By Mark A Gregory, RMIT University
What’s the greatest rip-off going? Maybe so many come to mind that you’re reaching for a pen.
Your list might look something like this:
- bottled water
- sports drinks
- petrol price rises just before a long weekend or public holiday
- credit card interest rates and surcharges.
And let’s not forget international companies that prevent Australians from buying products directly from their US website, forcing them to purchase goods through a local website where products are much more expensive.
Apple’s iTunes is a good current example of the online price discrimination practices facing Australian consumers.
Of course, this discrimination is not limited to goods purchased online.
An OECD report published in May this year states that Australia is the third most expensive country in 34 OECD countries studied.
But back to our list.
If you have made a trip overseas recently your tally of rip-offs may include international data roaming charges. And for good reason.
Forgetting to turn off the data connection to your phone before you hop on a plane can mean your next mobile phone bill will contain a nasty, and very expensive, shock.
In May this year, the Australian and New Zealand governments announced they would investigate the high cost of using a mobile phone when travelling across the Tasman.
A review by The Australian Business Traveller highlighted a problem which – rightly – is causing outrage.
Depending on which network your phone belongs to, the cost can be as much as $AUD20/MB for international data roaming and $AUD4.40 per minute to call home to Australia from New Zealand.
Is this good value? To put it in perspective, the cost of transferring data over the internet is now available at $AUD0.10/MB or less.
Take, take, take
So is international data roaming the greatest rip-off in history? Possibly not, but it must be near the top given the mark-up on data charges is sitting at around 200 times the actual cost.
Representatives from Australian telecommunication companies will argue they have costs associated with providing their service, contract charges with the partnering telecommunication companies overseas; they’ll also point to the high cost of undersea cables to Australia.
But there are strong incentives for governments to look at ways of reducing unwanted costs and barriers.
Successive Australian governments have been tardy in dealing with this matter. There is a strong and compelling argument for the Australian Consumer and Competition Commission (ACCC) to be given greater powers to force Australian telecommunication companies to significantly reduce international roaming charges.
Australians are encouraged to travel and do business overseas, yet the issue of excessive international data roaming charges persists.
Over the past decade, government committees have looked at this issue many times and produced numerous reports – the 2009 House of Representatives Standing Committee investigation being a case in point.
Sadly, the outcome of this review – a recommendation that travellers be made aware of alternatives to mobile roaming – was of little consequence.
As a starting point, the Australian and New Zealand governments should immediately regulate to force down the cost of international mobile phone and data roaming between both countries. There doesn’t appear to be technical or economic reasons why this can’t occur.
The cost of using an Australian mobile phone for calls or data while in Wellington, New Zealand, should be no more expensive than the cost of using an Australian mobile phone for calls or data while in Hobart.
What should we do in the short term?
Australians travelling overseas need to ensure they turn their mobile phone’s data connection off before leaving. The best solution is still to purchase a cheap pre-paid mobile phone and SIM card on landing and to use this for data connections.
Is this ideal? No, it’s not. Do we have a choice? Sadly, no, unless we want to continue being charged through the nose at literally hundreds of times the going rate for data transfer.
Mark A Gregory does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.