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Roaming costs a lot more than you think

July 15, 2013 • Opinion

Picture this scenario: an executive is about to leave on a business trip to the United States. Whilst he is away, his colleagues decide to e-mail him a large video file. He goes about his business for two weeks, downloading emails, checking in with the South Africa office, and accessing the Internet. Meanwhile, the video download keeps aborting, using up to 10MB each time, over the next 14 days. He thinks nothing of it.

Craig Lowe, MD, execMobile. (Image source: execMobile)

Two months later, he receives a bill of well over R500 000 – for data charges incurred whilst travelling.

Whilst this might have been an extreme example of an executive being caught unawares, it’s not a unique one. We all know that roaming data costs are more expensive than local calls, but very few know by how much. In fact, the global standard rate for data roaming is about R128/Mb – which is why data downloaded when abroad, can easily amount to a bill well into the hundreds of thousands of rands.

80% of the cost of roaming is determined by the foreign network – meaning that customers who enter a foreign country are held captive by the network operators in that specific country, and their own, local network is more or less powerless to reduce these costs. Mobile operators depend heavily on roaming profits – which may constitute around 20% of their annual EBIDTA. If they drop their charges, they consequently drop their profits dramatically.

It is not uncommon for executives to rack up bills of twenty, thirty, fifty or even a hundred thousand rand in a matter of days – simply because seamless and affordable connectivity for travellers does not exist. 36% of corporate and 68% of leisure travellers forego connectivity as Silent roamers, fearing “bill shock”.  But that leaves two thirds of business travellers who are paying exorbitant costs due to the need to remain connected when roaming, fuelling a $45 billion dollar roaming industry. For most of these travellers, free Wi-Fi is simple not an option – it is too unsafe, and the information on their devices is too sensitive to place at risk.

It is crucial that companies sit down and discuss how to curb the high cost of international roaming and implement a detailed Roaming Connectivity Policy (RCP). There are numerous Roaming Connectivity Management tools that can be used to, not only roam for a fraction of cost of the global rate, but also provide a self-service portal that can be used to monitor users and usage anywhere in the world, in real time. For the traveller, this is as simple as plugging a USB device into their laptop or using a mobile wireless router to connect multiple devices.

As executives, we should be mobile. We should be going about our business safely. And most importantly – we should be paying a lot less than we currently do for data.

Craig Lowe, MD of execMobile

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