Mobile costs to favour consumers

On Tuesday (15th of July 2008), the BBC announced that the European Union was planning to challenging mobile phone companies and their costs for consumers travelling abroad.

The move comes after the refusal from most mobile phone companies to reduce their "roaming" charges for SMS texts and mobile internet access. Mobile phone companies are, of course, refuting the fact that the charges do not represent reality. They say that mobile charges abroad are more expensive than domestic and so prices reflect that cost.

What I've struggled to understand, for some time now, is the inability for global mobile companies to offer competitive global prices. I'm thinking about companies like Vodafone, Orange, T-Mobile, 3 Mobile: large global companies serving consumer markets in several countries.

If I'm an Vodafone or Orange consumer in the UK, I could take a trip home to Australia and simply pick up the Vodafone or Orange network there. Disregarding company set up, I'm still using that one particular provider. In which case - why am I charged so much for simply being abroad even though I'm spending my money with the same company I use at home?

If we look at the Virgin group, you can find financial synergies all over their business practices. For example, fly on a Virgin Atlantic flight and you'll get a discount if you use your Virgin credit card. You can also use those frequent flyer points to buy something from Virgin experiences or Virgin mega-stores. If you really wanted to, you could even transfer those flight miles to your loyalty card for Virgin Blue - a low cost carrier operating in the Asia-Pacific regions.

So with these sorts of synergies in mind, why is it that Vodafone or Orange can't do the same with their business?

The Virgin group isn't solely owned by Richard Branson - some 'Virgin' businesses, for example, are operated by other companies and individuals keen to capitalise on the Virgin brand. So whether Orange in the UK is run by the same people or board as Orange Australia seems irrelevant. What matters are relationships between the businesses in these regions. Additionally, I would have thought that Orange would have realised the competitive edge they could offer to the travelling consumer through a 'worldwide flat rate phone rate' simply through linking their respective businesses.

Surely it's possible, at a very basic level, to at least guarantee something between the UK and Australia? With that in mind, and as a mobile phone consumer, I'm welcoming the EU move with open arms. I'm hoping it will lead to a lower rate regardless of where I am and businesses will think a bit more pro-actively about how to better serve me - their customer.

Comments

[Laura]

This article tells you what happened...

http://www.guardian.co.uk/technology/2008/jul/16/mobilephones.telecoms