Mobile roaming – For whom the call tolls

Excerpts from The Economist. Link at end of this post.

STAND on the south side of the Peace Arch in Blaine, Washington, an old-fashioned monument to American-Canadian comity, and a mobile call placed within the United States costs nothing (with a monthly calling plan) to 10 cents per minute. Pass through border control and place that same call on the arch’s north end, out of range of American antennas, and you pay through the nose. Try loading a web page and your eyes will bulge from their sockets.

The high cost of roaming was brought home to your correspondent before a brief family trip to Vancouver, a few hours from Seattle. In planning the trip, he and Mrs Babbage found excellent lodgings and charted out piles of potential activities for the kids, yet failed to consider connectivity until a day or so before departure. The hotel would have free Wi-Fi, but we had forgotten how much we rely on our smartphones as a walkie-talkie when we head off in different directions. The prices to keep the mobiles switched on proved appalling.

Our carrier, AT&T, offers pay-as-you-go calling for $0.79 per minute in Canada, and plain text messages (SMS) cost $0.50 to send and $0.20 to receive. One Canadian carrier, Rogers, charges a bit less than half that in a prepaid-plan. While high, these rates are not usurious. Still, AT&T pays substantially less wholesale (likely close to its own per-minute domestic rate), and has reciprocal agreements with Rogers and other Canadian carriers whose customers visit the United States. (AT&T does have a variety of subscription plans for frequent travellers that slash fees substantially, especially to Canada.)

Then there are the data rates. AT&T’s standard rate for Canadian data roaming is 1.5 cents per kilobyte, or $15,000 per gigabyte. It is 25% higher ($19,500 per gigabyte) in the 130 or so other countries with which AT&T has roaming agreements. Those rates are a stark contrast to what AT&T and other American carriers charge domestically: $10-50 per gigabyte depending on the usage plan. (Even that is a large mark-up.) AT&T will slash the price considerably, to $150-250 per gigabyte for an extra $30-120 month subscription.

Read the complete article in The Economist here.