Friday, April 22, 2011

Are You Getting a Rude Shock With Hidden Charges When You Get Telephone Bills?

Friday April 22, 2011
Friday Reflections - By B.K. Sidhu



Don't hide, be transparent in charges and rates.

No one likes a rude shock in the form of a big bill after a holiday, certainly not for making voice calls or just for some music downloads.

But that is the global reality. Blame it on the “blacks, iPhones, Galaxy and tablets.''

These are irresistible devices; they provide flexibility and keep you connected. They can also rack up big bills without you knowing it because they access the Internet to carry out automatic updates.

Some don't even allow data roaming but many have been surprised with weird charges' creeping into the bills, no matter how careful they are. Of course, all these nasty big bills can be avoided if there is greater transparency in plans, charges, bills and caps, similar to what is practised in Europe.

Data is the story of today but if you look back over a decade ago, voice roaming was the story and it was a very expensive affair to roam and talk. Frequent travellers have a lot of stories to tell of their nasty' roaming bills. It is not that it has stopped but people have found alternatives in IDD cards, buying SIMs from the country they travel to and even skype or chat on the many social platforms that are available.

There has been a call to reduce roaming rates for a long time. In 2007, the government did ask the celcos to reduce the rates but then, the celcos were not ready to stomach a reduction.

Then, voice was king and no matter how small the roaming revenue contribution was, it was still a contribution.

But things have changed and they are more willing to reduce rates, more so since voice revenues are going downhill.

So effective May 1, the voice and SMS roaming rates between Malaysia and Singapore will be slashed by 20% and 30% respectively. Call it a landmark pack to curb sky-high usage charges, but it could not have been achieved without the intervention of the ministries and regulators from both the countries.

Going by the original plan, the rates should be reduced by 30% and 50% but it will be done in stages. This May, it is 20% and 30% and next May, it will be adjusted to 30% for voice and 50% for SMS within both countries. It is only applicable for two years; after that, rates can go north, south or remain status quo.

This will be a test case before we can see any more reduction in roaming. And the whole of Asean will watch how this deal fares. If it works, they may want to replicate it. Hopefully, we will have a single rate across Asean one day - the way Europe has one rate for voice roaming.

The impact of the reduction is not going to be huge on the celcos in the two countries since voice revenues are going down. For now, roaming revenues make up about 10%-25% of Singapore telcos' mobile revenue versus 8%-10% for Malaysian telcos, says an analyst in his report.

He adds that “a reciprocal 20% reduction in roaming tariffs between the two countries (assuming a third of telcos' roaming revenue is derived from inbound/outbound roamers in both countries) would slice Singapore mobile revenue by 1%-2% compared with an estimated 0.5%-0.9% for Malaysian celcos, all else being equal.''

But if you ask the celcos, they may paint a “pitiful story'' of how much they will lose.

Perhaps, they should think of more creative ways to monetise their dumb pipes and with data growing the way it is, the loss in voice roaming can be easily compensated by data growth. Operators can also share and swap minutes with one another.

So, it is a great effort but the fear of users is that the celcos may reduce one sector and increase another to compensate for the shortfall. To avoid that, there should be a transparent pricing formula and rates.

Or else you cannot avoid a situation where users say “if there is no transparency, we will not be surprised if we end up paying the same amount even after May 1.”

It will become the story of “unlimited data usage,'' but in reality, there is a limit and if you surpass that, the charges roll in. So do you wonder where the unlimited factor is?


Deputy news editor B.K. Sidhu feels that there should be a massive revamp of data charges to bring down the entry level cost so that more Malaysians can be part of the “connected net world.''


http://biz.thestar.com.my/news/story.asp?file=/2011/4/22/business/8535371&sec=business

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