costs: lost business opportunity and reduced business efficiency.

A draconian response that penalises employees or makes them too aware of how they use their phones when abroad can have a chilling effect on good business practice. No sensible company wants its employees to stop returning customer calls in a timely manner or neglect important inter-office business communication for fear of high charges.

Internet VOIP services and Skype might seem like a solution. Indeed, for some telecommunication activities –like long conference from a static location with ample or very low cost Internet— they probably are.

But, again, business continuity is critical for most travellers and these approaches depend on cheap or no-cost broadband Internet. Cheaper global roaming data rates aren’t the answer either.

We’re simply not there yet in terms of delivering comparable rate structures to what Australians are used to back home. In other words, don’t expect VOIP services or Skype to work well or cheaply from your mobile device when global roaming.

Even with the most competitive rates, everyday activities on the Internet will add up. For example, checking a Facebook page usually consumes 40kb of data. If you are paying conventional global roaming rates that one page can cost you over $1.

Even text only emails at 15KB can add up quickly with some of the leading Australian providers charging as much as $0.72 for each one.

Clearly, if text only emails cost that much then many of the mobile data functions we have grown accustomed to, like Google maps and YouTube, need to be avoided.

The general guidelines for both business and leisure travellers when it comes to global roaming data is remain vigilant, seek free WiFi wherever possible and never expect to use your mobile devices in the same way abroad as at home.

So what can a business do in order to ensure telecommunications continuity at a manageable cost?

The first step is to recognise that the biggest cost centre is voice, not data. For global roaming not to burn, your business needs to use providers who can offer competitive global roaming rates.

Unfortunately, the leading Australian telcos really don’t do this. While some of their global roaming rates can be competitive for specific destinations, there can be huge disparities that might mean an employee on a multi-country trip could run the risk of making a long call from a country with an exorbitant rate (e.g., 1 hour at $5 a minute becomes a tidy $300).

Our research suggests that the goal of most businesses is cost control. Standard, post-paid global roaming won’t achieve this goal for two reasons: 1) there is little if no real-time monitoring of costs available through the leading Australian telcos and 2) the disparity in rates means that a series of necessary, but unexpected calls (e.g., a client crisis), can quickly lead to a big bill.

Moreover, with standard global roaming, users can even be charged for calls they never answer.

Ultimately, pre-paid SIMs, SIM cards substituted for the regular SIM in your phone, offer the most effective cost control because costs can never exceed your initial balance.

While some of the lowest rates can be achieved by buying a single SIM in each country visited, this is usually not ideal from a business continuity perspective because: a) it is not always easy to buy a local SIM and b) you will need to buy a local SIM in each country visited (this often leads to travellers accumulating a pocketful of local SIMs).

A better approach is to integrate the pre-paid global roaming solution into business policy and accounting. This can be done by choosing a pre-paid SIM provider that offers highly competitive rates globally, not just in a single destination. Such as service means that a single SIM will work wherever the business traveller goes and cost control will be ensured.

Businesses can be stunned by the bottom line results of shifting their employees onto such a system. We have seen small companies save upwards of $5000 a month by simply requiring employees to use a pre-paid SIM for all outgoing calls.

But the best kind of pre-paid SIM service should also offer more. After all, one of the biggest hurdles to bringing global roaming costs down is behaviour. By far the main issue isn’t technology, it is the human beings using it.

Any business response to global roaming needs to support a shift to pre-paid that will make that shift in behaviour as clear and as easy as possible. What this means is identifying how best to implement the pre-paid for your business.

While strong customer support that is always available and responsive is a must for a pre-paid service; some businesses might need a little more customer support for their employees overseas. In that case, you will want to find a pre-paid service that offers concierge-services for little or no extra cost.

Some businesses, especially those whose employees spend more time in a particular country, will benefit from a pre-paid service that can offer a local number; others will want to ensure business continuity by requiring a call diversion service that means that all calls directed to the employee’s normal phone are re-directed to the pre-paid SIM for a small fee.

The right solution will also allow businesses to manage the pre-paid SIMs from one corporate account with one shared credit amount and the ability to set individual limits on each employee SIM card.

A truly comprehensive service will even offer additional benefits like diversion to toll-free numbers, text messaging flexibility, free-to-receive calling in as many countries as possible and even location-based services that allow employers to know where their employees are anywhere in the world.

If the right tools are used with the right strategy, no business needs to fear global roaming anymore.

  • http://www.truphone.com Jim Haikalis

    Hi Jamien,

    There is another compelling option available in the AUS marketplace – a new category is emerging, that of the Global Mobile roaming service provider. There are 5-6 players, of which we are a competitor. I am the Sales Director for Truphone AU, a business dedicated to providing low cost roaming solutions for Large Enterprise, SME and Consumer clients. We are a 500 staff business based in the UK with 10 global offices and backed by Venture Capital. We encourage businesses to stay connected and be more productive whilst they travel abroad.

    By taking advantage of our MVNO agreements in 5 countries, and our patented ‘least cost roaming’ approach – a customer can make roaming calls in and between AU, UK, USA, NL & HK for 19c per min (24c per min for IDD calls) and consume data at 15c per MB. Our competitors rack rates are up to a few dollars per minute and data usage up to $20 per MB. The rest of the world (200+ countries) is covered by us using preferential roaming rates with an average cost of 45c per min and $2.00 per MB, still a substantial saving whilst outside our direct footprint.

    There is an added benefit of having multiple mobile numbers on one sim from a choice of those 5 countries, allows users to do business more seamlessly across borders. This is set to expand to 8 countries (addition of Spain, Poland & Germany) by year’s end. On a post-paid plan, two numbers, an Aus primary + one other is offered at no additional cost.

    In May we plan to launch our Truphone+ smartphone app that will allow calls over WiFi using the SIM card’s mobile number as the caller ID. All you have to do is press ‘SEND’ an the app takes measurements of GSM and WiFi coverage, routing the call according to least cost and signal quality. This is great if you are in a location with low Mobile coverage, the added benefit is WiFi call costs are less expensive and billed to your mobile account.

    We are launching our service in April to business markets and will have direct and Channels sales teams nationally. If you or your readers are interested in some more info, please feel free to contact me.

    Regards,

    JIM HAIKALIS
    SALES DIRECTOR AUSTRALIA

    Truphone

    +61 466 928 511 (Australia)
    +44 7408 884 518 (UK)
    +1 323 472 4903 (USA)
    + 852 51 492370 (HK)

    Level 20, Tower A, 821 Pacific Hwy, Chatswood NSW 2067.

    truphone.com

  • Stewart

    All well and good suggesting these things but those who rack up enormous roaming bills tend to be those who are ‘too busy’ (read: too important) to pay attention to even the most basic instructions or to fiddle around with a second SIM card. Plus, there’s the inconvenience of not being able to be contacted on your ‘normal’ mobile number.

    Negotiation of reasonable roaming rates or legislation to stop the blatant gouging that is the current norm is the only practical answer.

  • ASJ Pty Ltd

    Must read….. Australian Telecom Network Updates Edition June 2013

  • https://www.google.com Veronica

    Hello there

    Some travellers also use international roaming sim cards, these allow you to have one fixed phone number and use all the services offered at the reduced price (appeared to be very convinient for me).
    My sim card is a TravelSim

  • Guest

    Great article, every contribution counts in the big picture…

  • I Porter

    Indeed the global roaming ripoff is about to get bigger: according to telco industry consultants Gartner, the global roaming revenue to telcos worldwide in 2013 was a staggering US$43bn. By 2017 they predict it will rise to an unbelievable US$80bn! (They say there is a mug born every day, but GR charges makes mugs of us all). The increase we are told is going to be due to 4G data rather than voice.

    Fortunately a new service is currently being developed and soon to be annnounced which will cut the feet from under the telco’s money sucking ways.

    I am involved in the development of a radically new solution which means the hops across borders can be free or pennies at the most, will allow you to make calls using your home country number at very low rates in the overseas (roamed) country or to third countries from there. Thats all I am telling you at the moment, but what I will tell you is that global roaming is on borrowed time: IP dialing will soon revolutionise telecommunications and conventionally dialed phone calls as we know them will join the relics of telex, fax, rotary dialers and soon, the humble landline!

    Nothing like a bit of disruptive technology to give the telcos a run for their money.

    Hang in there folks, a few changes are coming!