Chapter 5 Alternative services to international mobile roaming
5.1
A range of alternatives to international mobile roaming are available to
consumers. During the inquiry the Committee investigated these alternatives
for:
n their utility in
comparison to roaming;
n their cost; and
n whether they exert
any downward pressure on the costs of roaming.
5.2
In considering the alternatives it needs to be noted that only a small
proportion of travellers use roaming. The Australian Mobile Telecommunications
Association (AMTA) put the number of users at between five to 20 percent of
Australians travelling overseas. It can thus be inferred that the majority of
travellers either do not communicate whilst overseas, or use substitutes.[1]
5.3
The alternatives considered in this chapter are:
n international calling
cards;
n short message service;
n use of local
networks;
n email; and
n use of hotel
telephones.
International calling cards
5.4
International calling cards allow users to make international calls via land-line
telephones. Users purchase the card either in their home country or overseas.
At the point of purchase, the card contains an amount of ‘credit’ which can
then be used to make telephone calls. The user dials the Person Identification
Number contained on the card and then dials the telephone number of the person
they are trying to contact. Credit is then deducted from the card’s balance for
that call. The call rates and rate types (for example being charged per minute
or per call) vary depending on the type of card and the location from which the
user is calling. When the credit on the card runs out, users can either
recharge the credit on the card or purchase a new card.
5.5
International calling cards are widely available, both in Australia for purchase prior to travel and overseas.[2] Further, in some cases
international calling card charges are much cheaper than international mobile
roaming services.[3]
5.6
However the Committee was informed of the limitations which apply to
international calling cards. The Consumers’ Telecommunications Network (CTN) pointed
out that many calling cards are not transferable between countries and users
have to purchase a new card in each country. Further, CTN stated that sometimes
users must pay a charge to access fixed phone lines, such as in hotels, and
this may in fact make the use of calling cards more expensive than mobile
roaming.[4]
5.7
International calling cards do not provide the mobility or convenience
of international mobile roaming services, and do not permit travellers an
immediate form of contact. Because of these limitations, the Australian
Competition and Consumer Commission (ACCC) considered that international
calling cards are not a viable alternative for roaming.[5]
5.8
The Committee concurs with the ACCC view that calling cards aren’t an
effective alternative to roaming. Nevertheless, with planning by the
traveller, such as calling work or home at an agreed time, international
calling cards can come close to replicating the utility of voice roamed calls
at a much cheaper price.
Short Message Service (SMS)
5.9
While SMS is a roaming service, it is examined here as a competitor of roamed
voice calls. As discussed in chapter two, SMS is a facility for exchanging
short text messages between mobiles. Users prepare a message on their mobile
phone with up to 160 characters. This message is then sent via the overseas
carrier’s network to the home carrier’s network where it is delivered to the
recipient’s mobile.
5.10
AMTA argued that the use of SMS through international mobile roaming is
often much cheaper than making a voice call via international roaming. Thus SMS
can be considered as a feasible alternative to using voice calls via
international roaming.[6]
5.11
However there are some drawbacks to using SMS. The ACCC’s review pointed
out that SMS only allows consumers to communicate in a truncated
and intermittent way as opposed to the simultaneous communication allowed by
voice calls. The ACCC concluded that SMS is not a true substitute of
international mobile roaming voice services.[7]
5.12
The Committee believes that SMS provides an alternative to voice roaming
for users who only require an intermittent and basic form of communication. For
example, SMS may prove an effective low cost means for fellow travellers to keep
in contact.
Use of local networks
5.13
Users can either hire or buy a Subscriber Identity Module (better known
as ‘SIM’) card from one of the mobile phone providers in the country they are
travelling to. The SIM card is then installed in their mobile and replaces the SIM card from their Australian provider. In effect, the traveller is taking out a short term
contact with a provider in the country they are visiting. A range of such
services are available:
n users can buy a SIM from a local provider in the destination country;
n users can hire a
mobile phone and SIM that functions as a local phone on the visited network
either before leaving or once they have arrived in the destination country; and
n users can purchase a SIM card that operates as a local network SIM on the visited network before leaving to their
destination country.
These services are
available in both pre-paid and post-paid forms. A pre-paid SIM would allow the consumer to use the local network until the credit on the SIM runs out. Alternatively a post-paid SIM would allow the consumer to use the local network and
then pay for their calls via a regular bill. [8]
5.14
Both the ACCC and KPMG reviews note that the availability of this
service is growing.[9] Both the AMTA and Vodafone submissions state that the availability and low cost of these options make them
very competitive alternatives to international mobile roaming.[10]
5.15
There are some disadvantages to this option. The first is that the
traveller has a new phone number which needs to be communicated to everybody
who might need to contact the traveller. Also, in order to access local mobile
networks it may be necessary to purchase a new card in every new country. This
is time consuming and expensive for the consumer, especially when taking into
account the language barriers that exist in some regions. The language barrier
features as a further problem when the traveller needs to access customer
support services.[11]
5.16
The Committee feels that local networks are a good alternative for
travellers spending extended periods in one region. However the Committee recognises
that for other travellers this alternative has a series of limitations
including restricted mobility, difficulty of purchase and limited ability to
access support services. Signing up to services provided by local networks in
the destination country is not a full substitute for international mobile
roaming.
Using the internet
5.17
The Committee surveyed two internet based alternatives to international
mobile roaming: Voice over Internet Protocol (VoIP) and email.
Voice over Internet Protocol (VoIP)
5.18
VoIP is a technology that allows for the transmission of voice
communications over the internet. This technology has been implemented to
transmit voice calls between fixed-line telephones and the benefit for
travellers is that VoIP enables communication from a computer to VoIP land
lines, other computers and VoIP enabled mobile phones.
5.19
A user accesses the internet and downloads a VoIP software program onto
the computer. Some VoIP software programs are free whilst some require a
subscription fee. The user can then initiate a conversation with particular
users who have a compatible VoIP capability enabled on their phone line, mobile
or computer. Next, the user speaks into a microphone connected to the computer.
The VoIP program then converts the sound into a digital signal and transmits it
via the internet to the recipient’s device. The recipient’s VoIP device then
converts the digital signal back into sound and conveys the voice to the
listener. The quality and speed of VoIP calls are virtually the same and
sometimes better than other voice services.[12]
5.20
Vodafone Australia’s submission to the inquiry stated that many areas
frequented by travellers such as airports, hotels and cafes have wireless
internet access and thus VoIP communication is a viable substitute.[13]
The submission to the inquiry by AMTA further supports the notion that a wide
range of internet resources are available to travellers and that VoIP provides
an almost perfect alternative to international mobile roaming.[14]
5.21
The AMTA submission further notes that a range of mobile devices are emerging
which can access the internet and run VoIP programs, thus increasing the
applicability of VoIP communication as a substitute to international roaming.[15]
However the Committee notes that accessing the internet from these mobile
devices whilst overseas would presumably incur international data roaming
charges which may in turn make the use of VoIP on mobile devices significantly
less cost effective.
5.22
The Committee notes that some of the limitation’s outlined in the ACCC’s
review apply to the use of VoIP. Namely, VoIP services (with exception of VoIP
on mobile devices) do not provide the mobility or ease of contact as do
international mobile roaming voice services.[16]
Email
5.23
Email allows users to exchange extended written messages via the
internet. Most email accounts can be accessed remotely through internet web
browsers. Thus, for travellers who can access the internet, communication via
email could be substituted for making a voice roaming call.
5.24
As previously mentioned, the submissions of both Vodafone Australia and
the AMTA argue that a wide range of internet resources are available to
travellers, including internet-enabled mobile phones.[17]
5.25
The submission to the inquiry by the Department of Foreign Affairs and
Trade states that the use of internet-enabled mobile devices to send emails can
often eliminate the need for extended international phone calls and provides a
flexible means of contacting people whilst travelling.[18]
Vodafone Australia also advocates email as a substitute to international mobile
roaming.[19]
5.26
Email is similar to SMS, but significantly more flexible, enabling large
amounts of text and attachments to be sent. In addition, where email is
accessed at internet cafes or on hotel computers, it can be very inexpensive.
5.27
The Committee is of the view that internet-based options provide a good alternative
to roaming. In many countries, internet connections are widely available and
relatively cheap. Travellers can frequently access their email from any
computer with an internet connection. Further, the utility of the internet as
medium for voice communications is growing with the proliferation of VoIP
technology. The Committee notes that some limitations do apply to both email
and VoIP, such as diminished ease of contact. Nevertheless, the Committee believes
that internet-based communication provides the best available substitute to
roaming.
The use of hotel phones
5.28
Another alternative to international mobile roaming cited during the
inquiry was the use of fixed lines in places such as hotel rooms. Hotels and
guesthouses usually provide access to a fixed line phone either in the room or
in a central common room. Travellers can use this phone to call locally or
internationally at the rates as charged by the local network. The use of these
phones usually incurs an extra charge levied by the hotel or guesthouse.
5.29
Both Vodafone and AMTA advocated hotel phones as a widely available and
accessible alternative to international mobile roaming.[20]
5.30
The ACCC reported that the use of hotel phones is not only an imperfect
alternative because of its lack of mobility and lack of ease of contact, but
also because the use of hotel phones usually comes at a premium price. Therefore
the ACCC was of the view that hotel phones do not provide a cost effective
alternative to international mobile roaming services.[21]
Further, the CTN also advised that extra charges on hotel phones are common and
prevent this being a cheap alternatives to international mobile roaming.[22]
5.31
In the Committee’s view, the use of hotel phones may provide an alternative
to roaming for users with little or no budget constraints, such as business
travellers, and travellers that are staying in the one place for an extended
period. However, the Committee observes that the high price of using hotel
phones means that it may not be widely perceived as a viable alternative to
roaming.
Committee conclusion
5.32
None of the options offered here are genuine alternatives to
international mobile roaming, although internet based options come closest.
The Committee considers that it is unlikely that any of these alternatives
exercises a downward pressure on roaming prices. This finding is supported by
the ACCC, which stated that the alternatives to international mobile roaming
available to consumers are imperfect substitutes and do not provide a true
alternative.[23]
5.33
Given that regulation of international mobile roaming is a long term
proposition, the alternatives provide the best opportunity to reduce the costs
of staying in touch with work and family while travelling overseas. While none
of the alternatives offers a direct replacement for the utility of roaming, a
traveller who pays attention to their communications needs can come close to
replicating the utility of roaming at a fraction of the cost.
5.34
The bulk of travellers are opting either for one of these alternatives
or are not communicating at all. Consumers, in other words, are ‘voting with
their feet’ when it comes to the cost of roaming.
5.35
However, inexperienced travellers may not be aware of the range of
alternatives to roaming that exist, some of which may be more appropriate for
those travellers.
5.36
In order to further assist travellers with decisions about alternatives
to mobile roaming, the alternatives should be included information on roaming
provided by the Australian Government such as ‘Smart Traveller’. The Committee
notes, for example, that the fact sheet on roaming provided by the Australian
Communications and Media Authority makes no mention of the alternatives. The
Committee therefore recommends that, when an Australian Government agency
provides information to the public on roaming, the alternatives to roaming be
included as part of the information.
Recommendation 5 |
|
The Committee recommends that when an Australian Government
agency provides information to the public on roaming, the alternatives to
roaming be included as part of the information. These alternatives should
include:
n international
calling cards;
n short
Message service;
n use
of local networks;
n email;
and
n use
of hotel telephones.
|
Ms Belinda Neal MP
Chair