Vodafone made a significant move in improving its reputation yesterday when announcing it would only charge global roaming users an extra $5 per day while using their phones overseas – and it seems the rest of the industry is in a position to follow suit.
Yesterday’s announcement was partly a move to fix Vodafone’s reputation – the company lost half a million users in the first six month of the year. A huge amount of complaints to the Telecommunications Ombudsman relate to global roaming, so doing away with those is a big advantage.
Chris Coughlan, telecommunications expert and analyst, told SmartCompany this morning the move has the potential to improve Vodafone’s financial standing – and could be copied by Telstra and Optus.
Get business news first
Sign up to SmartCompany’s daily newsletter
“There’s nothing to stop other companies from negotiating bilateral agreements with other companies overseas,” says Coughlan.
“I’m sure the others are modelling it now, if they haven’t in the past.”
The Vodafone plans will allow users to use global roaming for just an extra $5 a day, which for many business customers does away with the need for making excessively expensive phone calls. For tourists, it eliminates the need to buy a new SIM card from the country to which they are travelling.
“It’s a good deal,” says Coughlan. “It’s also extra revenue that will be going directly to Vodafone.”
Both Optus and Telstra were contacted this morning by SmartCompany, and the responses varied.
Optus said in a statement the company welcomed the announcement, and hinted at changes to its own roaming plans in the next few months.
Vodafone said in its statement the new charges will apply to new customers who sign up from August, but existing customers can sign up to the new plans with no fee.
The new plans include 1GB of data, although other packages can be bolted-on. Any excess data will be charged at the default rate for Australian usage, which is 10 cents per megabyte.
A spokesperson told SmartCompany the company also intends to add more countries to the deals, and said the new plans “lay down the gauntlet” for the industry.
Telstra said in a statement the company is “working hard” to educate customers about roaming costs, pointing to a number of its “traveller” packs and plans.
The main issue with global roaming is that in order to offer cheaper rates, telecommunications businesses need to strike deals with businesses in the target countries.
This is a complicated process, and one that’s caught the attention of the federal government. Former communications minister Stephen Conroy released a report last year which aimed to create agreements between telcos in New Zealand and Australia.
Experts have mostly agreed this process could take several years – but Vodafone’s announcement could spur action.
“What we’re seeing now is that people have the expectation that data is just so expensive they’re not using it – and those who are experience this bill shock,” says Coughlan.
“I know when I go overseas, I just turn the data off completely.”
By establishing the deal, Coughlan says, Vodafone has placed itself in a good position to attract new revenue.
“And they’ll get rid of bill shock complaints at the same time…if other companies haven’t looked at this, they’d be doing modelling on it now.”