Roaming for affordability
Canadian cellphone costs stifle innovation
Tired of coming home from vacation to an exorbitant cellphone bill? Many fatigued Canadians are finding ways to avoid steep roaming fees and other international cellphone rates that are among the highest in the world.
Ironically, the high price is costing Canada’s main service providers missed opportunities from silent roaming, which is when customers leave their phones at home or turn them off while travelling.
At an international trade show last month for mobile phone operators, Syniverse, which provides roaming technology to cellular companies, estimated that the 800 mobile phone carriers it serves lose $1.2 billion each year from silent roaming.
The reality is people are circumventing their wireless providers, any way they can. They do this by using free Wi-fi at cafes like Starbucks, and making calls using Skype. Many buy SIM cards from the cellular network that covers the region where they are travelling, and use them in phones that have been unlocked. Other businesses which repair and modify cellphones see their own economic opportunities.
The situation is full of contradictions. Mobile technology is hardly portable if it is tied to one company’s network. Nor should travellers have to leave their smartphones at home to buy cheap local mobiles upon arriving at their destinations. The iphones, which come unlocked if purchased from Apple, are made to travel. They have a built-in GPS that ensures one never gets lost, and other applications that help visitors navigate where to eat and sleep, what to do and how to book online hotel reservations. Without an affordable data plan, though, you’re better off with paper, because downloading just one map can cause serious sticker shock back home. So, what’s the answer? Ottawa-based consumer group Public Interest Advocacy Centre, which studies telecom issues, points to the European Union model of regulation. The European Commission hopes to reduce the gap between domestic and foreign call rates to nearly zero by 2015. Roaming charges will be cut to 90 euro-cents per megabyte starting in July. That compares to the $10 per megabyte charged by one of Canada’s big three carriers — a price that was promoted as a drastically reduced rate.
We favour more competition over regulation, but recognize the difficulties of opening the market in a country as large as Canada, but with a relatively small population.
Lawford believes competition, in theory, would bring down the prices in the long run, but points out the reality: “Getting even one new player into the market, in Canada, is a hell of a job.”
Another option would be to work with the U.S. to negotiate an agreement that would bring some saner pricing to international roaming rates. The current situation is a drag on innovation and hurts both customers and companies alike. The rate no longer matters when customers deactivate their data during travel, and hang up.