Storming the ramparts of roaming: Voice over Internet protocol carriers attack last bastion of mobile telecoms cost

2012-04-18 00:00

AS high mobile phone and data costs are steadily whittled down by regulation and innovative VoIP-enabled (voice over Internet protocol) communication models, exorbitant roaming costs are among the last bastions of high mobile charges.

A worldwide phenomenon, steep roaming costs came about because of the price-making power of mobile market oligopolies. But even as these powerful companies lose their hold over pricing, they are digging in their heels by keeping roaming charges as high as possible for as long as they can.

But the VoIP offensive is taking several forms and steadily winning the war. In one battle falling to VoIP, smaller operators are making quick inroads in cross-border roaming markets with low-cost data-based telephony.

Mobile virtual network operators (MVNOs), which already use other operators’ networks to avoid the cost of building their own networks, are making further innovative use of host networks by offering cross-border VoIP telephony on them.

Avoiding call minutes for data traffic, their cost is minimal, as it excludes the per-minute roaming charges they would have had to pay host operators for use of their in-country networks. Their only stock in trade, besides use of a network, is a partnership with a SIM card company

In another attack on roaming costs, VoIP carriers offer a facility to route calls to roaming employees through a local 087 number — called “forward function”. Calls to and from roaming mobile phones enter the cost-free, long-distance VoIP network via a local access point and break out into the public network again in the destination country, via a local SIM card; this for as little as a third of a normal roaming call.

New regulations introduced the “Eurotariff” in all European Union member states, removing exorbitant data charges and largely introducing voice relief as well, thus making VoIP possible as a cost-saving communications model again in this territory.

As subsequent inquiries still found prices to be too high, further refinement followed. Among others, it is envisaged that the price difference between domestic and foreign calls will be zero by 2015.

In addition, 3G data roaming prices will be abolished completely over the next few years, in favour of flat rate data charges. EU roaming is likely to flourish under this increasingly vigilant and sophisticated regulatory regime, but it is also possible that other dynamic economic territories can likewise benefit from flat rate pricing.

And even when that day arrives, the aforementioned emerging business model involving MVNOs and SIM providers can still be viable, given the low capital and operating costs of such arrangements.

With mobile roaming costs remaining high, VoIP remains an effective and quality-proven means of sending calls over the lowest possible route.

Rob Lith is the director of Connection Telecom.

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