Cellphone charges while travelling can mount
If you're travelling abroad and plan to use your mobile phone to download emails, watch out: international roaming fees charged by wireless firms can be expensive and difficult to predict, according to an investigation by CBC-TV's Marketplace.
Marketplace, which set out to find Canada's worst cellphone bill, heard from Canadians who had racked up mobile phone bills that reached into the thousands of dollars.
International data roaming occurs when a customer uses their mobile phone outside of the country where their service provider operates. According to one expert, it doesn't actually cost companies much more to provide service for roaming than it would for a local person accessing their own cellphone network.
"The true costs are actually very, very slightly more than what it costs a local customer. So the profits are enormous," said Srinivasan Keshav, a computer science professor at Ontario's University of Waterloo.
"[Roaming] is a very good deal for [the companies]. It is in the best interest for both these providers to charge each other's customers as high a price as they can get away with, because that's just profit that they then give to each other," he said.
Keshav, a wireless technology expert who also holds the Canada Research Chair in Tetherless Computing, testified in June 2009 before a U.S. Senate subcommittee that was investigating allegations that American mobile operators were colluding to fix texting prices.
Keshav told senators that while it costs U.S. wireless companies a mere one-third of a cent per text, they were charging customers up to 20 cents per text.
The numbers are similar in Canada, said Keshav.
In 2008, the total revenue for Canadian wireless companies totaled $15.9 billion. On Wednesday, the federal government indicated it planned to open the wireless companies to foreign ownership in hopes of boosting competition.
Hard to understand
Daniela Hammond of Vancouver found out for herself just how expensive data roaming could be following a trip to the U.K. and Germany.
Hammond, a Fido customer, was worried about the cost of data roaming while travelling. She double-checked the costs with Fido while in London, and was told it was three cents per kilobyte.
"I had no understanding. I said, 'What's a kilobyte?'" said Hammond.
Keshav said he could see why Hammond had a hard time predicting how much it would really cost her.
"It's very difficult to understand. It's like somebody telling you your car can go no faster than 1.6 centimetres per millisecond. It means nothing to you. If I told you it was 60 kilometres an hour, now you know," said Keshav.
When Hammond opened her phone bill after her trip, she was in for a shock. She owed $1,300 in data roaming charges alone. Of that, about $900 was for checking her email account on one occasion in London.
By Keshav's calculations, that $900 charge worked out to about $1 a second.
"That is absolutely crazy," said Hammond.
Rogers Communications, which owns Fido, disagrees with Keshav's calculations, saying he significantly underestimates the costs.
Rogers also defended how the data roaming charges were explained to Hammond but added the company would follow up on her concerns.
"Our consultant advised the customer correctly of all possible charges she may incur. We will be reaching out ... to discuss those charges and ensure that we have heard her concerns," said Odette Coleman, director of communications for Rogers Communications.
Hammond said she doesn't understand how companies can get away with charging that much for something that costs them so little.
"How can they get away with that?" asked Hammond.