OECD on international roaming rates

The Dom Post reports:

“Unreasonably” high charges for using mobile phones and mobile broadband overseas could face the regulators’ axe under an OECD proposal.

Mobile network owners pay hefty rates so their customers can use the networks of overseas carriers while travelling, and these fees are usually passed on to the customer.

A report by the Organisation for Economic Co-operation and Development proposes several ways to reduce global roaming charges – including regulation of wholesale access charges by governments around the world.

The report urges telcos to better educate customers about roaming charges so as to avoid “bill-shock”.

Wellington businesswoman Liz Price says she was horrified to discover she had been charged $3500 for two hours of internet use while on holiday in Australia.

The charges of $30 a MB are highway robbery, and represent massive profit margins.

Let’s say the cost of international bandwidth is US$1,500 a month for 1 Mb/second. That means it takes 8 seconds to get 1 MB of data, which is then charged to the customer at NZ$30.

US$1,500 a month is US$50 a day. That is a cost of US$2 an hour or NZ$3 an hour.

The cost per minute is 5c so the cost for that 8 seconds of bandwidth is basically NZ1c and you pay NZ$30 for it.

Now of course a pipe is not perfectly used at 100% capacity the entire time, but you get some idea of the massive over-charging in place for international roaming.