Five million Australians have been hit with international roaming fees.
Five million Australians have been hit with international roaming fees.

There’s no excuse for this $1.4b rip-off

TELSTRA and Optus are ripping off Aussies by more than $1 billion in excessive international roaming fees simply to protect their "massive profit margins", rival Vodafone says.

A YouGov Galaxy survey commissioned by Vodafone in May found Aussies were spending a whopping $1.4 billion on roaming charges - and the telco says the rip-off continues despite recent announcements by its rivals.

The research suggested five million Australians had been hit with international roaming fees - an average of $290 per person. Some 250,000 people claimed to have paid more than $1000.

In one memorable case, an Australian man found himself with a phone bill of more than $7000 when he returned from an overseas jaunt. His travelling companions had paid nothing like that amount.

At least 1.5 million people said they chose to leave their phone in Australia when travelling to prevent "bill shock". Surprisingly, Gen X and Millennials were more likely to be stung than Baby Boomers.

The research found that only 3 per cent of smartphone users continue to use their phone as normal while overseas. The vast majority take steps to avoid international roaming, with 41 per cent restricting their phone to Wi-Fi.

Vodafone used the research to spruik its $5-a-day roaming deal, available in 80 countries, which allows customers to use their phone as they normally would. Telstra and Optus, by comparison, both charge $10 a day and have very low caps.

"It just amazes me that through various relaunches and launches and beautiful PR and marketing blitzes our competitors don't seem to ever be able to match our $5-a-day roaming and continue what is clearly an international roaming rip-off," Vodafone Australia chief commercial officer Ben McIntosh said.

"They try to get price points similar, but the terms and conditions just make it no better than it was before. Our product comes without any tricks or traps. If you go over your max, we literally charge you $10 per GB, exactly the same as if you're in Australia. We think it's fair and reasonable."

If you don’t preprare and then take your mobile abroad, you’re just handing over wads of cash to your telco.
If you don’t preprare and then take your mobile abroad, you’re just handing over wads of cash to your telco.

DON'T CRY FOR $7000 ARGENTINA

Under the Telecommunications Consumer Protections Code, providers must warn customers about roaming charges when the customer arrives in a different country and turns on their phone.

Warnings are sent by text message and must include the rates for making calls, sending texts, and using the internet in that country.

But with modern smartphones and apps chewing through an ever-increasing amount of data, often in the background, and telcos charging up to $1 per MB over the cap, unsuspecting travellers can easily blow through hundreds of dollars in a matter of seconds.

In a case study contained in the Telecommunications Industry Ombudsman's (TIO) latest six-month report, one traveller dubbed "Alex" received a $7133.74 bill after using his phone while travelling in Argentina.

He complained to the TIO, arguing it wasn't fair especially since he was travelling with friends who also used their phones but were only charged $100 by their provider. He argued he should only pay $150.

His telco argued the charges were valid but offered to reduce them to $5000. The telco provided evidence to the TIO that it had sent Alex the required warnings and an internet link in case he wanted to deactivate roaming.

The TIO ultimately found in favour of the telco and he was required to pay the bill.

NO INTERNATIONAL AGREEMENTS

Australian Communications Consumer Action Network chief executive Teresa Corbin said a big part of the problem was there weren't any international agreements or regulations between countries and providers to keep prices down.

"In Europe, if you are roaming between countries, the EU has agreements where they don't charge for roaming," she said. "There have been some discussion about there being a similar agreement between Australia and New Zealand, but I'm not sure what's happened with those discussions."

Ms Corbin said recently a number of cruise passengers had been caught out.

"People going on cruises just even around Australia, from Sydney to Tasmania or to Queensland, they're actually in international waters, and they're being charged for roaming," she said. "They think they're not going overseas, but technically, from a telecommunications perspective, they are."

HOW TO AVOID BILL SHOCK

Ms Corbin said there were some simple steps travellers should take to avoid a potentially hefty phone bill when they got home.

To begin with, the most important thing is to check what roaming options are available with your provider before you leave the country.

"Even if you realise too late there are some consumer protections in place, (if you turn on your phone) you get a text message that tells you how much it's going to cost, but they can be long messages and it can be a lot to take in, especially when you're traversing an international airport," she said.

"One of the things a lot of people don't realise is even if they're not making calls or sending messages, apps might be updating automatically. We really recommend they put their phone in aeroplane mode and just use Wi-Fi. Use apps like WhatsApp and Facebook Messenger to keep in touch with your family and friends."

Ms Corbin added that if you decide to take advantage of roaming, be aware that posting photos to Facebook and other social media "chews up an awful lot of data", and if you receive a phone call, "don't necessarily answer".

"Let it go to message bank," she said. "It may be cheaper to work out who they are first and whether you need to call them back."

Five million Australians have been hit with international roaming fees. Picture: Istock
Five million Australians have been hit with international roaming fees. Picture: Istock

 

OPTUS, TELSTRA CHANGES

In recent months, Optus has taken some steps to offer a slightly better deal, announcing a new suite of international roaming add-ons - for prepaid customers only, however - that would offer "great value".

Namely, a $5 international talk add-on that includes up to 300 minutes in 50 countries and $20 for 10GB roam data available for use in Hong Kong, New Zealand, Singapore, the UK and US.

"We've heard from our customers who have informed us that they just want to relax when travelling overseas and use their phone worry free, just like when they're at home," Optus head of strategic projects Vidur Rattan said in a statement.

Meanwhile, Telstra managed to make the deal for travellers even worse by removing default international roaming in a major shake-up of its mobile plans announced in June.

While in the past many plans included up to 2GB of roaming data per month, for example, all customers travelling overseas must now purchase a $10-a-day pass that offers just 200MB of data.

The move was widely panned by customers, but Telstra chief executive Andy Penn claimed the new plans eliminated bundles many felt they didn't need.

A Telstra spokesman said the company knew roaming costs were a "pain point" for customers and had "made several improvements to our roaming offers over the past few years".

"Our international roaming costs are subject to negotiation with international carriers," he said. "Our current offer is $10 a day in more than 70 countries or $5 a day in New Zealand, which includes unlimited talk and text and 200MB of data per day to use in eligible countries."

PROTECTING PROFIT MARGINS

Vodafone has the edge over its competitors due to its massive global presence, which allows it to cut more favourable deals with overseas carriers, but Mr McIntosh said that was only part of the story.

"To be fair, we certainly have an advantage being the only global player in this market, but if you look a bit below the surface I think it's got a lot more to do with protecting massive, massive profit margins than any advantage in negotiations," he said.

Mr McIntosh said "the reality is" that Optus and Telstra could easily cut better deals with overseas carriers but "just choose not to". He said he "can't really explain" the justification for telcos charging up to $1 per MB over the cap.

"If you're looking for rip-offs and excessive charging, it's a perfect example. Hidden beneath some nice marketing blitzes and 'we've changed, we're flexible' and so on are myriad excessive terms and conditions," Mr McIntosh said.

"At the end of the day we're a commercial operation, we're not a charity, we have shareholders and investors, and if we're able to do that I can't explain why our competitors aren't."

Our partner publication news.com.au has looked into international roaming fees as part of its new series Rip-off Buster, which provides readers with practical cost-of-living advice and hacks on how to help get a better deal - all with the goal of helping you to become financially fit.