Tuesday, January 24, 2006

On the ground: Roaming overcharges

Roaming is a well known term in the mobile industry and technically means that the user is on any network outside his home network, but is mainly known because of the surplus charges that apply everytime a phone is in roaming mode. The way it works is that your provider has a network of cell towers to cover its phones, called the home network, and then gets agreements with any number of other providers to allow its phones to use their towers, which your provider will pay them per use. It may have roaming agreements with other providers in the same country, and providers in other countries, as long as the technology used is the same. For example, Telus has a roaming agreement with Bell Mobility in Canada to allow its phones to work on the Bell network, and it also has agreements with Verizon in the US to allow international roaming on its network.

Roaming allows users to use their phones in other countries, and that's very good. It's also a reason why standardization is good, and why most of the world is using GSM. The problem comes with the fees associated. Roaming fees is one of the best way for providers to charge people, and depending on the country and the contracts, the fees can be quite high. Ofcom is now investigating many providers to see if they overcharge for roaming as part of an European Commission initiative. Some of the main issues seem to be from possible anti-competitive behaviours, and the fact that users are often unsure what the exact fees are when roaming.

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