• Inside Labour

    The 'casualisation' of the workforce is often a ploy to cut costs, says Terry Bell.

  • When drones go dancing

    Drone technology's future is about to come to life in Cape Town, says Arthur Goldstuck.

  • Testing times for Matona

    New Eskom CEO Tshediso Matona has his work out cut out for him, says Mzwandile Jacks.

Data provided by iNet BFA
Loading...
See More

Telecoms terrorism

Nov 22 2010 21:56 Simon Dingle

I AM writing this from somewhere over the North Atlantic on my way to New York. When I land in the USA, one of the first things I will need to do is connect to the internet and send this story to my editor, along with a number of other urgent emails; it is late on a Monday back in Johannesburg, after all.

It would be great if I could use my phone's 3G connection to send the email - but I wouldn't dream of it.

Imagine if you went back in time 20 years and explained to people that one day it would be possible to call people on phones that sent your voice through the air. Also, these phones were able to send and receive letters, pictures, movies and other information across the globe in seconds - but that you couldn't use them for that because it was too expensive. They'd think you were crazy.

And that's what modern global telecommunications is - crazy.

Our networks are sophisticated and capable of enabling the most amazing things. But we can't connect them to each other without incurring massive costs.

Now, you may think these costs are justified - but the simple truth is that they are not. In fact, they're a form of ransom.

When you travel from South Africa to the USA, as a pertinent example, keeping your cellular phone in use relies on an agreement between your network back home - Vodacom, in my case - and a network in the USA, be it T Mobile or AT&T as examples.

The American network dictates the roaming charges to Vodacom, the latter not having much of a say in the matter. There is also an added complexity of your calls being repeatedly routed across continents.

If someone phones you from South Africa and your phone rings in New York but you don't answer, the caller is diverted back to South Africa via the USA to leave you a message - and you pay for that connection. If it sounds ridiculous, it's because it is.

But what is more ridiculous is the pricing of this all. I cannot claim to know the exact physical cost of connecting a call intercontinentally, largely because it is near impossible to compute, but I do know it is a minuscule fraction of what is currently charged. That statement is both observational and the opinion of leading telecoms analysts.

Why it is a ransom and borderline criminal, in my opinion, is because the customer has no recourse. If you call your network to complain about the roaming  costs or to fix incorrect charges, they will tell you that they cannot help because the international networks charge them.

So you'll have to deal with a network in another country where you are not the direct customer, and they will refer you back to your home network to intercede on your behalf. Good luck with that.

Vodacom is potentially the best network to roam on from South Africa because of its relation to the UK cellular giant Vodafone. If you roam onto a foreign Vodafone network, you are charged much less compared to other networks - but only because of the nature of the relationship between the two.

If Vodafone did not own Vodacom there would have to be a regular roaming agreement and you would be charged much more, which reinforces my position on the real costs involved.

Data is especially expensive when roaming. In the Vodafone example, Vodacom customers pay R17 per MB for data. That might sound expensive, but it pales in comparison to what you pay on other networks.

The highest I have ever paid for data was in the USA, where I was charged an incredible R270 per MB. I have heard of higher charges still, especially in other African countries, ironically.

And let's not get started on what it costs to make calls back home.

The whole situation is so ridiculous that regular travellers avoid using their phones overseas, unless they acquire a foreign SIM card to use while travelling - or they are so rich that paying thousands of rands for some data and a few calls is not an issue.

Virgin Mobile used to be the most cost effective network to roam from South Africa on, but I have had trouble establishing whether this is still the case. If it is and Virgin still only charges a small percentage more than what you pay in SA, I will be very tempted to switch.

MTN recently revised its roaming agreements and while calls back to SA are now somewhat more affordable at R5 a minute, data is still prohibitively expensive at a whopping R256 per MB or thereabouts - charged in 25KB increments that cost 25c each.

So if you're planning a trip overseas, forget about taking your MTN 3G modem with you unless you want to mortgage your house upon your return to SA.

Spotting a gap in the market, some companies which offer "global SIM cards" have sprung up, the idea being that you have one SIM that works anywhere and costs less. The solutions are only marginally cheaper than roaming on your home network, however, and the products I have looked at turned out to be mere marketing gimmicks.

I would make a plea to the world's telecommunications companies to stop the madness, but I know it would fall on deaf ears. Holding someone else's customers ransom and charging them ridiculously high prices for a cheap service is good business, after all.

I'm not sure what it would take to change the regime in this regard - but I think we can all agree that in this era of globalisation and interconnectedness it is ridiculous that using your phone overseas, especially for data, could cost more than your flight.

As always, I look forward to your comments.

 - Fin24

mobile internet
NEXT ON FIN24X

ISPs must toe the line

2011-06-24 11:22

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
14 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

Expanding your business requires capital and banks have stringent lending criteria in place.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...